60  /

Notes

(1)  For Accounting Standards for Private Enterprise (ASPE) and IFRS purposes, a corporation’s 

recorded income tax liabilities and assets in their financial statements should be measured 

using tax rates that are considered to be “substantively enacted” at the balance sheet 

date. In general, where there is a majority government, federal and provincial tax changes 

are considered to be “substantively enacted” for ASPE and IFRS purposes when a 

tax bill containing the detailed legislation is tabled for first reading in the House of 

Commons or the provincial legislature. In the case of a minority government, however, 

the “substantively enacted” test is more stringent and requires the enabling legislation to 

have passed third reading in the House of Commons or the provincial legislature. 

For U.S. GAAP purposes, a corporation’s recorded income tax liabilities and assets in 

their financial statements should be measured using tax rates that are considered to be 

enacted at the balance sheet date. In general, tax rate changes are considered enacted 

once the relevant bill has received Royal Assent. 

When tax rate changes are considered enacted or ”substantively enacted”, the effect 

of the change in tax rate is reflected in the period in which the changes are enacted or 

“substantively enacted”. The effect of the change is recorded in income as a component 

of deferred tax expense in the period that includes the date of enactment or substantive 

enactment. For example, if a bill becomes “substantively enacted” for ASPE or IFRS 

purposes (enacted for U.S. GAAP purposes) on September 30, the tax rate changes should 

be reflected in the corporation’s financial statements for the quarter that includes  

September 30.

(2) The federal and provincial tax rates shown in the tables apply to income earned by a 

Canadian-controlled private corporation (CCPC). In general, a corporation is a CCPC if the 

corporation is a private corporation and a Canadian corporation, provided it is not controlled 

by one or more non-resident persons, by a public corporation, by a corporation with a 

class of shares listed on a designated stock exchange, or by any combination of these, and 

provided it does not have a class of shares listed on a designated stock exchange. 

The tax rates included in this table reflect federal and provincial income tax rate changes that 

were substantively enacted as at September 30, 2013. 

Substantively Enacted Income Tax Rates for Income Earned 

by a CCPC 

for 2012 and Beyond— As at September 30, 2013

Current as of September 30, 2013

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