Three ways money leaks out of a Canadian corporation — while you build it, when you pay yourself, and when you die. Run your own numbers. Honest Ontario math, every assumption editable, nothing inflated.
Each bar is the personal tax on $100,000 taken out at the top Ontario bracket (income above roughly $258,000 in 2026), using the rates in the assumptions panel below.
The dividend rate depends on how the profit was taxed inside the corporation. Profit taxed at the small business rate comes out as non-eligible dividends (47.74% top rate in 2026, rising to 48.89% on January 1, 2027). Profit taxed at the general corporate rate builds GRIP (the general rate income pool) and comes out as eligible dividends (39.34% top rate). Below the top bracket, every rate is lower.
We assume the shares are worth about the retained earnings and were bought for next to nothing, with no growth and today's rates.
Wind-up route (headline): the retained earnings come out to the heirs as non-eligible dividends at the top rate. Capital gains route: the deemed sale of the shares at death (ITA s.70(5)) is taxed as a capital gain, only half of which is taxable, and pipeline planning keeps that treatment.
A properly administered estate pays one of these, not both. Post-mortem strategies (pipeline planning, the s.164(6) loss carryback) decide which, and corporate-owned life insurance with the capital dividend account reduces the bill further. The unplanned number is the point of the conversation, not a prediction.
None of the numbers above are a prediction — they're what happens by default when nobody plans. Here's the shape of the fix for each one:
Corporate dollars redirected into an insurance-sheltered structure grow without generating annually taxed passive income — no yearly tax drag on that growth.
Not every dollar has to leave as salary or dividends. A long-term plan decides what you take, when, and in what form — and leaves the rest compounding inside the structure.
Corporate-owned life insurance proceeds credit the capital dividend account — so money can flow to your estate as tax-free capital dividends instead of the taxed default.
Yes — and we mean it. Bring them to the conversation, or we'll walk them through the numbers directly in a 15-minute call. The plan only works if the person who files your return is on side.
The strategies often use corporately-owned life insurance as the chassis — that's where the tax treatment comes from. We're straight about exactly what it is, what it costs, and the trade-offs before you're asked to decide anything.
There are real trade-offs: these are long-term structures, early-year cash values can sit below what's been paid in, and carrier dividend scales can change. You'll see all of it in writing — we show the downsides unprompted.
The Corporate Wealth Shield™ is our framework for putting these in place — in the right order, coordinated with your accountant. Bring these numbers to a free Gap Analysis and we'll show you which leaks apply to your structure.
Book Your Free Gap Analysis15 minutes. No obligation. You keep the analysis either way.
Understand what's behind these numbers: Passive income and the small business deduction · Corporate-owned life insurance
For discussion purposes only. All figures are illustrative estimates based on the rates in the assumptions panel (Ontario defaults, 2026) and are not tax, legal, or financial advice. Actual liability depends on your corporate structure, adjusted cost base, RDTOH and GRIP balances, shareholder agreements, and individual circumstances. Open “How we calculated this” under any number to see the method, and review every strategy with your accountant and lawyer before acting.