Corporate-Owned Life Insurance in Ottawa, ON for Incorporated Business Owners

Serving incorporated professionals, federal contractors, tech founders, and entrepreneurs across Ottawa, Kanata, and the National Capital Region.

Ottawa is home to many incorporated consultants, federal government contractors, tech founders (especially in Kanata), and medical and legal professionals. Like the rest of Ontario, Ottawa business owners face a 53.53% top marginal personal rate, corporate passive-income taxation that varies by income type, and Ontario's Estate Administration Tax on estates that require a certificate. Corporate-owned life insurance, the insured retirement program, and the individual pension plan are worth reviewing with your accountant as retained earnings accumulate.

Ottawa & Ontario's Tax Landscape in 2026

Ottawa business owners pay the same Ontario rates as Toronto: an 11.5% general provincial corporate rate (small business rate decreasing from 3.2% to 2.2% effective July 1, 2026), a 53.53% top personal rate, passive investment income taxed by type with the AAII grind applying between $50,000 and $150,000 of adjusted aggregate investment income, and Estate Administration Tax when an estate certificate is required. Many Ottawa incorporated consultants accumulate retained earnings from federal-government and tech contracting income, which makes it worth reviewing how that surplus is invested.

  • ON Top Marginal Rate: 53.53%
  • ON General Corporate Rate: 11.5% provincial
  • AAII Grind Range: $50K–$150K
  • ON Small Business Rate: 3.2%→2.2% (Jul 2026)
  • ON Estate Admin Tax: $15/$1,000 over $50K
  • Capital Gains Inclusion: 50%

How Corporate-Owned Life Insurance Works for Ottawa Business Owners

An Ottawa corporation purchases a permanent life insurance policy on the owner-shareholder and funds it from retained corporate earnings. Growth inside a qualifying exempt policy generally accumulates without annual accrual taxation. At death, the corporation generally receives the death benefit tax-free, and the portion above the adjusted cost basis can be credited to the Capital Dividend Account, allowing a capital dividend subject to a valid election. Because the insurance proceeds are paid to the corporation, they are not themselves personal estate assets for Ontario Estate Administration Tax purposes, though EAT can still apply to other personal estate assets.

Strategies for Ottawa business owners

  • Corporate-Owned Life Insurance — Review whether redirecting a portion of Ottawa corporate retained earnings into a tax-exempt policy fits your plan, with growth generally accumulating without annual accrual taxation and proceeds structured through the Capital Dividend Account.
  • Insured Retirement Program — Use your corporate-owned policy as collateral for a properly structured retirement loan, generally not treated as income when received, subject to lender terms and your tax facts — worth comparing against RRIF income.
  • Individual Pension Plan — Ottawa business owners and incorporated consultants over 40 may be able to shelter more than the RRSP limit in an individual pension plan, fully deductible by the corporation.
  • Estate Freeze Planning — Lock in today's value of your Ottawa business, and plan to fund a future tax liability with corporate-owned life insurance.

Who we serve in Ottawa

  • Federal Government Contractors — Ottawa incorporated consultants serving federal departments often accumulate retained earnings. Corporate-owned life insurance is one option worth reviewing as that surplus grows.
  • Tech Founders (Kanata) — Kanata's tech sector produces founders and engineers with corporate surplus — candidates to evaluate corporate-owned life insurance and the individual pension plan.
  • Doctors & Healthcare Professionals — Ottawa physicians with professional corporations often review corporate-owned life insurance and the individual pension plan for retirement planning beyond RRSP limits.
  • Lawyers & Accountants — Ottawa professional services partners often use corporate-owned life insurance to help fund buy-sell agreements and manage the AAII grind on surplus earnings.

Frequently asked questions

Does GOALD serve incorporated business owners in Ottawa, ON?

Yes. Goald & Co works with incorporated business owners across Ottawa and the National Capital Region on corporate-owned life insurance, the insured retirement program, and related tax-planning strategies, coordinating with your accountant to keep any strategy aligned with CRA rules.

Is corporately owned life insurance taxable in Ontario?

Premiums paid by an Ontario corporation for a non-group policy insuring an individual are generally not subject to Ontario Retail Sales Tax and are generally not tax-deductible. The death benefit is generally received by the corporation tax-free under the federal Income Tax Act, and the portion exceeding the adjusted cost basis can be credited to the Capital Dividend Account for a capital dividend, subject to a valid election.

How much does corporate-owned life insurance cost for an Ottawa business?

Premium levels vary by corporation and should be modeled with a current carrier illustration based on retained earnings, desired death benefit, and objectives — there is no single premium figure that applies to every business.

How does corporate-owned life insurance relate to Ontario's Estate Administration Tax in Ottawa?

When the Ottawa corporation owns the policy, the death benefit is generally paid directly to the corporation rather than included in the shareholder's personal estate, so it isn't itself subject to EAT. EAT can still apply to the shareholder's shares and other personal estate assets if an estate certificate is required, at $15 per $1,000 above the first $50,000 of value.

How should an Ottawa business owner choose an advisor for corporate insurance planning?

Look for a licensed Ontario advisor who works across multiple carriers rather than a single insurer, is transparent about compensation, is willing to coordinate with your accountant and lawyer, and can provide comparative illustrations rather than a single projected outcome.

Sources and tax notes

This page is general information only and is not tax or legal advice. Tax rates, thresholds, and rules depend on your specific facts and the applicable tax year, and are subject to change. Coordinate any strategy with your own accountant and lawyer before proceeding. Policy values referenced are illustrated, not guaranteed, unless a specific value is guaranteed in the insurance contract.

Last reviewed: August 2026

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