By Sharad Gondaliya, CPA
A common reason given for federal incorporation is “we may expand across Canada later.” For a non-resident founder, that reason does not hold up. Expanding to another province is the same process whether your corporation is an Ontario, BC or federal corporation. Here is how it works, and what changes for tax.
Step 1: Register in the new province
A corporation registers extra-provincially in each province where it carries on business. Federal incorporation does not remove this step.
Example. Your corporation starts in Toronto. Two years later it opens a Vancouver office. It files a BC extra-provincial registration, whether it is an Ontario corporation or a federal corporation.
| Where you expand | Ontario corporation | Federal corporation |
|---|---|---|
| Ontario | Home province | Ontario Initial Return within 60 days, $0 |
| British Columbia | Extra-provincial registration $350, plus $30 name request | Extra-provincial registration $350 |
| Alberta | Registration through a registry agent, Alberta agent for service, Alberta NUANS report for a named company | Registration through a registry agent, Alberta agent for service |
| Quebec | Registration $397, annual update $106 | Registration $397, annual update $106 |
The differences are small. Federal skips the BC name request and the Alberta NUANS report. Neither one justifies a resident Canadian director every year.
When registration is needed
Selling to customers in another province from your home office usually does not trigger registration. Carrying on business there does, for example:
- opening an office, store or warehouse
- hiring employees who work there
- holding property or inventory there
Step 2: Corporate income tax is shared between provinces
When a corporation has a permanent establishment in more than one province, its taxable income is allocated among them. The usual formula averages two ratios:
- the share of gross revenue earned through each province’s establishment
- the share of salaries and wages paid there
Each province then taxes its portion at its own rate. The corporation still files one T2 return.
| Province | General provincial rate | Combined with federal 15% |
|---|---|---|
| Ontario | 11.5% | 26.5% |
| British Columbia | 12% | 27% |
Step 3: Sales tax by the customer’s province
GST/HST is charged at the rate of the customer’s province, with one registration for all of Canada. Provincial sales taxes are separate:
- BC PST registration applies to sellers outside BC once their BC sales pass $10,000.
- Saskatchewan, Manitoba and Quebec have their own sales tax registration rules.
Please check these before you start selling into a new province, not after.
Step 4: Payroll in the new province
Provincial income tax is withheld based on where the employee reports for work. Some provinces also have an employer health tax. Your payroll account stays the same; the province settings change.
Step 5: Update your records
- Add the new province’s registration to your minute book.
- Tell CRA about the new establishment address.
- Register for provincial sales tax and payroll programs where needed.
- Update bank and insurance records.
How we help
We handle Ontario and BC registrations, register all CRA accounts, and coordinate other provinces with a local agent where the province requires one. Related reading: Ontario or BC vs federal corporation for non-residents.
FAQs
Does a federal corporation avoid provincial registration?
No. Corporations Canada states that a federal corporation must register in each province or territory where it carries on business.
Can an Ontario corporation hire staff in another province?
Yes, after it registers in that province. The process is the same as for a federal corporation.
Do I file a separate tax return in each province?
No for most provinces. One T2 return allocates income among provinces. Quebec and Alberta have their own corporate returns when the corporation has an establishment there.
Speak with a CPA
Please book a free consultation at gondaliyacpa.ca/consultation. We are a 2026 Xero Awarded Firm with 1300+ five-star Google reviews, and we work on AFFORDABLE flat-fee annual packages.
Sharad Gondaliya is a CPA Canada & CPA USA with 15 Years+ experience of Accounting, Tax, Payroll of Corporate Small Businesses as Tax Accountant. He is a CPA Ontario member (61040184) and holds US CPA licences in Washington and Montana and is well known among corporate small businesses for tax planning, efficient tax solutions, and affordable CPA services. Sharad is the Principal (Director) of Gondaliya CPA – Affordable CPA Firm in Canada. Licenses: CPA Ontario: 61040184 | CPA USA (MT): PAC-CPAP-LIC-033176 | CPA USA (WA): 57629 | CPA Firm License: 61330051 View Full Author Bio