The government is committed to fostering a business climate that supports Alberta workers and job creators. This approach will attract investment, increase employment and generate additional tax revenue without introducing harmful tax increases.
Download: 2020-21 Mid-year Fiscal Update and Economic Statement (PDF, 1.5 MB)
Job creation tax cut
The Job Creation Tax Cut is a long-term strategy that lays the foundation for sustained economic growth in Alberta. It is a low-rate, broad-based approach to business taxation that levels the playing field for all job creators, rather than a select few.
A low corporate tax rate:
- encourages the growth and success of all Alberta businesses and industries
- supports diversification and innovation
- leaves investment decisions up to the private sector
- encourages companies to commercialize their products in Alberta
As part of Alberta's Recovery Plan, the government accelerated the Job Creation Tax cut, reducing it to 8% a year and a half ahead of schedule. Alberta’s corporate tax rate is now among the lowest in North America, and 30% lower than the next lowest province.
This will provide businesses with greater confidence and certainty as they recover from the pandemic, freeing up resources to invest and hire Albertans. The Job Creation Tax Cut will help create sustained economic growth by rewarding innovation and success, and encouraging firms to relocate to Alberta.
Albertans and their families will benefit from this initiative, as a vast amount of research shows that workers ultimately bear the burden of corporate tax increases through lower wages. A low corporate tax rate also supports a more diverse Alberta economy, because non-resource sectors pay the bulk of corporate taxes in our province.
Innovation Employment Grant
Another significant part of Alberta’s Recovery Plan is the introduction of the Innovation Employment Grant, or IEG, which will be available to businesses on January 1, 2020.
This grant will be one of the most generous of its kind in Canada, and its incremental approach will also be unique within the country.
The IEG will help attract start-ups and high-growth firms, and will complement the Job Creation Tax Cut. Companies in the early stages of development will benefit from the IEG, but as they become more profitable they will see the benefits of Alberta’s low corporate tax rate.
Together, the Innovation Employment Grant and the Job Creation Tax Cut will support Alberta companies of all sizes and at all stages of their business cycles.
Alberta Child and Family Benefit
As originally announced in Budget 2019, the new Alberta Child and Family Benefit (ACFB) took effect on July 1, 2020.
The new benefit:
- will deliver close to $230 million to about 190,000 families in 2020-21
- provides more support to lower-income families than previous programs
- cuts administrative costs by about 50%, saving an estimated $500,000 per year
The first quarterly payment was made in August, and the next payments will be made in:
- November 2020
- February 2021
- May 2021
Chart 1: Alberta Child and Family Benefit by Income, 2020-21
Education property tax
As part of the COVID-19 outbreak response, the Alberta government cancelled the adjustment to the Education Property Tax proposed in Budget 2020. Instead, these amounts were frozen at 2019 levels. This is estimated to have saved Alberta households and businesses about $87 million in 2020-21, freeing up $55 million for households and $32 million for employers to help assist them during this difficult time.
In addition, government deferred education property tax payments for businesses for 6 months, leaving $458 million in cash with employers to help them pay employees and continue operations. For more information, visit Education property tax.
Chart 2: Provincial and Municipal Property Tax Revenue, 1994 to 2018
More budget information
A plan to get Albertans back to work, make life better and stand up for Alberta.
A summary of Alberta’s Budget 2020 economic forecast and analysis.
Revenue projections from taxes, transfers, investment income and resources.
Budget 2020 invests in the infrastructure families and communities need.