Summer Team Snap - Niagara-on-the-Lake

AND NOW, JULY’S TOP 7…

1) Confidence Is Back. Sort Of.

Canadian Small Business Confidence Rebounded in July

Business owners are feeling more optimistic, but tariffs, weak demand and rising costs could quickly change the mood.

2) Starting Is Easy. Surviving Is Hard.

More Canadian Businesses Are Closing Than Opening

Canada has now seen more businesses exit than enter for three straight quarters, a reminder that cash flow and margins matter more than hype.

3) Ontario Business Owners Got a Tax Cut

Ontario’s Small Business Tax Rate Dropped on July 1

Ontario’s small business corporate tax rate fell from 3.2% to 2.2%, but the actual savings will depend on your year-end and tax situation.

4) The Bank of Canada Does Not Set Your Loan Rate

Why Business Borrowing Costs May Stay High

Your financial statements, cash flow and lender confidence may matter just as much as the Bank of Canada’s next rate decision.

5) Canadian Small Businesses Are Seeing Real Gains From AI

AI Could Increase Canadian SME Productivity by Up to 38%

Only 30% of Canadian SMEs currently use generative AI, but those that do are already reporting materially higher productivity.

6) Bigger Deals. Pickier Buyers.

Canadian M&A Values Rose, but Deal Activity Slowed

Buyers still have capital, but they are favouring businesses with clean financials, recurring earnings and less dependence on the owner.

7) Are You Scaling the Business or Your Exhaustion?

How to Set Boundaries as a Founder

Saying yes to every customer and opportunity may look like growth, until you realize the business is becoming more dependent on you, not less.

Power to you,

Think Team 🙏

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This is How We Help Our Clients

WHAT CHANGED

Starting July 1, 2026, Ontario dropped its small business corporate tax rate from 3.2% to 2.2%.

This lower rate applies to the first $500,000 of active business income earned by an eligible Canadian-controlled private corporation (CCPC). Add in the federal small business rate, and the combined tax rate on that income drops from 12.2% to 11.2%.

WHY IT MATTERS

1% point doesn't sound like much on its own. But if your corporation earns close to that $500,000 mark each year, it adds up. We're talking thousands of dollars in tax savings, year after year, for the life of your corporation.

That's money that stays in your business instead of going to taxes. You can put it toward payroll, equipment, paying down debt, or just building a bigger cushion.

THE SLIGHTLY CONFUSING PART

The new rate doesn't apply cleanly to everyone right away. It depends on your fiscal year-end.

If your corporation's fiscal year runs January to December, you'll pay a blended rate for 2026. Part of the year is taxed at the old 3.2% rate, and part is taxed at the new 2.2% rate, split based on the number of days before and after July 1st.

That means the rate on your 2026 financial statements won't be a clean 2.2%. It'll be somewhere in between, and the exact number depends on your specific year-end date. If your year-end falls somewhere other than December 31, your math will look different again.

Not to worry, our team takes care of that automatically.

WHAT TO DO NEXT

Nothing. You don't need to file anything or apply for this. If your corporation already qualifies for the small business rate, the savings happen automatically.

But if you want to know exactly what this means in dollars for your business this year, reach out to the tax team member on your file and we’re happy to chat.

Source: Ontario 2026 Budget, Ministry of Finance

Power to you,

Think Team 🙏

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If you hold publicly traded shares with a big unrealized gain, donating the shares “in-kind” (without selling) can be one of the most tax-efficient ways to give in Canada.

When you donate eligible publicly listed securities directly to a registered charity (or other qualified donee), the capital gain can be subject to a zero inclusion rate, meaning no taxable capital gain is included in your income, yet you can still receive an official donation receipt based on the shares’ fair market value at the time of the gift.

This post explains how the strategy works, the common pitfalls (selling first, getting an “advantage,” donation limits), and how to coordinate gifts of shares with your estate plan, including how donation credits may be used on the terminal T1 and by an estate in the years following death.

In this in-depth blog post we cover:

• What qualifies as an eligible gift of securities

• Why donating shares can beat donating cash

• Step-by-step: how to donate shares in kind

• How donation credits work (limits and carryforwards)

• Estate planning: using donation credits on the terminal T1 and by the estate

• With examples…and much more!

Let’s dive in!

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Power to you,

Think Team 🙏

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A quick, time-sensitive heads-up for those of you running a business in the City of Toronto.

The City of Toronto - with funding from the Government of Ontario - is currently accepting applications for the Starter Company Plus Grant. The General Business stream is open right now, and the window closes May 29 at 4:29 p.m. If you've been operating for at least six months, this is worth a look.

What you actually get

Selected entrepreneurs receive:

• A $5,000 micro-grant to put toward growth

• Up to 15 hours of business training

• Up to three months of one-on-one mentoring and advisory support

Do you qualify?

There are two sets of boxes - you, and your business.

