Accounting & Tax Services for Small Business in Canada

The Canadian small business compliance load

Operating a small business in Canada means managing at least seven separate compliance streams: federal corporate income tax (T2), provincial corporate income tax (combined for most provinces, separate for Alberta and Quebec), GST/HST (and possibly PST/QST/RST in some provinces), payroll source deductions (CPP, EI, federal and provincial income tax), provincial workers' compensation, provincial payroll tax (where applicable), and the owner's personal T1. Add in annual provincial corporate filings, business licence renewals, and industry-specific filings, and the average small business owner faces 50+ compliance touchpoints per year.

BOMCAS Canada is structured to consolidate this complexity. One firm, one fixed monthly fee, one point of contact, all of the compliance handled. The result is a small business owner who can focus on the business instead of the back-office.

Who we serve

• Canadian-controlled private corporations (CCPCs) with revenue from $50k to $10M
• Sole proprietors and self-employed professionals on T2125 reporting
• General and limited partnerships requiring T5013
• Family-owned operating businesses
• Service businesses (consulting, IT, marketing, design)
• Trade businesses (electrical, plumbing, HVAC, roofing, landscaping)
• Retail and online sellers
• Restaurants and food service
• Professional practices

The small business deduction — the most valuable tax provision

The Small Business Deduction (SBD) reduces the combined federal-provincial corporate tax rate to between 9% and 12.2% (depending on province) on the first $500,000 of active business income for Canadian-controlled private corporations. Compared to top personal marginal rates exceeding 47%–53% in most provinces, the SBD creates substantial tax deferral that can be invested back into the business, retained for future growth, or distributed efficiently as dividends. Several rules can grind or eliminate the SBD: passive investment income over $50,000 in a year reduces the limit by $5 for every additional $1 of passive income; taxable capital employed in Canada over $10 million reduces or eliminates the SBD; and the limit must be allocated across associated corporations. We monitor all of these annually.

Owner-manager remuneration — salary, dividend, or both

Every incorporated small business owner faces the annual question: pay myself salary, dividend, or a mix? The optimal answer depends on personal cash needs, RRSP contribution room, CPP planning, mortgage/financing requirements, the corporation's GRIP and RDTOH balances, and family income-splitting opportunities (limited by TOSI). For most incorporated business owners under age 60, a mix of salary (to generate RRSP room and CPP contributions) plus dividends (for the rest of personal cash needs) delivers the best total outcome. We model this annually with actual numbers from the corporation.

What's included in a typical small business engagement

• Year-round monthly bookkeeping with full bank and credit card reconciliation
• Quarterly or annual GST/HST returns prepared and filed
• Provincial sales tax (PST/RST/QST) compliance where applicable
• Monthly payroll for owner-managers and any employees, including CRA source deduction remittances
• Year-end T4, T4A, and T5018 information returns
• Provincial WCB/WorkSafe registration and remittances
• Year-end Compilation Engagement financial statements (CSRS 4200)
• T2 corporate income tax return (federal and provincial as needed)
• Owner-manager T1 personal tax return (and spouse where applicable)
• Annual salary vs dividend optimization with written recommendation
• Unlimited email and phone support during business hours
• Quarterly check-in call to review financial performance
• CRA correspondence handling for routine review letters

Common small business tax planning opportunities

• Maximize CCA on capital purchases in the year of acquisition
• Use the Accelerated Investment Incentive for first-year CCA on qualifying property
• Time year-end capital purchases to optimize tax
• Optimize home-office and vehicle expense claims
• Use spousal RRSP contributions for income splitting
• Time bonuses and discretionary expenses to manage taxable income
• Use the small business deduction strategically across related corporations
• Implement Health Spending Accounts for tax-efficient medical benefits
• Use individual pension plans (IPPs) for owner-managers near retirement

What Canadian businesses commonly miss about this service

Across the hundreds of Canadian businesses we work with, the same handful of issues come up repeatedly. Many small business owners delay engaging professional accounting until a crisis: a CRA review letter, an unfiled GST/HST return demand, a denied bank loan because financial statements aren't ready, or a Notice of Reassessment that arrived weeks ago. By the time we are first contacted, the cost to fix the problem is often several times what proper ongoing accounting would have cost from the start. Proactive engagement is dramatically cheaper than reactive cleanup.

