Well, if the combined individual marginal tax rate in Ontario is 53.53% (as you quote), then it's pretty easy to see how adding the combined small business tax rate (which averages 15%) would push that towards 70%. It's not like small business owners only pay the business tax rates. They also must pay taxes at their individual marginal rate when they take money out of the business. And if you do the math, you'll see there is only a small advantage to taking money out as dividends vs. salaries. Some say you save CPP contributions, which is true. But you also forgoe CPP payouts when you retire, so you lose later if that's your primary strategy for paying yourself.