Compare taxes and see how much you save moving from Ontario to Alberta
For small business owners, the Ontario vs Alberta comparison involves two distinct layers: personal income tax on the salary you draw from your business, and corporate income tax on profits retained in the corporation. On personal income, Ontario is cheaper — at a $100,000 owner salary, Ontario saves $2,959/year. However, Alberta's Small Business Deduction (SBD) rate of 2% provincial (vs Ontario's 3.2%) saves $1,200/year on $100,000 of corporate profit. Alberta's zero PST also means lower business input costs — no 8% Ontario PST on business purchases. For product-based businesses with significant inventory or capital expenditure, Alberta's no-PST advantage can be substantial. The decision often comes down to where your customers and talent are — Toronto's larger market frequently justifies Ontario's slightly higher corporate rate.
Lower Personal Income Tax
5 progressive brackets from 5.05% to 13.16%
Lower Corporate Rate + No PST
5 progressive brackets from 10% to 15%
At $100,000 income:
Ontario business owners pay $2,959 less personal income tax than Alberta at $100K owner salary. However, Alberta's 2% SBD rate (vs Ontario's 3.2%) saves $1,200/year on $100K corporate profit — and no PST means lower business input costs.
| Income | ON Tax | AB Tax | Savings | 10-Year |
|---|---|---|---|---|
| $75,000 | $4,753 | $7,500 | -$2,747 | -$27,470 |
| $100,000 | $7,041 | $10,000 | -$2,959 | -$29,590 |
| $150,000 | $12,563 | $15,035 | -$2,472 | -$24,720 |
| $200,000 | $18,643 | $21,255 | -$2,612 | -$26,120 |
| $300,000 | $31,603 | $34,883 | -$3,280 | -$32,800 |
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Send Money To/From Canada →It depends on your business structure. On personal income: Ontario wins (saves $2,959/year at $100K salary). On corporate SBD rate: Alberta wins (saves $1,200/year on $100K profit at 2% vs 3.2%). On input costs: Alberta wins (no PST). For service businesses in Toronto's market, Ontario often wins overall. For product businesses with significant purchases, Alberta's no-PST advantage can tip the balance.
Ontario's combined SBD rate is 12.2% (3.2% provincial + 9% federal) on the first $500,000 of active business income. Alberta's combined SBD rate is 11% (2% provincial + 9% federal) on the first $500,000. Alberta saves $1,200/year on every $100,000 of incorporated business profit.
Ontario's 8% provincial PST (as part of 13% HST) applies to most business inputs including equipment, manufacturing machinery, and some services. Businesses registered for HST collect and remit HST but also receive Input Tax Credits (ITCs) on business purchases — meaning registered HST businesses essentially recover the HST paid on inputs. The PST component is effectively cost-neutral for HST-registered businesses making taxable supplies.
Ontario, particularly Toronto, has Canada's most developed venture capital and angel investor ecosystem. The MaRS Discovery District, multiple accelerators, and proximity to Bay Street financial capital make Toronto the top city for startup funding. Calgary's ecosystem is growing rapidly but is smaller, with particular strength in energy tech, AgriFood, and infrastructure technology.
Incorporation province affects where you pay provincial corporate tax. If your business primarily operates in Ontario, you'll pay Ontario corporate tax regardless of where you're incorporated. Incorporating in Alberta to save tax while operating in Ontario generally doesn't work — provincial corporate tax is based on where income is earned. Consult a Canadian corporate tax accountant for your specific situation.
At $200,000 owner salary: Ontario pays $18,643 vs Alberta's $21,255 — Ontario saves $2,612. At $300,000: Ontario pays $31,603 vs Alberta's $34,883 — Ontario saves $3,280. Ontario's personal income tax advantage remains consistent at higher salaries, as Ontario's top rate (13.16%) stays well below Alberta's 14–15% rates on income above $237,230.
Product-based businesses with significant physical inventory, manufacturing operations, or capital-intensive equipment benefit most from Alberta's no-PST. A contractor buying $200,000 of equipment annually saves $14,000 in PST by operating in Alberta. Service businesses where inputs are primarily labour see less PST impact, making Ontario's larger market often the better choice for pure service firms.