You need to be a Canadian citizen or permanent resident, 18 or older, not currently in school, devoting at least 35 hours a week to the business (and not employed elsewhere), and a Toronto resident.

Your business needs to:

• Be registered with a Toronto address and have a commercial bank account

• Have been operating between 6 months and 5 years, with financial statements to show it

• Run year-round with fairly steady month-to-month revenue

• Here's the one people miss → you must have already invested at least $1,250 of your own money (25% of the grant) into the business before you apply. Cash, equipment, marketing, rent, and other legitimate startup costs all count.

A few business types are excluded → franchises, charities and non-profits, online resellers, real estate and money-service businesses, crypto, and cannabis-related products, among others. Worth a two-minute check before you start the form.

How applicants are chosen

It's competitive. A City review committee looks for a viable business: proof of concept, real customer demand, and a clear revenue model - plus growth potential and a solid startup budget. A clean, well-documented application makes a real difference.

Ready, or not sure?

• Apply online here — the deadline is firm: May 29, 4:29 p.m.

• The City also runs free virtual info sessions if you'd like to ask questions first.

Even if this round isn't the right fit, the program runs in multiple streams through the year so it's good to have on your radar.

All the best!

Power to you,

Think Team 🙏

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Many Canadian business owners wait until a buyer appears before thinking about exit preparation. By then, it’s often too late to address tax planning, financial reporting issues, and diligence risks that can affect valuation or derail a transaction.

This guide outlines a practical 12-month exit readiness plan for founders preparing to sell a business in Canada, including tax considerations, financial cleanup, Quality of Earnings preparation, and what buyers look for in due diligence.

In this in-depth blog post we cover:

• Why Exit Readiness Matters

• A 12-Month Exit Readiness Timeline

• Quality of Earnings Preparation

• Tax Planning Measures

• Preparing for Buyer Due Diligence

• …and more!

Let’s dive in!

Click Here To Read

Power to you,

Think Team 🙏

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If you run an incorporated medical practice, how you pay yourself is one of the most consequential tax decisions you make each year … yet most physicians never model it properly.

This post breaks down the four main ways to withdraw money from your professional corporation - salary, dividends, capital dividends, and shareholder loans - and explains when each one makes sense.

In this in-depth blog post we cover:

• Salary: how it works, CPP, RRSP room, and predictability

• Dividends: eligible vs non-eligible

• Capital dividends: what CDA is and why it’s powerful

• Shareholder loans: when they work, the one-year rule, and the risks

• Common physician mistakes (RDTOH, investing inside the corp, and more)

• A comparison table you can actually use

• …and more!

Let’s dive in!

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Power to you,

Think Team 🙏

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Whether you plan to sell your business in the short-term or several years from now, it’s tempting to focus on one headline number: EBITDA. But in most Canadian mid-market deals, the multiple applied to EBITDA is where the real value is.

This guide lays out the value levers to increase your business value, with an eye to how deals are actually negotiated, including tax and structure considerations affect your net proceeds.

In this in-depth blog post we cover:

• How Buyers think about the ‘Multiple’

• The 5 Core Value Levers that Increase or Decrease the Multiple

• Tax Considerations that affect Net Proceeds

• Working Capital Peg and ‘Debt-like Items’

• Pre-Sale Value Lever Checklist

• …and more!

Let’s dive in!

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Power to you,

Think Team 🙏

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If you run an incorporated business, vehicle tax planning can get confusing, and costly if you don’t understand the tax rules. The answer changes depending on who owns the vehicle.

If the corporation owns or leases it, personal driving can create a taxable benefit to the owner. If you own it personally, the cleaner route is often a reasonable mileage allowance or a documented reimbursement for business use.

In this in-depth blog post we cover:

• how CRA separates business driving from personal driving

• what happens when you own the vehicle personally and use it for business

• standby charge and operating expense benefit

• CRA mileage allowances, reimbursements, and T2200 issues

• record-keeping and common mistakes

• …and more!

Let’s dive in!

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Power to you,

Think Team 🙏

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Most people think “interest” and “penalties” are the same CRA charge. They’re not.

Interest is the cost of being late with money you owed, and it generally starts right after a payment due date and keeps accruing (often compounded daily).

Penalties are separate charges triggered by specific behaviour, like filing late, remitting payroll late, or filing information slips late, and they’re usually calculated using set formulas or percentage bands.

In this in-depth blog post we cover:

• What CRA “interest” is (and why it keeps growing)

• What CRA “penalties” are (and what triggers them)

• How CRA calculates interest and penalties

• Real-world examples (so you can sanity-check CRA charges)

• How to reduce the damage 

• When and how to request cancellation/waiver (Taxpayer Relief)

• …and more!

Let’s dive in!

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Power to you,

Think Team 🙏

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Incorporation gets marketed to dentists and medical professionals as the “obvious” next step, but the real benefit usually isn’t instant tax savings. It’s tax deferral: the ability to leave money inside a corporation when you don’t need it personally right away, so you can reinvest into growth, pay down debt faster, or build a base for a second op or an acquisition.

