Last updated: Mar. 4, 2022
Last week Alberta Finance Minister Travis Toews tabled the province’s fiscal 2022-23 budget.
Budget 2022 focuses on moving Alberta forward by allocating spending towards building health system capacity and getting Albertans back to work. However, the biggest revelation of Budget 2022 is the announcement of a balanced budget for only the second time in over a decade.
The minister announced that Alberta expects to balance the budget by 2023, with an anticipated deficit of $3.2 billion for 2021-22 followed by a projected surplus of $511 million for 2022-23, $932 million for 2023-24, and $700 million for 2024-25. The success of these projected surpluses is dependent on the price of oil remaining at a minimum of $70/barrel. The recent rebound in the price of oil is propelling Alberta’s speedy recovery after the COVID-19 pandemic.
No new taxes were introduced, and the province still has no plans to bring in a sales tax, payroll tax, or health premium. No changes to personal or corporate tax rates were proposed; therefore, the personal tax rate remains at 10 per cent for Albertans who earn less than $131,220 and the top bracket remains at 15 per cent for Albertans who earn more than $314,928.
The budget sees Alberta’s share of the Education Property Tax rise by 1.5 per cent. A new tax category for smokeless tobacco products, new taxes on vaping products, and a tourism levy on short-term rental hosts were all introduced.
Personal Tax Measures
Personal income tax rates – No change
No new personal income tax rate changes were announced in this Budget 2022.
As a result, Alberta’s personal income tax rates are as follows:
Alberta’s combined federal and provincial top marginal rates for income, capital gains, and eligible dividends are as follows:
Personal Combined Federal/Provincial Top Marginal Rates
Combined Federal and Alberta Personal Tax Rates 2022
Alberta Non-Refundable Tax Credits
The government confirmed that personal tax credits for 2022 will not be indexed. The maximum tax credits amounts and actual Alberta tax credits for 2021 and 2022 are set out below.
In general, credits are multiplied by 10% to arrive at the deduction from Alberta Tax. In the case of donations and gifts over $200, the credit is 21%.
Corporate Tax Measures
Tourism Levy
The previously announced tourism levy applies to all short-term rentals offered through online marketplaces. To collect the tax more efficiently and consistently, amendments will be brought forward in 2022 to require online marketplaces to collect and remit the tourism levy on behalf of their Alberta short-term rental hosts.
Education Property Tax
Due to the pandemic, the government had previously frozen property tax revenue at 2019 levels. As Alberta’s economy has begun to recover the requisition is being adjusted upwards by a modest 1.5% in 2022–23.
Other Noteworthy Items
Health Care
Alberta Health’s operating expense budget has been increased by $600 million/year, for a total increase of $1.8 billion by 2024-2025. This includes a $100 million per year allocated to the expansion of Alberta’s health care system capacity, including adding new ICU beds.
Job Growth
An additional $600 million in funding over the next three years is allocated towards Alberta at Work—a new government initiative aimed at helping Albertans gain employment.
$171 million is allocated over the next 3 years to expand enrolment in areas with skills shortages, such as technology, finance, energy, engineering, health, and aviation.
$15 million is allocated over the next three years towards the Investment and Growth Fund aimed at creating a new rural investment attraction stream to encourage more businesses to open in rural communities and help create jobs.
Child Care
Alberta Budget 2022 announced an additional $666 million/year in operating expenses, for a total increase of $2.6 billion dollars by 2024-2025, to support the $10/day child care agreement with the federal government.
Natural Gas Rebate Program
An Energy Affordability Program has been introduced, which runs until March 31, 2023. The rebate is triggered if the company’s regulated rate increase above $6.50 per gigajoule.
Read the full budget here: Alberta Budget 2022
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