Canada makes it genuinely easy to start small: if you're a sole proprietor operating under your own name, there's no registration step at all. Where it gets more layered is once you incorporate, since you're choosing between a federal corporation and ten different provincial systems, each with its own fees, rules, and sales tax. Here's what it takes to start a business in Canada in 2026.
1. Which business structure fits you?
Before you register anything, it helps to know what you're actually choosing between.
- Sole proprietorship. You and the business are the same legal entity. No separate registration if you operate under your own legal name; you report business income on your personal T1 return using Schedule T2125. Simple and cheap, but you're personally liable for whatever the business owes, and profit is taxed at your personal marginal rate.
- Partnership. Two or more people running a business together, with liability generally shared across the partners in a general partnership.
- Corporation. A separate legal entity from its owners, giving you limited liability and access to the small business tax rate. You can incorporate federally under the Canada Business Corporations Act (CBCA) or provincially under your province's own corporate statute.
A common rule of thumb is to start as a sole proprietorship and incorporate once profit consistently clears somewhere around $50,000 to $75,000 CAD a year, which is roughly where the tax deferral from incorporating starts to outweigh the added cost of a corporate tax return.
2. Register your business
Sole proprietorships
If you're operating under your own legal name, there's nothing to register federally or provincially. If you want to use a business or trade name instead, you'll register that name with your province, and the fee varies by where you're located.
Incorporating
You have two paths. Federal incorporation goes through Corporations Canada under the CBCA, filed online through the Corporations Canada Online Filing Centre. The fee is $200 CAD online ($250 by paper), and online filings are typically approved within 1 to 2 business days. A federal corporation gets Canada-wide name protection and the right to operate in every province, but it needs at least 25% Canadian-resident directors, and you'll still have to register extra-provincially (for an added fee) in each province where you actually do business.
Provincial incorporation goes through your province's own registry instead, and both the fee and the rules vary: Ontario is $300 CAD through the Ontario Business Registry, British Columbia is $350 plus a $30 name approval fee, Alberta runs around $275, Saskatchewan around $265, and Quebec is $397 through the Registraire des entreprises (REQ). Some provinces, including Ontario and BC, don't have a Canadian-resident director requirement, which matters if you're a non-resident founder incorporating from outside the country. You can also register a numbered company (like 1234567 Canada Inc.) to skip the corporate name search entirely.
Since January 2024, all CBCA corporations must also maintain an Individuals with Significant Control (ISC) register, a private internal record of who ultimately owns or controls the company. There's no filing fee for it, but it needs to be kept current and disclosed on request.
3. Get a CRA Business Number
A Business Number (BN) is a free nine-digit identifier from the Canada Revenue Agency that anchors every federal program account your business needs, GST/HST, payroll, corporate income tax, and import/export. Corporations generally receive one automatically at incorporation; some provinces, including Alberta and BC, issue it automatically when you register there.
Sole proprietors don't need a BN right away. You'll need one once you register for GST/HST, hire employees, or import or export goods, whichever comes first. As of November 3, 2025, new BN and CRA program account registrations have to be done online through Business Registration Online (BRO); the CRA no longer accepts these registrations by phone.
4. Check licenses and permits
Canada doesn't issue a single national business license. What you need depends on your industry and municipality: most cities and towns require a local business license, regulated professions need provincial licensing, and some industries carry their own federal or provincial permits on top of that. Check with your municipality and provincial regulator directly, since requirements vary considerably across the country. If your business relies on original branding or creative work, our guides on intellectual property basics and essential contracts for solopreneurs are good next reads, since both apply regardless of where you're based.
5. Understand Canadian taxes
Sole proprietors pay personal income tax on business profit at their marginal rate, reported through Schedule T2125 on the T1. Corporations pay corporate income tax instead: the federal rate is 15%, reduced to 9% on the first $500,000 CAD of active business income for Canadian-controlled private corporations through the small business deduction. Each province layers its own rate on top, so the combined small business rate lands somewhere between about 9% (Manitoba) and 13% (Northwest Territories), and the combined general rate above the $500,000 threshold ranges from around 23% (Alberta) to 31% (Prince Edward Island).
