The bank balance is the wrong dashboard
Planning decisions in this trade have to be made against earned margin, because the cash arrives long before the earning does. A strong spring of signed contracts fills the account with other people's money: deposits you still owe back if the factory misses, the measure was wrong or the customer cancels inside their rights. So the first thing our Tax Planning & Advisory work establishes is a simple discipline: draws, bonuses and equipment splurges are sized from installed, invoiced margin, and the float is treated as spoken for until each job is in the wall.
That one habit quietly fixes the classic spring failure, where a generous shareholder draw in May meets a manufacturer's payment run in July and the line of credit fills the gap at interest.
Pay yourself off the install curve, not the sales curve
Signed contracts are a forecast; installed jobs are income. We set a level salary at the start of the fiscal year, sized so payroll, RRSP room and CPP build evenly through the slow months, then decide the dividend top-up only after the fall install push has converted backlog into revenue the books can show. Deciding the top-up from November's installed margin rather than June's signed contracts keeps you from paying personal tax on jobs that later cancel or remake.
Instalments follow the same logic. Corporate instalments reset after each T2 is filed, so a breakout year gets priced into next year's payments deliberately, and a weak booking spring is a reason to revisit the calculation before the December payment, not after it.
Pick a year-end where the backlog is thinnest
A December 31 year-end lands mid-season for most window companies: winter installs are running, the fall book is half-converted and the open-order list is long. We usually point the fiscal year at late winter, once the previous season's installs have wrapped and before the spring show circuit refills the book. The advantages compound. The deposit reserve on the T2 is small because few orders are open, the year-end inventory count catches a quiet warehouse, the corporate balance comes due before the busy season instead of during it, and the T2 is finished while the phones are still slow.
Watch the float turn into a tax problem
A company that holds customer deposits and retains profit at the small-business rate accumulates cash, and cash earns passive income. Once adjusted aggregate investment income passes $50,000 in a year, the $500,000 small-business limit shrinks by $5 for every extra dollar and is gone at $150,000, which drags active profit from roughly 12.2% combined in Ontario toward the general rate. Interest on the float counts, so this is not a problem you can invest your way around.
The honest levers are timing and structure. We time capital gain realizations across years, point surplus cash at debt, equipment and the winter payroll float before it compounds, and when retained cash truly outgrows the operating company, Corporate Restructuring can move it behind a holding company for creditor protection. What a holding company does not do is reset the passive-income math: the grind is shared across associated corporations, so anyone promising a holdco fixes it is selling paperwork.
The decisions, on a calendar
Most of what tax planning saves in this trade comes from making each call inside its window:
| Decision | Best window | Why then |
|---|---|---|
| Set the owner's salary | First month of the fiscal year | Payroll, RRSP room and CPP accrue evenly instead of in a December scramble |
| Bulk order toward a rebate tier | Before the manufacturer's program year closes | Tiers are earned on program-year purchases, which rarely match your fiscal year |
| Buy the van or the showroom fit-out | Well before year-end | CCA needs the asset available for use, not sitting on order |
| Dividend top-up | After the fall installs are booked | Decided from earned margin, not from the deposit float |
| RRSP contribution | First 60 days of the calendar year | Still counts against the prior personal year, decided from closed books |
The capital items carry their own arithmetic: install vans depreciate in Class 10 at 30%, showroom displays and racking in Class 8 at 20%, and the quoting computers in Class 50 at 55%, so what you buy in the last quarter changes this year's bill by different amounts. These are exactly the calls our decision guides exist for, and for a Mississauga or GTA dealer they get made in a scheduled planning meeting, not discovered at filing time.
