Provincial revenue is projected to be $45 billion in 2017-18, which is in line with the Budget 2016 forecast.
Table 1: Budget 2017 Revenue (millions of dollars)
|Revenue sources||2015-16 Actual||2016-17 Budget||2016-17 Forecast||2017-18 Estimate||2018-19 Target||2019-20 Target|
|Income and other taxes||20,720||21,767||20,546||21,762||23,323||24,662|
|Non-renewable resource revenue||2,789||1,364||2,430||3,754||4,226||6,628|
|Transfers from Government of Canada||7,142||7,278||7,943||7,988||7,870||8,079|
|Net income from government business enterprises||2,570||2,416||2,404||2,506||2,568||2,662|
|Premiums, fees and licences||3,574||3,649||3,646||3,683||3,770||3,863|
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 2017-18, a level well below averages over the past decade.
Table 2: Non-renewable resource revenue (millions of dollars)
|Resource revenue sources||2015-16 Actual||2016-17 Budget||2016-17 Forecast||2017-18 Estimate||2018-19 Target||2019-20 Target|
|Crude oil royalty||689||333||600||476||460||589|
|Natural gas & by-products royalty||493||151||219||455||304||523|
|Bonuses & sales of Crown leases||203||95||191||148||144||134|
|Rentals and fees||167||118||144||117||109||103|
|Total resource revenue||2,789||1,364||2,430||3,754||4,226||6,628|
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.
The carbon levy is estimated to raise $1 billion in 2017-18. Even with the carbon levy, Alberta will have the third lowest provincial taxes/levies on gasoline and diesel in 2017, after Saskatchewan and Manitoba.
Over the next 3 years, $5.4 billion in gross carbon pricing revenue will be fully invested in efforts to save energy, create opportunities to diversify Alberta's economy, and to help households, businesses and communities adjust to the carbon price and reduce emissions.
Table 3: Carbon levy revenue (millions of dollars)
|Carbon levy revenue and adjustment funding||2016-17 Forecast||2017-18 Estimate||2018-19 Target||2019-20 Target||3-Year Total|
|Gross Levy Revenue||230||1,038||1,396||1,416||3,850|
|Small business tax reduction||(40)||(175)||(190)||(200)||(565)|
|Levy revenue subtotal||100||453||656||666||1,775|
Alberta maintains the lowest overall tax regime in Canada, with no provincial sales tax, health premium or payroll tax.
As part of the Climate Leadership Plan, Alberta’s small business corporate income tax rate was 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 $175 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 tax system is indexed to inflation, ensuring that the value of tax credits is not eroded over time, and that taxpayers are not pushed into higher tax brackets. In 2017, the basic personal and spousal amounts will increase 1.3% to $18,690 – the highest among the provinces.
Indexing the personal income tax system is estimated to save Albertans $70 million in 2017.
Alberta’s progressive, multi-rate income tax system took effect October 1, 2015.
Table 4: Income tax rates
|Tax Rate||2016 Taxable Income Brackets||2017 Taxable Income Brackets|
|10%||On first $125,000||On first $126,625|
|12%||On next $25,000, from $125,000 to $150,000||On next $25,000, from $126,625 to $151,950|
|13%||On next $50,000, from $150,000 to $200,000||On next $50,000, from $151,950 to $202,600|
|14%||On next $100,000, from $200,000 to $300,000||On next $100,000, from $202,600 to $303,900|
|15%||Above $300,000||Above $303,900|
Alberta's tax advantage
Albertans across all income ranges will continue to pay the lowest overall taxes when compared to other provinces.