On February 27, 2025, Alberta Minister of Finance Nate Horner announced the 2025 Alberta Budget. The Budget aims to strengthen health care, education and communities, support vulnerable Albertans, and diversify the economy. No changes were made to the existing provincial corporate tax rates.
Crowe MacKay’s tax experts summarize the Alberta Budget’s new tax measures below. If you have any questions, connect with us in Alberta, British Columbia, Northwest Territories, or the Yukon.
Personal Tax Measures
New Eight per cent Personal Income Tax Bracket
First mentioned at the 2024 Budget, the government is introducing a new personal income tax bracket of eight per cent on the first $60,000 of income, effective January 1, 2025. This measure is being introduced ahead of schedule (it was supposed to be effective for 2026). The tax bracket will be adjusted by the Alberta escalator starting in 2026.
The new tax bracket should save individuals up to $750 in 2025.
Supplemental Credit
A new non-refundable tax credit will be implemented for the 2025 taxation year equal to two per cent of the total amount of certain non-refundable tax credits claimed by an individual that exceeds $60,000. This credit will be adjusted by the Alberta escalator starting in 2026.
Other Tax Measures
Contraband Tobacco
To combat the adverse effects of contraband tobacco in the province, the government announced that it will implement four measures to address this issue:
- Double the number of officers in Alberta Gaming, Liquor, and Cannabis’s Tobacco Enforcement Unit.
- Introduce two new administrative penalties to increase the financial consequences of participating in contraband activities. The penalties will be set at three times the tax otherwise payable and will apply to the possession or sale of contraband cigarettes, tobacco sticks and fine-cut tobacco, or the unauthorized possession of cigars that in total contain more than 1,000 grams of tobacco.
- Introduce legislation to mandate the reporting of contraband seizures to ensure consistent data collection and enforcement of penalties.
- Advocate for the federal government to fulfill its responsibility to address the contraband tobacco issue.
Education Property Tax
Education property tax rates will increase in 2025-26 after being frozen in 2024-25. The rates will increase from $2.56 to $2.72 / $1,000 for residential / farmland property and from $3.76 to $4.00 / $1,000 for non-residential property.
Locomotive Fuel Tax
The fuel tax rate that applies to locomotive fuel will increase from 5.5 to 6.5 cents per litre effective March 1, 2025.
Cancelled Tax Credit Programs
The Budget will end the entitlements under the Alberta Climate Leadership Adjustment Rebate and the Alberta Family Employment Tax Credit after December 31, 2025. These two programs were eliminated in 2019 and 2020 respectively. Albertans who may still be entitled to amounts under either program should contact Canada Revenue Agency as soon as possible.
Measures from previous Budget
Several measures from the 2024 Budget such as the $200 tax on electric vehicles and the increase in the Land Title Registration Levy were mentioned in the 2025 Budget and are expected to increase the province’s tax revenue.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
https://www.mondaq.com/canada/property-taxes/1592518/2025-alberta-budget-summary?email_access=on
