Canadian Controlled Private Corporations (CCPC) have a low rate of tax (known as the Small Business Deduction) on their operating business income that is below $400,000 per year.
An active business is defined any business carried on by the corporation other than a specified investment business or a personal services business and includes an adventure or concern in the nature of trade.
Active business income includes all income from a business including incidental income relating to business activities including interest earned on cash deposits normally used for operations. Active business income does not include income earned from a personal services business or a specified investment business.
In general terms Active Business Income can be thought of as the income earned from regular business operations but does not include investment income in a holding company or income from being an incorporated employee.