Last updated: Mar. 24, 2025 

Alberta Budget 2025 Highlights

On February 27, 2025, Alberta’s President of Treasury Board and Minister of Finance, Nate Horner, presented the province’s Budget. The Budget does not change corporate income tax rates but does:

• Introduce a new 8% personal income tax bracket for income up to $60,000, effective January 1, 2025 (one year earlier than expected).
• Increase education property tax rates for 2025-26.
• Propose new administrative penalties to address contraband tobacco.
• Adjust fiscal projections due to uncertainty surrounding U.S. tariffs, presenting several economic outlooks to account for potential American trade policies and Canadian retaliatory measures.

 Fiscal Overview & Projections

 The Budget significantly revises Alberta’s 2024-25 fiscal outlook, projecting a $5.8 billion surplus (up from the previously expected $0.4 billion surplus). However, it anticipates deficits in the coming years:

Year	Projected Surplus / (Deficit)
2025-26	($5.2 billion)
2026-27	($2.4 billion)
2027-28	($2.0 billion)

 Additionally, the Budget accounts for potential U.S. tariffs of 10% on energy products and 15% on other goods, which could impact Alberta’s economy.

 Top 3 Considerations for Small Business Owners, Farmers & Individuals

1. Personal Tax Savings & Payroll Adjustments

• Employees will see lower payroll deductions after July 1, 2025 due to the 8% tax rate on the first $60,000 of income.
• Those claiming more than $60,000 in non-refundable tax credits should assess how the new tax credit affects their tax liability.

2. Higher Property & Fuel Costs for Small Businesses & Farmers

• Property taxes will increase in 2025-26, impacting farmers and business owners.
• Higher locomotive fuel tax may raise transportation costs for industries reliant on rail freight.

 3. Trade & Business Adaptation Strategies

•  Small businesses and agriculture producers should prepare for potential U.S. tariffs and explore diversification opportunities supported by the government.

 Key Tax & Policy Changes

 Personal Tax Measures

• New 8% tax rate on the first $60,000 of income (down from 10%), providing an estimated tax savings of up to $750 per individual.
• Originally set for phased implementation in 2026-2027, this tax cut is being implemented early due to improved fiscal conditions.
• Personal tax bracket indexation begins in 2026, with a 2% cap on adjustments.
• New supplemental non-refundable tax credit ensures that individuals with over $60,000 in non-refundable tax credits will not experience an unintended tax increase.
• Payroll deduction updates will take effect after July 1, 2025, meaning employees may not see immediate changes in their take-home pay.

 Top Alberta Personal Tax Rates (2025-2026) 

Taxable Income	Ordinary Income	Capital Gains	Eligible Dividends	Non-Eligible Dividends
Over $362,961	48.00%	24.00%	34.31%	42.31%
$253,414 – $362,961	47.00%	23.50%	32.93%	41.16%

 Ending of Certain Tax Credit Programs

• Alberta Climate Leadership Adjustment Rebate (eliminated in 2019) and Alberta Family Employment Tax Credit (eliminated in 2020) will be fully discontinued after December 31, 2025.
• Individuals who may still qualify for these programs must contact the Canada Revenue Agency before the sunset date.

 Business & Corporate Tax Measures

• No new corporate tax measures or changes to the $500,000 small business limit.
• Corporate tax rates remain unchanged:

 2025 Combined Federal & Alberta Corporate Tax Rates 

Category	Alberta	Federal + Alberta
General & M&P Income	8%	23%
CCPC Active Business Income (≤ $500,000)	2%	11%
CCPC Investment Income	8%	46.67%

 Economic & Trade Policies

•  Alberta is preparing for potential U.S. tariffs, which could impact energy and other exports.
• Trade diversification strategies aim to expand Alberta’s global market reach and reduce dependency on U.S. trade.
• Additional support for farmers and agriculture processors to strengthen value-added exports.

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