The Canadian tax landscape also changes constantly. Recent changes that affect most Canadian taxpayers include the 2023 anti-flipping rule (residential real estate sold within 365 days is automatically business income, not capital gain); the Underused Housing Tax (UHT-2900 annual filing requirement for many corporations, partnerships, and trusts holding residential property even when no tax is owing — with $5,000 to $10,000 per-property failure-to-file penalties); the Quebec QST joint registration changes since 2021; the post-2018 Tax on Split Income (TOSI) rules that effectively eliminated casual income splitting through family dividends; the post-2021 $200,000 stock option vesting limit on the 50% deduction for options granted by non-CCPCs; the CSRS 4200 Compilation Engagement standard replacing the older Notice to Reader engagement; and ongoing CRA increased scrutiny on pre-construction assignments, short-term rental businesses, and cash businesses.

How BOMCAS Canada delivers this service

Every engagement begins with a written, fixed-fee engagement letter signed before any work is performed. The engagement letter describes exactly what is in scope, what deliverables you will receive, when those deliverables are due, what your monthly or project fee is, and what (if anything) is outside scope. This eliminates the hourly-billing surprise that most accounting clients fear. The only time we use hourly billing is for genuinely unpredictable items such as CRA audit response or complex one-off projects — and even then we agree to a maximum cap before starting.

Once the engagement letter is signed, you e-sign the CRA authorization (RC59 for businesses or AUT-01 for individuals), and we onboard you to the encrypted client portal with multi-factor authentication. All document exchange flows through the portal — no emailing of sensitive financial documents. Meetings happen by video conference or phone at times that work for you, including outside normal business hours when needed.

Our Canadian tax compliance philosophy

BOMCAS Canada is structured around four operating principles:

1. Tell the truth. If a tax position is aggressive, we say so. If a deduction will not survive a CRA review, we say so. If the engagement is going to cost more than originally quoted because the scope changed, we say so before doing the work.
2. Bill what we said we would bill. No surprise invoices. No scope-creep billing. If something legitimately changes scope, we discuss it and re-quote before doing the additional work.
3. Answer the phone. One-business-day response standard on client communications during normal business hours. No voicemail backlogs.
4. Specialize. Canadian tax and accounting is too complex to be a generalist. We do not do US-only tax, UK tax, or any other foreign jurisdiction in isolation. We are Canadian. Our cross-border work is always anchored by deep Canadian compliance.

What ongoing engagement with BOMCAS Canada looks like

For most clients, the ongoing relationship is structured around predictable monthly deliverables. For an incorporated small business client, that typically includes: monthly cloud bookkeeping with full bank and credit card reconciliation; quarterly or annual GST/HST returns prepared and filed; monthly payroll for owner-managers and any employees, with CRA source deduction remittances; year-end Compilation Engagement (CSRS 4200) financial statements; T2 corporate income tax return; owner-manager T1 personal tax return (and spouse where applicable); annual salary-vs-dividend optimization with written recommendation; unlimited email and phone support during business hours; one quarterly check-in call to review numbers and discuss the business; and CRA correspondence handling for routine review letters.

For a personal tax client, the ongoing engagement includes: annual T1 preparation; any required Quebec TP-1 (for Quebec residents); CRA pre-assessment and post-assessment review response when CRA requests additional documentation; Notice of Assessment reconciliation; and proactive tax planning conversations during the year about RRSP, TFSA, and FHSA contributions, major life events (marriage, kids, retirement, real estate), and any planned business or investment changes.

Frequently asked questions about engaging BOMCAS Canada

Why Canadian businesses choose specialized accounting over generalist accounting

The Canadian tax and accounting landscape has become significantly more complex over the past decade. The 2018 TOSI rules, the 2021 changes to stock option taxation, the 2022 mandatory reporting changes for trusts, the 2023 anti-flipping rule, the Underused Housing Tax, the changes to the small business deduction phase-out for passive investment income, the new CSRS 4200 Compilation Engagement standard, the continued expansion of digital sales tax rules, and the ongoing post-COVID CRA focus on cash businesses and unreported income have all required accountants to specialize more deeply. A generalist firm trying to cover personal tax, corporate tax, US tax, real estate, trusts, cross-border, and every industry vertical inevitably falls behind on the depth of expertise that any one client needs.

BOMCAS Canada is structured deliberately to maintain depth: we are Canadian-only by design; we work in industries where we have genuine specialized experience; we maintain ongoing professional education in Canadian tax law; we use Canadian-experienced staff at every level; and we coordinate with specialized partners (US-licensed cross-border, legal counsel for corporate restructuring, audit-engagement licensed practitioners) where required rather than trying to handle everything in-house.

Talk to a Canadian accountant who knows your industry

Call 780-667-5250 or submit the contact form. We respond within one business day.

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