March 8, 2024

Prepared by Danny Guérin et Myriam Vallée, Andersen in Montreal (Canada)

Overview

Alberta’s government has announced changes to its provincial tax laws in its budget 2024 A Responsible Plan for a Growing Province. This comprehensive summary highlights the key changes that will influence the Albertans’ tax environment in the coming years.

Personal Income Tax Measures:

Albertans benefit from low personal income taxes due to high basic personal and spousal amounts, alongside high tax bracket thresholds. Additionally, Alberta consistently adjusts income tax bracket thresholds and tax credit amounts to account for inflation. In 2024, thresholds and credit amounts are set to increase by 4,2%.

Budget 2024 also announced an implementation schedule for a new 8% personal income tax bracket on the initial $60,000 of income. Based on Alberta’s current fiscal plan, and subject to maintaining sufficient fiscal capacity, a new 9% bracket will be introduced for income up to $60,000 in 2026, followed by a reduction to 8% in 2027.

Corporate Income Tax Measures:

Corporate tax rates remain unchanged for 2024. Alberta features the lowest corporate income tax rate in Canada and among the lowest in North America.

Other Tax Measures

Attraction Bonus

The Alberta Budget 2024 introduces the Attraction Bonus initiative, offering a $5,000 refundable tax credit to individuals relocating to Alberta after the program launch in April 2024 and meeting specific eligibility criteria.

These criteria will include working full time in specified occupation, filing their 2024 taxes in Alberta, and residing in the province for a minimum of 12 months.

Education Property Tax Freeze

Alberta’s education property tax serves as a funding source for the province’s education system, supporting public and separate schools and help financing teacher salaries, textbooks, and classroom resources. It is collected by municipalities alongside municipal property taxes.

For the upcoming year, education property tax rates will remain frozen at $2.56 per $1,000 for residential and farmland properties, and $3.76 per $1,000 for non-residential properties. Despite rate freezes, the growth in property values and increased development indicates a sustained contribution to education funding.

Vaping Tax

Starting January 1, 2025, vaping substances sold in Alberta will be subject to a provincial tax at the same rates as the federal government: $1 for every 2 milliliters (mL) or grams (g), or any fraction thereof, applies to the initial 10 mL/g of vaping substances contained within the vaping device or container. Additionally, a fee of $1 per 10 mL/g, or any fraction thereof, is imposed on quantities exceeding the initial 10 mL/g. Collection and administration of such tax will be handled at no cost by the federal government.

Tobacco Tax

Starting March 1, 2024, the tax on cigarettes will rise by 2.5 cents to reach 30 cents per cigarette, while the tax on smokeless tobacco will increase by 7.5 cents to reach 35 cents per gram.

Electric Vehicle Tax

Budget 2024 introduces a new $200 annual tax on electric vehicles (EVs) to take effect on January 1, 2025. This tax will be collected upon vehicle registration and will be in addition to the existing registration fee. The tax rate is aligned with the estimated annual fuel tax paid by drivers of typical internal combustion vehicles in Alberta. Notably, hybrid vehicles are exempt from this tax.

Further details on the tax will be provided upon the introduction of legislation in fall 2024.

Land Title Charges

Alongside a base fee of $50, Alberta’s land title fees currently include variable charges of $2.00 per $5,000 of property value and $1.50 per $5,000 of mortgage value for property transfers and mortgage registrations, respectively. Alberta intends to replace these charges with a new Land Titles Registration Levy set at $5.00 per $5,000 of value for both property transfers and mortgage registrations. Legislation to enact these changes is scheduled to be introduced in spring 2024, with further details on the effective date to follow at that time.

Fuel Tax Relief Program

After a one-year hiatus on the provincial fuel tax for gasoline and diesel throughout 2023, Alberta’s oil price-based fuel tax relief program has been reinstated. This program adjusts fuel tax rates quarterly, correlating with the average West Texas Intermediate (WTI) price, ensuring that Albertans benefit from reduced fuel tax rates during periods of elevated oil prices.

Tourism Levy

Changes to the Tourism Levy Act announced in Budget 2022 which represented a commitment to mandate online platforms like Airbnb, Vrbo, and Expedia to collect and remit tourism levies on temporary accommodations booked through their platforms will take effect on October 1, 2024.

Under the amendments, online platforms will be responsible for collecting and remitting levies when payment is received from purchasers for various temporary accommodations, including short-term rentals and hotels, booked through their platforms on or after October 1, 2024.

For further information, visit  https://www.alberta.ca/budget