72  /

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 December 31, the tax rate changes should be 

reflected in the corporation’s financial statements for the quarter that includes December 31.

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

corporations other than Canadian-controlled private corporations (CCPCs). A general 

corporation typically includes public companies, and their subsidiaries, that are resident in 

Canada, and Canadian resident private companies that are controlled by non-residents. 

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

were substantively enacted as at December 31, 2014.  

Substantively Enacted

1

 Income Tax Rates for Income Earned by a 

General Corporation

2 

for 2013 and Beyond—As at December 31, 2014

Current as of December 31, 2014

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