Alberta government can deliver tax cut by ending corporate welfare

In a recent CBC interview, Premier Danielle Smith said she would “love to be able to accelerate our tax cut,” referring to her campaign promise to create a new 8 per cent tax bracket for personal income below $60,000, before adding that her government might not be able to maintain a balanced budget and introduce the cut. Fortunately, there’s a way Smith could achieve both: eliminate corporate welfare.

First, some background on Alberta’s recent tax changes.

In 2015, the provincial NDP government replaced Alberta’s single personal income tax rate of 10 per cent with a five-bracket system including a bottom rate of 10 per cent and a top rate of 15 per cent. Due to this change (and tax changes at the federal level, which increased the top federal income tax rate from 29 per cent to 33 per cent), Albertans faced significantly higher personal income tax rates.

Smith’s proposed tax cut would reduce Alberta’s bottom rate from 10 per cent to 8 per cent and is expected to save Albertans earning $60,000 or more $760 annually. While this change would fail to restore Alberta’s previous tax advantage, it would be a step in the right direction.

But due to fear of incurring a budget deficit, Smith has delayed fully implementing the $1.4 billion tax cut until 2027, contingent on the government being able to maintain a balanced budget.

Which takes us back to corporate welfare.

In 2019, after adjusting for inflation, the Alberta government spent $2.4 billion on subsidies to select businesses and industries. (In 2021, the latest year of available data, it spent $3.3 billion, however the pandemic may have contributed to this number.) And that’s not counting other forms of government handouts such as loan guarantees, direct investment and regulatory privileges for particular firms or industries. Put simply, eliminating corporate welfare would be more than enough to offset Smith’s proposed tax cut, which she promised Albertans in 2023.

Moreover, a significant body of research shows that corporate welfare fails to generate widespread economic benefits. Think of it this way; if businesses that receive subsidies were viable without subsidies, they wouldn’t need government handouts. Moreover, the government must impose higher tax rates on everyone else to pay for these subsidies. Higher taxes discourage productive activity, including business investment, which fuels economic growth. And the higher the rates, the more economic activity they discourage. Put simply, subsidies depress economic activity in some parts of an economy to encourage it in others.

For the same reason, corporate welfare also typically fails to generate new jobs on net. Indeed, while subsidies may create jobs in one specific industry, they pull those jobs away from other sectors that are likely more productive because they don’t need the subsidy.

The Smith government is hesitant to introduce Alberta’s tax cut if it can’t maintain a balanced budget, but if the government eliminates corporate welfare, it can avoid red ink while also fulfilling a promise it made to Alberta workers.

Tegan Hill

Director, Alberta Policy, Fraser Institute

Related Topics:#AlbertaBudget #AlbertaCorporateWelfare #FraserInstitute #TeganHill AlbertaBudgetPriorities AlbertaTaxCut AlbertaTaxRate

Up Next

Facebook’s New Free Speech Policy Shows Business Getting Back to Business

Don't Miss

Feds move target for net-zero grid back 15 years. Western provinces say it’s not of their business

Todayville

Todayville is a digital media and technology company. We profile unique stories and events in our community. Register and promote your community event for free.

Follow Author

Conservative MPs denounce Liberal plan to strip charitable status of pro-life, Christian groups

International / 8 hours ago

Trump sues New York Times for $15 billion over ‘malicious, defamatory’ election coverage

Christopher Rufo / 8 hours ago

Charlie Kirk Did It All the Right Way

Alberta

Education negotiations update: Minister Horner

Published on September 18, 2025

Government of Alberta

President of Treasury Board and Minister of Finance Nate Horner issued the following statement about the ongoing negotiations with TEBA and the ATA:

“I am pleased to share that TEBA and the ATA met in an Alberta Labour Relations Board (LRB) resolution conference today to discuss the unfair labour practice complaint launched against the ATA, by TEBA.

“As a result of the resolution conference, the LRB issued a consent order, which is an agreement by the parties to resolve the complaint.

“The consent order clarifies that there are only three outstanding bargaining issues. They are:

The timing for implementation of the unified grid;
The ATA’s proposal for an annual 1.5% long service allowance for teachers at the maximum step of the grid; and,
Coverage of the COVID-19 vaccination.

“This consent order makes clear that none of the outstanding items under negotiation are about classroom complexity, class size or support for students.

“Alberta’s government has already addressed these concerns though our current offer which would add 3000 more teachers to classrooms. In addition, Budget 2025 invested$1.6 billion to support diverse learning needs and complexity in classrooms. This includes $53 million for classroom complexity grants.

“I trust that this order will assist Alberta’s families and teachers in understanding the true nature of the ongoing negotiations.”

Alberta

Sylvan Lake high school football coach fired for criticizing gender ideology sends legal letter to school board

Published on September 18, 2025

Todayville

From LifeSiteNews

By Anthony Murdoch

The letter on behalf of Alberta high school volunteer football coach Taylor ‘Teej’ Johannesson mentions ‘workplace harassment’ while demanding his job back.

A Sylvan Lake high school football coach who was fired for sharing his views opposing transgender ideology on social media in a video discussing his Christian faith sent a legal demand to his former school board demanding he get his job back.

H.J. Cody High School volunteer coach Taylor “Teej” Johannesson, as reported by LifeSiteNews, earlier this month was fired by his school’s principal because he spoke out against gender-confused youth who “take their hatred of Christians” to another level by committing violent acts against them.

School principal Alex Lambert fired Teej, as he is known, as a result of a TikTok video in which he speaks out against radical gender ideology and the dangers it brings.

In a recent update involving his case, local media with knowledge of Johannesson’s issues with the principal at H.J. Cody High School in Sylvan Lake, Alberta, confirmed a legal demand letter was sent to the school.

The letter reads, “From his perspective, this opposition is consistent with the Alberta government’s position and legislation prohibiting prescribing prescription hormones to minors and providing care to them that involves transition surgeries.”

In the letter, the school board’s “workplace harassment” procedure is mentioned, stating, “Any act of workplace harassment or workplace violence shall be considered unacceptable conduct whether that conduct occurs at work, on Division grounds, or at division-sponsored activities.”

The legal demand letter, which was sent to school officials last week, reads, “Given that Mr. Johannesson’s expression in the TikTok Video was not connected to his volunteer work, the principal and the division have no authority to regulate his speech and punish him by the Termination decision, which is ultra vires (“beyond the powers.)”

Johannesson has said, in speaking with local media, that his being back at work at the school as a volunteer coach has meaning: “It’s about trying to create some change within the school system.”

He noted how, for “too long,” a certain “political view, one ideology, has taken hold in the school system.”

Johannesson has contacted Alberta’s Chief of Staff for the Minister of Education about his firing and was told that there is a board meeting taking place over the demand letter.

According to Teej, Lambert used his TikTok video as an excuse to get rid of someone in the school with conservative political views and who is against her goal to place “safe space stickers” all over the school.

Teej has been in trouble before with the school administration. About three years ago, he was called in to see school officials for posting on Twitter a biological fact that “Boys have a penis. Girls have a vagina.”

Alberta’s Conservative government under Premier Danielle Smith has in place a new policy protecting female athletes from gender-confused men that has taken effect across the province.

As LifeSiteNews previously reported, the Government of Alberta is currently fighting a court order that is blocking the province’s newly passed ban on transgender surgeries and drugs for children.

Alberta also plans to ban books with sexually explicit as well as pornographic material, many of which contain LGBT and even pedophilic content, from all school libraries.