Ontario’s small businesses are due for some tax relief under the Ford government’s newly tabled provincial budget. This past Thursday, the province rolled out its 2026 budget which included a drop in the small business corporate income tax (CIT) from 3.2 per cent to 2.2 per cent. “I think what it allows [businesses] to do is to put more money back into advertising and promotion and do things that meaningfully grow their business,” said Chris McLeod, the chair of the Downtown Windsor Business Improvement Association (DWBIA) in an interview with CTV News. If passed, the tax cut would take effect July 1 and is expected to provide $1.1 billion in CIT relief over three years to more than 375,000 businesses in the province. “If we can keep those dollars in business’ hands, it also then recycles in other areas of the economy,” said McLeod. “It’s better to have it with businesses and allow them to employ it to grow.” McLeod pegs the one point cut at a maximum $5,000 benefit for a business able to take advantage of the change and stresses for operators sensitive to price pressures like food and restaurant vendors downtown, the cut could ease that pain. The Windsor-Essex Chamber of Commerce (WECoC) weighed in as well, calling the move a good step forward. “The reduction of the small business corporate tax rate to 2.2 per cent is a positive step for incorporated businesses facing ongoing cost pressures, particularly in trade‑exposed regions like Windsor‑Essex,” said Ryan Donally, president and CEO of the WECoC, in an email response to CTV News. “It improves cash flow and gives employers more certainty to reinvest in their operations and workforce.” But the billion-dollar broad-based relief won’t reach all small businesses and it’s in that gap Donally believes more can be done. “This relief applies to incorporated firms, not all small businesses, which is why locally and at the provincial Chamber level we continue to call for targeted measures alongside broad‑based tax cuts," said Donally. McLeod sees the move as one of several measures the Ford government has implemented aimed at supporting businesses. “I think having a more broad-based tax cut will help businesses that maybe didn’t qualify for the targeted programs it’s partially replacing,” said McLeod. Tax Cut Applauded While gaps remain, the move received broad support from business groups. The Ontario Chamber of Commerce lent its support for the announced tax cut, applauding the move in a statement released on Thursday. “While Ontario businesses have been resilient, they find it hard to invest amidst rising costs, trade uncertainty, and tight margins,” said Daniel Tisch, president and CEO of the Ontario Chamber of Commerce, in a statement. “Budget 2026 strikes a balance, providing stability and a path to fiscal responsibility while giving businesses welcome breathing room and support to invest, diversify, compete and grow.” The Canadian Federation of Independent Business (CFIB) called the move a “top priority” for its members. In its statement, the CFIB stressed the policy was a focus of more than 50 meetings at Queen’s Park with over 11,000 CFIB petitions supporting the tax change to date. The CFIB says its some 40,000 small business members would capitalize on new tax savings by increasing employee compensation, hiring new employee, and expanding operations. The Ford government has billed the move as one meant to help small business stay competitive and resilient in the face of “challenging global economic circumstances” it’s working to navigate.
