Your client is an individual who is the sole shareholder of a private corporation that is not a CCPC. The client expects the corporation's income and expenses for the coming year to be as follows:

• Revenues 1,265,000
• Cost of Sales 690,000
• Operating expenses 172,500

Your client needs annual cash of $250,000 for their lifestyle, and wants to know what is the difference in total taxes between these two alternatives: (a) withdrawing this amount of cash in dividends (b) withdrawing this amount of cash in salary.

Your client is a resident of Alberta and is in the highest combined federal and provincial tax rate. All dividends paid by the corporation to the individual shareholder are eligible dividends, and the individual shareholder does not have any income other than dividends or salary.

What would be the total corporate and individual taxes paid under each alternative above ((a) and (b))? Note: for this question only, ignore (1) any possible dividend gross-up and (2) any possible salary withholdings such as income tax, CPP, etc.