Personal service businesses are a scary idea. 

Personal service business, or PSB, is essentially when the only thing separating your corporation from your contractor is the fact that you’re incorporated. In other words, if you were providing services for somebody and that is the only person that you were working for, and the only thing that they require from you is for you to be incorporated, you could be deemed to be a personal service business because otherwise you’d be an employee of theirs. 

The majority of expenses that are available to corporations are not available to a personal service business. You are able to essentially write off those same things that employees are able to write off, which isn't a whole lot. To make matters worse, your federal tax rate - instead of being 9% - now becomes 33% (plus whatever your provincial tax rate is.) It is a crazy idea to think that there's a potential for service businesses out there to be deemed to be a personal service business that have been in operation for many years.

I personally don't have any of these clients that fit into this category. The clients that I have that come close to this category not only sell services, but also rent equipment. They also are available to work for other companies and, in fact, do work for other companies or provide other services to other businesses or people. For instance, we have a consultant that also runs a landscaping yard maintenance company, which lands him safely within these personal service business rules.

If you are unsure on whether or not you fit into these categories, I suggest you talk to your accountant and make sure that you don't. Because if you do, you need to restructure and change the way that you do things.