A small business corporation is generally entitled to a low rate of tax (just 11 per cent on average across Canada) The problem is that the PSB rules will deny the small business deduction and thereby prevent certain people from taking advantage of the lower corporate tax rate. This is the case when, like Charlie, a person is more akin to an “incorporated employee” than a self-employed individual. The CRA has completed Phase 1 of its pilot project on PSBs.