03/31/2026
For a Canadian business owner, the โdonโt pay 50% when you withdraw" message is usually referring to the top personal tax rate on salary/dividends in Canada, especially in provinces like Alberta where the combined rate can approach ~50 % or higher, depending on income type and year.
The โbetter wayโ is usually one (or a combination) of 4 corporate extraction strategies noted below.
๐จ๐ฆ๐ ๐๐ข๐ฅ๐ฃ๐ข๐ฅ๐๐ง๐ ๐๐ฆ๐ฆ๐๐ง๐ฆ ๐ง๐ข ๐ฅ๐๐ฃ๐ข๐ฆ๐๐ง๐๐ข๐ก ๐๐จ๐ง๐จ๐ฅ๐ ๐ช๐๐ง๐๐๐ฅ๐๐ช๐๐๐ฆ ๐ฆ๐ข ๐ง๐๐๐ฌ ๐๐ข๐ ๐ ๐ข๐จ๐ง ๐๐ฆ ๐๐ข๐๐ก๐ฆ, ๐๐๐ ๐๐๐ฉ๐๐๐๐ก๐๐ฆ, ๐๐๐ฃ๐๐ง๐๐ ๐๐๐๐ก๐ฆ, ๐ข๐ฅ ๐๐ฆ๐ง๐๐ง๐ ๐ฃ๐ฅ๐ข๐๐๐๐๐ฆ ๐๐ก๐ฆ๐ง๐๐๐ ๐ข๐ ๐๐จ๐๐๐ฌ ๐ง๐๐ซ๐๐๐๐ ๐๐๐ฉ๐๐๐๐ก๐๐ฆ ๐ข๐ฅ ๐๐ก๐๐ข๐ ๐.
๐๐ฒ๐ฟ๐ฒ ๐ฎ๐ฟ๐ฒ ๐๐ผ๐บ๐ฒ ๐ฑ๐ฒ๐๐ฎ๐ถ๐น๐:
๐ญ) ๐๐ผ๐ฟ๐ฝ๐ผ๐ฟ๐ฎ๐๐ฒ-๐ข๐๐ป๐ฒ๐ฑ ๐๐ถ๐ณ๐ฒ ๐๐ป๐๐๐ฟ๐ฎ๐ป๐ฐ๐ฒ (๐ ๐ข๐ฆ๐ง ๐๐๐๐๐๐ฌ) - ๐๐ผ๐ ๐ถ๐ ๐๐ผ๐ฟ๐ธ๐
๐ฌ๐ผ๐๐ฟ ๐ฐ๐ผ๐ฟ๐ฝ๐ผ๐ฟ๐ฎ๐๐ถ๐ผ๐ป ๐ต๐ฎ๐ ๐ฟ๐ฒ๐๐ฎ๐ถ๐ป๐ฒ๐ฑ ๐ฒ๐ฎ๐ฟ๐ป๐ถ๐ป๐ด๐.
I๐ป๐๐๐ฒ๐ฎ๐ฑ ๐ผ๐ณ:
โข paying yourself a dividend
โข losing ~45โ50% personally
โข investing the after-tax leftovers
๐ง๐ต๐ฒ ๐ฐ๐ผ๐ฟ๐ฝ๐ผ๐ฟ๐ฎ๐๐ถ๐ผ๐ป:
โข buys a participating whole life or UL policy
โข corporation is owner + beneficiary
โข cash value grows tax-sheltered inside the policy
โข on death, death benefit flows tax-free to the corp
โข most of the death benefit is credited to the CDA
โข CDA can then be paid to heirs tax-free
๐๐ผ๐ฟ ๐บ๐ผ๐ฟ๐ฒ ๐ถ๐ป๐ณ๐ผ ๐ผ๐ป ๐๐ต๐ฒ๐๐ฒ ๐ฎ๐ฑ๐ถ๐๐ผ๐ป๐ฎ๐น ๐๐ต๐ฟ๐ฒ๐ฒ, ๐ท๐๐๐ ๐น๐ฒ๐ ๐บ๐ฒ ๐ธ๐ป๐ผ๐ ๐ฎ๐ป๐ฑ ๐ ๐ฐ๐ฎ๐ป ๐ฝ๐ฎ๐๐ ๐ถ๐ ๐ผ๐ป ( ๐ป๐ผ๐ ๐ฒ๐ป๐ผ๐๐ด๐ต ๐ฟ๐ผ๐ผ๐บ ๐ผ๐ป ๐๐ต๐ถ๐ ๐ฝ๐ผ๐๐ ๐๐ผ ๐ถ๐ป๐ฐ๐น๐๐ฑ๐ฒ )
๐ฎ) ๐๐ป๐๐๐ฟ๐ฒ๐ฑ ๐ฅ๐ฒ๐๐ถ๐ฟ๐ฒ๐บ๐ฒ๐ป๐ ๐ฃ๐น๐ฎ๐ป / ๐๐บ๐บ๐ฒ๐ฑ๐ถ๐ฎ๐๐ฒ ๐๐ถ๐ป๐ฎ๐ป๐ฐ๐ถ๐ป๐ด ๐๐ฟ๐ฟ๐ฎ๐ป๐ด๐ฒ๐บ๐ฒ๐ป๐ - ๐๐ถ๐๐ถ๐ป๐ด ๐๐ฒ๐ป๐ฒ๐ณ๐ถ๐๐
๐ฏ) ๐๐ผ๐น๐ฑ๐ฐ๐ผ + ๐๐ฎ๐ฝ๐ถ๐๐ฎ๐น ๐๐ถ๐๐ถ๐ฑ๐ฒ๐ป๐ฑ ๐๐ฐ๐ฐ๐ผ๐๐ป๐
4) ๐๐๐๐ฎ๐๐ฒ ๐๐ฟ๐ฒ๐ฒ๐๐ฒ / ๐ง๐ฟ๐๐๐ / ๐ฃ๐ถ๐ฝ๐ฒ๐น๐ถ๐ป๐ฒ ๐ฃ๐น๐ฎ๐ป๐ป๐ถ๐ป๐ด
๐ช๐๐๐ฅ๐ ๐ง๐๐๐ฆ ๐๐๐ก ๐๐ข ๐ช๐ฅ๐ข๐ก๐
This is the important part.
These strategies are excellent when properly designed, but dangerous if not.
Lavern Rankin
https://ovou.com/lavernrankin
