Canada: Temporary reduction to 0% of small business rate (Saskatchewan)

Canada: Temporary reduction to of small business rate

Saskatchewan’s Bill 2 (first reading on 7 December 2020) would reduce the province’s small business income tax rate for the next three years.


Specifically, under Bill 2, the schedule for the small business income tax rate would be as follows:

  • Reduction of the small business income tax rate to 0% (from 2%) beginning 1 October 2020
  • Increase to the small business income tax rate to 1% (from 0%) beginning 1 July 2022
  • Increase to the small business income tax rate back to its current rate of 2% (from 1%) beginning 1 July 2023

Non-eligible dividend tax credit

As a result of the small business rate changes, Bill 2 would also adjust the dividend tax credit for non-eligible dividends beginning in 2021, resulting in a top marginal tax rate for non-eligible dividends as follows:

Non-eligible dividends – Top marginal federal and Saskatchewan tax rate*











*Assumes no further changes to the federal or Saskatchewan tax rates.

Home renovation tax credit

Saskatchewan also introduced a new home renovation credit in Bill 1 (first reading on 3 December 2020). The measure would allow homeowners to claim a 10.5% non-refundable tax credit on up to $20,000** of certain eligible home renovation expenses on their primary residence.

Homeowners could claim a tax credit on eligible expenses between:

  • $1,000 and $12,000 ($11,000 total) incurred between 1 October 2020 and 31 December 2021 on their 2021 tax returns
  • $1,000 and $10,000 ($9,000 total) incurred between 1 January 2022 and 31 December 2022 on their 2022 tax returns

**$=Canadian dollar

There would be restrictions on the type of expenditures that could qualify, and spouses residing at the same address could share the credit.

Read a December 2020 report [PDF 347 KB] prepared by the KPMG member firm in Canada

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