In this in-depth blog post we cover:

• What incorporation actually changes (and what it doesn’t)

• Tax deferral explained in plain English

• Is there a right timing: when it’s worth it

• Salary vs dividends as an ongoing strategy

• Practical decision framework

• …and more!

Let’s dive in!

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Power to you,

Think Team 🙏

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Financial due diligence for acquisitions is where buyers want to validate the SDE/EBITDA and bridge the gap to predictable cash flow. That means going beyond the financial statements to test earnings quality, normalize working capital, and surface tax and payroll exposures that can change value or deal terms.

This article explains what Canadian buyers should actually look for in a diligence process, how asset and share deals change the risk profile, customer concentration, and government compliance often matter more than the seller’s CIM suggests.

In this in-depth blog post we cover:

• Why financial due diligence matters before closing an acquisition

• How buyers test whether SDE/EBITDA is sustainable

• What a Quality of Earnings review is and why it matters

• Assess normalized working capital for a fair working capital peg

• Why cash flow matters more than the marketed SDE/EBITDA

• How asset purchase vs share purchase changes financial risk

• A practical buyer diligence checklist

• …and more!

Let’s dive in!

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Power to you,

Think Team 🙏

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If you ship from a U.S.A. warehouse to Canadian customers, you’ll often see “tax at the door” collected by FedEx/UPS. Many founders assume that means they should not charge GST/HST at checkout.

That’s usually the wrong conclusion, and it creates two problems: unhappy customers (surprise COD charges) and GST/HST exposure if CRA views your sale as a taxable supply delivered in Canada.

In this in-depth blog post we cover:

• GST/HST on the sale vs import GST/duties (CBSA)

• The key concept: importer of record

• Why “FedEx charged my customer” doesn’t automatically solve GST/HST

• The solution: charge GST/HST at checkout + ship DDP

• The alternative (keeping DAP) and why it’s usually riskier

• A practical checklist for Shopify + courier + paperwork

• Common mistakes and when to get advice

• …and more!

Let’s dive in!

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Power to you,

Think Team 🙏

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If you’re selling shares of your CCPC, the Lifetime Capital Gains Exemption (LCGE) can be the difference between a life-changing after-tax result and a costly surprise.

The LCGE is a personal tax break that can shelter a large portion of your capital gain when you sell qualified small business corporation shares (QSBC shares … but only if your company meets strict tests at the time of sale and during the two years before the sale.

In this in-depth blog post we cover:

• What the LCGE is (and what it is not)

• The LCGE limit for 2026 (and recent years)

• Who can claim the LCGE (and who cannot)

• What counts as “QSBC shares” (the rules sellers must meet)

• The 90% and 50% asset tests 

• Common LCGE deal-killers for CCPC sellers

• Pre-sale checklist (what to do 12-24 months before closing)

• …and more!

Let’s dive in!

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Power to you,

Think Team 🙏

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In Canadian M&A, “asset sale vs share sale” isn’t just legal structure - it changes who takes on risk, how tax is paid, and what the business is actually worth after tax.

Buyers often prefer asset deals to avoid inheriting historical liabilities and to “step up” the tax cost of assets.

Sellers often prefer share deals because shares can qualify for the Lifetime Capital Gains Exemption (LCGE) if the company meets the Qualified Small Business Corporation Share (QSBCS) tests.

This guide explains what asset and share deals mean for both sides, the tax issues that move price, where GST/HST can surprise you, and how to negotiate the structure without killing the deal.

In this in-depth blog post we cover:

• Asset sale vs share sale: the basics

• What buyers usually prefer (and why)

• What sellers usually prefer (and why)

• The LCGE and QSBCS: when a share sale can be worth more

• Purchase price allocation: why it changes tax for both sides

• GST/HST in an asset sale (and the Section 167 election)

• Practical negotiation levers (price, holdbacks, indemnities)

• …and more!

Let’s dive in!

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Thank You For Reading. See You Next Time!

Think Team🙏

A spousal RRSP is one of the cleanest “legal income-splitting” tools available to Canadian couples. It lets the higher-income spouse claim the RRSP deduction while building retirement income in the lower-income spouse’s hands. Done right, it can reduce lifetime tax, smooth retirement income between spouses, and help manage income-tested benefits.

In this in-depth blog post we cover:

• What a spousal RRSP is (and who does what)

• Why couples use spousal RRSPs (income splitting, lifetime tax)

• Contribution limits, deadlines, and over-contribution penalties

• The three-year attribution rule (the #1 tax trap)

• Withdrawals, withholding tax, and reporting (Form T2205)

• Planning for incorporated business owners (salary vs dividends)

• Age 71 planning: contributing when one spouse is older

• Using a spousal RRSP with the Home Buyers’ Plan (HBP)

• …and more!

Let’s dive in!

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Thank You For Reading. See You Next Time!

Think Team🙏