Overview

We are committed to balancing the budget through modest spending restraint, while fostering a business climate that supports jobs creators. This approach will increase investment, create jobs and generate additional tax revenue without introducing harmful tax increases.

Download: Complete Tax Plan Chapter 2020-23 Fiscal Plan (PDF, 6.7 MB)

Alberta's tax advantage

Albertans and Alberta businesses continue to pay less in overall taxes compared to other provinces, with low personal and corporate income taxes, and no sales tax, health premium or payroll tax.

Albertans and Alberta businesses would pay at least $14.4 billion more in taxes if Alberta had the same tax system as any other province.

Chart 1: Alberta's Tax Advantage, 2020-21 ($ billions)

 

Alberta's Tax Advantage, 2020-21 ($ billions)
Alberta 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 February 7, 2020. This comparison includes personal and corporate income tax, sales tax, fuel tax, carbon charges (excluding the federal carbon pricing backstop), tobacco tax, health premiums, payroll tax, liquor tax and markups, land transfer tax and other minor taxes.

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’s 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

Alberta's corporate tax rate has already been reduced from 12% to 10% as part of the Job Creation Tax Cut, and there are two more reductions scheduled. It will reach:

  • 9% on January 1, 2021
  • 8% on January 1, 2022

When it hits 8%, Alberta’s combined federal-provincial corporate tax rate will be 30% lower than the next lowest province and lower than 44 U.S. states, making our province one of the most competitive places to invest in North America.

The corporate tax reduction will benefit more than 100,000 businesses annually across Alberta, of which 75% also file taxes as small businesses.

Major investments take time to plan, but the Job Creation Tax Cut has already been credited with boosting business investment, including the Canadian Association of Petroleum Producers (CAPP) $2 billion increase in its members’ 2020 investment plans.

Tax plan updates

Budget 2020 provides more details on several tax measures, including:

  • introducing a tax on vaping devices and vaping liquids to help discourage youth from buying these products
  • extending the tourism levy to short-term rentals listed with online companies, to level the playing field among temporary accommodation providers

Vaping products tax

Alberta will introduce a 20% tax on the retail sale of vaping products to discourage use among young people.

According to recent Health Canada data, nearly 20% of students in grades 7-12 have used vaping products in the last 30 days, up from 4.8% in 2014-15.

Alberta’s vaping tax will be similar to British Columbia’s, including the same 20% rate. Further details, along with the implementation date of the vaping tax, will be announced with the introduction of the legislation in Spring 2020 and associated regulations.

Table 1: Taxable vaping products

Product Type Taxable
All vaping devices (e.g., pens, open systems, pod and cartridge devices) and related accessories  
All e-liquids, including cannabis e-liquids  
Other DIY vaping products (e.g., propylene glycol, vegetable glycerin, nicotine solutions, flavourings) sold for vaping  
Pharmaceutical products approved by Health Canada with a Drug Identification Number (e.g., smoking cessation products)  
Tobacco and heat-not-burn tobacco products, hookah/shisha  
Non-vaping cannabis products  

Short-term rentals

Alberta’s 4% tourism levy will be extended to short-term rental accommodations listed with online marketplaces, such as Airbnb, HomeAway and Vacation Rental by Owner (VRBO).

Hotels and most other temporary accommodation providers are already required to collect the levy. Applying the tourism levy more equitably will level the playing field in this industry.

To minimize red tape for owners who do not list their properties on online marketplaces and who only occasionally rent out their accommodations, a new exemption will be applied when:

  • the price of the rental is less than $30 per day (or $210 per week), or
  • the operator has gross revenue of less than $5,000 annually from the rental of their temporary accommodations in Alberta

These changes are expected to take effect in the summer of 2020, with legislation implementing these changes introduced in spring 2020. Additional details will be provided at that time.

The Alberta Child and Family Benefit

As announced in Budget 2019, the new Alberta Child and Family Benefit (ACFB) will begin on July 1, 2020.

The new benefit

  • will deliver about $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 payments will be made in:

  • August 2020
  • November 2020
  • February 2021
  • May 2021

Chart 2: Alberta Child and Family Benefit by Income, 2020-21

Alberta Child and Family Benefit by Income, 2020-21
Source: Alberta Treasury Board and Finance. Working component benefits are phased in on family working income. Base component and working component benefits are both phased out on family net income.

Education property tax

The education property tax provides stable funding for Alberta’s education system. It supports all public and separate school students and helps pay for instructional costs, including teacher salaries, textbooks and other classroom resources.

As indicated in Budget 2019, revenue from the education property tax will be increased by population growth plus inflation. As a result, education property tax revenue will increase by 3.4% in 2020-21.

This will help return the proportion of education costs covered by the tax closer to historical levels.

Chart 3: Provincial and Municipal Property Tax Revenue, 1994 to 2018

Provincial and Municipal Property Tax Revenue, 1994 to 2018
Sources: Alberta Treasury Board and Finance and Alberta Municipal Affairs

Budget documents

Budget 2020 Fiscal Plan (PDF, 6.7 MB)

Budget 2020 Highlights (PDF, 1.7 MB)

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.