Sales tax is where Canada gets genuinely province-specific. The federal Goods and Services Tax (GST) is 5% everywhere. Five provinces harmonize it into a single HST: Ontario at 13%, Nova Scotia at 14%, and New Brunswick, Newfoundland and Labrador, and Prince Edward Island at 15%. Alberta and the three territories charge only the 5% GST with no provincial add-on. British Columbia, Saskatchewan, and Manitoba charge the 5% GST plus their own separate provincial sales tax on top (7%, 6%, and 7% respectively), and unlike GST, that provincial portion usually isn't recoverable as a credit. Quebec charges 5% GST plus a 9.975% Quebec Sales Tax (QST), both administered together by Revenu Québec rather than the CRA.
You're required to register for GST/HST once your taxable revenue exceeds $30,000 CAD over four consecutive calendar quarters; below that, you're considered a small supplier and don't have to charge it, though you can register voluntarily earlier to start claiming input tax credits on business purchases.
6. Stay compliant
Every federal corporation files an annual return with Corporations Canada, due within 60 days of your incorporation anniversary. It's a status update, not a tax filing, and it costs $12 CAD online. Provincial corporations file their own version with their province, and both the fee and deadline vary by where you're registered.
Separately, every corporation, federal or provincial, files a T2 corporate income tax return with the CRA each year, generally due six months after your fiscal year-end, even in years you owe nothing. Keep your ISC register current if you're a CBCA corporation. Missing an annual return, federal or provincial, is the most common way small corporations fall out of good standing and risk administrative dissolution.
Canada business costs at a glance
| Item | Cost |
|---|---|
| Sole proprietorship (own legal name) | Free, no registration |
| Business/trade name registration (if not using your own name) | Varies by province |
| Federal incorporation (CBCA) | $200 CAD online / $250 mail |
| Provincial incorporation | ~$265 to $397 CAD depending on province |
| CRA Business Number | Free |
| Federal annual return (every year) | $12 CAD online |
| Corporate income tax, small business rate (first $500K CAD) | ~9% to 13% combined |
| Corporate income tax, general rate (above $500K CAD) | ~23% to 31% combined |
| Sales tax (GST alone, AB/territories) | 5% |
| Sales tax (HST, ON/NS/NB/NL/PE) | 13% to 15% |
| Sales tax (GST + PST/QST, BC/SK/MB/QC) | 11% to 14.975% |
Frequently asked questions
How much does it cost to incorporate federally in Canada?
$200 CAD online ($250 by paper) through Corporations Canada under the CBCA, typically approved within 1 to 2 business days.
Does a Canadian corporation need Canadian-resident directors?
A federal corporation needs at least 25% Canadian-resident directors, but some provinces, including Ontario and BC, have no such requirement, which matters for non-resident founders.
What's the corporate tax rate in Canada?
A federal rate of 15%, reduced to 9% on the first $500,000 CAD of active business income for Canadian-controlled private corporations, plus a provincial rate on top that varies by location.
When do I need to register for GST/HST in Canada?
Once your taxable revenue exceeds $30,000 CAD over four consecutive calendar quarters. Below that you're a small supplier and don't have to charge it.
Does sales tax vary by province in Canada?
Yes significantly. It ranges from just the 5% federal GST in Alberta and the territories up to 15% HST in several Atlantic provinces, with British Columbia, Saskatchewan, Manitoba, and Quebec charging GST plus their own separate provincial sales tax.
Fees and rates above come from Corporations Canada, the Canada Revenue Agency, and provincial corporate registries as of 2026, and they do change over time, so double check before you file. None of this is legal or tax advice. Talk to a Canadian-licensed lawyer or accountant about your specific situation.