Introduction
Canada's tax system is federal-provincial, and for incorporated physicians, the province of practice determines a meaningful portion of the total tax bill. Ontario, British Columbia, and Alberta — three of the largest physician markets in Canada — have materially different provincial corporate and personal tax rates, different OHIP/MSP/AHCIP billing structures, and different professional corporation regulatory frameworks.
Provincial Corporate Tax Rates (2026)
Province | Small Business Rate | General Rate
Ontario | 3.2% provincial + 9.0% federal = 12.2% combined | 11.5% + 15% = 26.5%
British Columbia | 2.0% + 9.0% = 11.0% | 12.0% + 15% = 27.0%
Alberta | 2.0% + 9.0% = 11.0% | 8.0% + 15% = 23.0%
Key difference: Alberta's general corporate rate is the lowest of the three provinces — at 23.0%, it is 3.5 percentage points below Ontario's 26.5%. For a physician corporation with significant income above the SBD limit, this difference is material.
Provincial Personal Tax Rates (2026, Top Marginal)
Province | Top Marginal Rate (salary/interest) | Non-Eligible Dividend | Eligible Dividend
Ontario | ~53.53% | ~47.74% | ~39.34%
British Columbia | ~53.50% | ~48.89% | ~36.54%
Alberta | ~48.00% | ~42.31% | ~34.31%
Key difference: Alberta has no provincial surtax and a significantly lower top personal marginal rate — approximately 5.5 percentage points below Ontario and BC. For a physician drawing significant salary or dividends personally, the Alberta difference is the largest variable.
The Integrated Tax Comparison
For a physician corporation earning $400,000 of net active income and distributing $200,000 as non-eligible dividends:
Ontario: Corporate tax on $400,000 at 12.2% = $48,800. Personal tax on $200,000 of non-eligible dividends ≈ $79,400. Total = $128,200.
BC: Corporate tax = $44,000. Personal tax on $200,000 of non-eligible dividends ≈ $82,700. Total = $126,700.
Alberta: Corporate tax = $44,000. Personal tax on $200,000 of non-eligible dividends ≈ $63,500. Total = $107,500.
Alberta's total tax at this income level is approximately $20,700 below Ontario's. The advantage is almost entirely on the personal side — Alberta's lower top marginal rate on dividends is the primary driver.
Professional Corporation Regulatory Differences
Ontario: Medical professional corporations are regulated by the CPSO. The MPC must be a prescribed corporation with shares held only by the physician or eligible family members.
British Columbia: Physician corporations in BC are regulated by the College of Physicians and Surgeons of British Columbia. Similar restrictions on share ownership.
Alberta: The Health Professions Act governs professional corporations in Alberta. The general structure is similar, but some administrative details of setup and ongoing requirements differ.
The MSP/AHCIP Billing Structure
Ontario — OHIP: Fee-for-service billing through OHIP, with the physician's billing number generating payments to the MPC through an assignment arrangement.
BC — MSP: Medical Services Plan billing, with the physician billing through their practice number. The assignment to a professional corporation follows the same general principle as Ontario, though the administrative details differ.
Alberta — AHCIP: Alberta Health Care Insurance Plan billing. Alberta has had specific rules about billing assignment to professional corporations that are worth confirming with the CPSA and a local CPA.
The Decision to Relocate
The provincial tax comparison above is not an argument for relocation. A physician's practice, family ties, and professional network are not tax variables. But for physicians who are genuinely mobile — finishing residency, considering a new practice environment, or exploring locum work in multiple provinces — understanding the provincial tax difference is part of the full picture.
When to Speak With a CPA
For any physician considering a change of province, a CPA in both the current and intended province should be consulted — to model the specific transition year tax, the professional corporation registration requirements in the new province, and the ongoing income comparison.