Fiscal Plan: 2016-19 Revenue (0.6 MB)

Forecast

Provincial revenue is projected to be $41.4 billion in 2016-17, which is $1.6 billion lower than forecasted in 2015-16 and more than $8 billion lower than 2014-15.

Budget 2016 projected and actual revenue by source comparison between 2014 and 2018

Non-renewable resource revenue

Lower oil prices and their impact on the provincial economy continue to affect government revenue. Revenue from non-renewable resources is forecast at $1.4 billion in 2016-17, a level not seen in 40 years.

Actual and project revenue from non-renewable resources between 2014 and 2018.

Carbon pricing

The Climate Leadership Plan imposes an economy-wide price on carbon emissions. This is one of the most cost-effective ways to achieve a significant reduction in emissions as it provides a financial incentive for everyone, including households, businesses and large industrial emitters, to reduce greenhouse gas emissions that contribute to climate change.

The carbon price will be implemented through a new carbon levy as well as new performance standards for large industrial emitters, based on the existing Specified Gas Emitters Regulation (SGER). The system will be designed so both components work together and fuel users are not charged twice on the same emissions.

Carbon Levy

The carbon levy will be included in the price of transportation and heating fuels based on the level of GHG emissions released when the fuels are combusted - $20/tonne in 2017, and $30/tonne in 2018. Some fuels and fuel uses will be exempt, such as fuel used on farms and reserves.

Chart outlining the carbon levy rates on major fuels as of Jan 2017 and 2018.

It’s estimated to raise $274 million in 2016-17, and $1.7 billion by 2018-19. Even with the carbon levy, Alberta will have the third-lowest provincial taxes/levies on gasoline and diesel in 2017, after Saskatchewan and Manitoba.

Revenue

$9.6 billion in gross revenue will be raised from compliance payments from large industrial emitters and the carbon levy over the next 5 years.

All revenue generated by the levy will be fully reinvested in Alberta’s economy for renewable energy projects, green infrastructure and energy efficiency projects, and to support for households, businesses and communities adjusting to the carbon price.

Projected revenue from climate leadership plan initiatives between 2016 and 2018

Climate Leadership Adjustment Rebate

To help households adjust to the new carbon price, the government will issue carbon rebates to protect lower and middle income Albertans from the higher costs.

About 60% of Alberta households will qualify for the full rebate based on a Family Net Income of $47,500 for singles and $95,000 for couples and families, in 2017.

Chart outlining the estimated impacts of the carbon levy on households

Income taxes

Alberta maintains the lowest overall tax regime in Canada, with no provincial sales tax, health premium or payroll tax. Albertans across all income ranges will continue to pay the lowest overall taxes when compared to other provinces.

Business taxes

As part of the Climate Leadership Plan, Alberta’s small business corporate income tax rate will be reduced from 3% to 2% effective Jan 1, 2017, to help businesses adjust to the carbon price.

The tax relief will be worth an estimated $185 million in 2017-18 to small business owners.

Alberta is now tied with Saskatchewan for the second-lowest provincial small business rate. While Manitoba’s small business rate is lower, Alberta small business owners pay less taxes when they take money out of their business for personal use.

Alberta’s corporate tax rate remains at 12%.

Personal income taxes

Alberta’s progressive, multi-rate income tax system took effect October 1, 2015. Only the top income earners were asked to contribute a little more—93% of Alberta tax filers were not affected by this change. 2016 marks the first full year of the new graduated rate structure.

2016 Tax Rate Taxable Income Bracket
10% On first $125,000 (no change)
12% On next $25,000, from $125,000 to $150,000
13% On next $50,000, from $150,000 to $200,000
14% On next $100,000, from $200,000 to $300,000
15% Above $300,000

Albertans continue to enjoy the highest basic personal amount among provinces. In 2016, this means that no personal income tax will be paid on the first $18,451 of taxable income.