The Ontario Chamber of Commerce and the Canadian Federation of Independent Business have praised the Ontario government’s decision to permanently reduce the small business corporate income tax rate in the 2026 Ontario budget.
The rate will be cut from 3.2 percent to 2.2 percent, bringing relief to 375,000 small businesses struggling with current cost pressures. Per the CFIB, small business owners have signed over 11,000 petitions backing tax amendments.
“While Ontario businesses have been resilient, they find it hard to invest amidst rising costs, trade uncertainty, and tight margins. 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,” said Daniel Tisch, OCC’s president and CEO, in a statement.
CFIB added that lower taxes would help small businesses succeed considering the ongoing economic uncertainty as a result of US tariffs and spiking oil prices. Findings from a February CFIB survey revealed that the tariffs have affected 72 percent of Ontario small businesses in all sectors; 28 and 44 percent are directly and indirectly impacted, respectively.
“We expect this investment will be returned in spades, since small businesses have told us they would capitalize on any new tax savings by directing them to economy-stimulating measures, including increasing employee compensation, expanding their operations, and hiring new employees,” said vice-president of legislative affairs (Ontario) Angela Drennan, director of provincial affairs (Ontario) Julie Kwiecinski, and policy analyst (Ontario) Joseph Falzata in a joint statement.
CFIB met with elected ministers like finance minister Peter Bethlenfalvy over 50 times.
“Stability is essential but not sufficient. The next phase must focus on unlocking investment in productivity, fostering entrepreneurship, scaling innovation, and building a sustainable, competitive and diversified economy,” Tisch said in a statement.
Other Budget 2026 measures include offering productivity‑focused incentives like accelerated write‑offs to limit the cost of machinery and equipment. Another urged the elimination of the provincial portion of the HST on new homes, supported by a federal-provincial cost-sharing agreement to reduce costs and back new housing development.
A new Protect Ontario Account Investment Fund would earmark up to $4 billion for new industries by crowding in private and pension capital. The budget also focuses on health system modernization, energy, critical minerals, and advanced technologies.
The OCC advocated for $6.4 billion to be allocated for postsecondary education, improving the talent pipeline and backing research, innovation, and commercialization; this measure has also been included in the budget.
The chamber encouraged the Ontario government to build on the 2026 budget priorities by simplifying the tax and regulatory environment -granting incentives for investments in productivity, easing administrative burdens, eliminating out-of-date provisions, and driving business growth. Moreover, it urged the Ontario government to leverage public procurement, improving support for Ontario-based small-and-medium enterprises.
The OCC also pushed for new programs, micro-credentials, work-integrated learning opportunities, and skills training in partnership with post-secondary institutions; these would be customized for SMEs. It urged the government to develop an employee ownership policy framework to reduce barriers, drive awareness, and generate targeted incentives to support the federal government’s approach.
The chamber called for the acceleration of climate adaptation and resilience through targeted infrastructure investments and support to help businesses address transition costs. It called for the provincial–municipal fiscal relationship to be updated and for the enhancement of Ontario’s culture and tourism sectors via a coordinated strategy boosting workforce development, regional economic growth, and market access.
The OCC sought the recognition of these sectors as critical economic infrastructure.