Revenue

Updated government projections of revenue from taxes, non-renewable resources, federal transfers and investment income.

Forecast

Provincial revenue is projected to be $47.9 billion in 2018-19, or 2.1% more than the 2017-18 forecast.

While this is still lower than revenues prior to the oil price collapse in 2014, revenue is expected to continue strengthening, surpassing $50 billion in 2019-20.

Table 1: Budget 2018 Revenue (millions of dollars)

Revenue Sources 2016-17 Actual 2017-18 Forecast 2018-19 Estimate 2019-20 Target 2020-21 Target
Income and other Taxes 20,181 21,211 22,899 24,548 25,995
Non-renewable resource revenue 3,097 4,534 3,829 4,183 5,001
Transfers from Government
of Canada
7,979 7,918 8,218 8,470 8,645
Investment income 3,698 3,061 2,884 3,161 3,357
Net income from
government business enterprises
543 3,294 2,777 2,707 2,844
Premiums, fees and licenses 3,701 3,742 3,854 3,929 3,996
Other 3,094 3,121 3,419 3,617 4,010
Total revenue 42,293 46,881 47,879 50,615 53,848
Source: Treasury Board and Finance

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 $3.8 billion in 2018-19.

For more information, see the updated economic and energy price assumptions on the Economic outlook page.

Table 2: Non-renewable resource revenue (millions of dollars)

Resource revenue sources 2016-17 Actual 2017-18 Forecast 2018-19 Estimate 2019-20 Target 2020-21 Target
Bitumen royalty 1,483 2,358 1,785 2,184 2,926
Crude oil royalty 716 883 1,053 981 1,035
Natural gas & by-products royalty 520 557 541 590 585
Bonuses & sales of Crown leases 203 577 327 312 343
Rentals and fees
/ coal royalty
174 159 123 116 111
Total resource revenue 3,097 4,534 3,829 4,183 5,001
Source: Treasury Board and Finance

Carbon pricing revenue

The Climate Leadership Plan places an economy-wide price on carbon emissions through a carbon levy on heating and transportation fuels, and performance standards on large industrial emitters.

Over the next 3 years, revenue from the carbon levy and large industrial emitters will be invested in efforts to create opportunities to diversify Alberta's economy and to help households, businesses and communities save energy, reduce emissions and adjust to the carbon levy.

The carbon levy is estimated to raise $1.4 billion in 2018-19.

Even with the carbon levy, Alberta will have the third lowest provincial taxes/levies on gasoline and diesel in 2018, after Saskatchewan and Manitoba.

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

Alberta's small business corporate income tax rate was reduced from 3% to 2% effective January 1, 2017, as part of the Climate Leadership Plan to help businesses adjust to the carbon price.

The tax relief to small business owners will be worth an estimated $195 million in 2018-19.

Alberta is tied for the second-lowest small business corporate income tax rate among provinces and we continue to have the most competitive overall tax environment for small business owners.

When all taxes are taken into consideration, Alberta small business owners are better-off than they would be in other provinces.

Alberta's general corporate tax rate remains at 12%.

Personal income taxes

Alberta's tax system is indexed to inflation to ensure the value of tax credits is not eroded over time, and taxpayers are not pushed into higher tax brackets.

The basic personal and spousal amounts will increase 1.2% in 2018 to $18,915 - the highest among the provinces.

Indexing the personal income tax system is estimated to save Albertans $65 million in 2018.

Alberta's progressive, multi-rate income tax structure took effect in 2015.

Table 3: Income tax rates

Tax Rate 2017 Taxable Income Brackets 2018 Taxable Income Brackets
10% Up to $126,625 Up to $128,145
12% From $126, 625.01 to $151,950 From $128,145.01 to $153,773
13% From $151, 950.01 to $202,600 From $153,773.01 to $205,031
14% From $202,600.01 to $303,900 From $205,031.01 to $307,547
15% Above $303,900 Above $307,547
Source: Treasury Board and Finance
Note: Taxable income below the 10% bracket threshold is subject to the 10% tax rate ($126,625 in 2017 and $128,145 in 2018). Only incremental taxable income above that level is subject to higher taxes.

Alberta's tax advantage

Albertans will continue to pay the lowest overall taxes when compared to other provinces.

With all taxes combined, Albertans and Alberta businesses will pay $11.2 billion less in taxes than the next lowest province, British Columbia, and $21.5 billion less in taxes than the highest province, Newfoundland.

Chart 1: Alberta's Tax Advantage, 2018-19 (billions of dollars)

Source: Treasury Board and Finance

This graph shows the total additional provincial tax and carbon charges that individuals and businesses would pay if Alberta had the same tax system and carbon charges as other provinces. This information reflects tax rates for other provinces known as of March 9, 2018.

A minimum carbon charge of $20/tonne is assumed in 2019 for all provinces according to the federal government's carbon pricing plan. This comparison includes personal and corporate income tax, sales tax, fuel tax, carbon charges, tobacco tax, health premiums, payroll tax, liquor tax and markups, land transfer tax and other minor taxes.

Read the complete revenue chapter from the 2018-21 Fiscal Plan