Connect with us
[the_ad id="89560"]

Alberta

Alberta government should create flat 8% personal and business income tax rate in Alberta

Published

1 year ago

4 minute read

From the Fraser Institute

By Tegan Hill

If the Smith government reversed the 2015 personal income tax rate increases and instituted a flat 8 per cent tax rate, it would help restore Alberta’s position as one of the lowest tax jurisdictions in North America

Over the past decade, Alberta has gone from one of the most competitive tax jurisdictions in North America to one of the least competitive. And while the Smith government has promised to create a new 8 per cent tax bracket on personal income below $60,000, it simply isn’t enough to restore Alberta’s tax competitiveness. Instead, the government should institute a flat 8 per cent personal and business income tax rate.

Back in 2014, Alberta had a single 10 per cent personal and business income tax rate. As a result, it had the lowest top combined (federal and provincial/state) personal income tax rate and business income tax rate in North America. This was a powerful advantage that made Alberta an attractive place to start a business, work and invest.

In 2015, however, the provincial NDP government replaced the single personal income tax rate of 10 percent with a five-bracket system including a top rate of 15 per cent, so today Alberta has the 10th-highest personal income tax rate in North America. The government also increased Alberta’s 10 per cent business income tax rate to 12 per cent (although in 2019 the Kenney government began reducing the rate to today’s 8 per cent).

If the Smith government reversed the 2015 personal income tax rate increases and instituted a flat 8 per cent tax rate, it would help restore Alberta’s position as one of the lowest tax jurisdictions in North America, all while saving Alberta taxpayers $1,573 (on average) annually.

And a truly integrated flat tax system would not only apply a uniform tax 8 per cent rate to all sources of income (including personal and business), it would eliminate tax credits, deductions and exemptions, which reduce the cost of investments in certain areas, increasing the relative cost of investment in others. As a result, resources may go to areas where they are not most productive, leading to a less efficient allocation of resources than if these tax incentives did not exist.

Put differently, tax incentives can artificially change the relative attractiveness of goods and services leading to sub-optimal allocation. A flat tax system would not only improve tax efficiency by reducing these tax-based economic distortions, it would also reduce administration costs (expenses incurred by governments due to tax collection and enforcement regulations) and compliance costs (expenses incurred by individuals and businesses to comply with tax regulations).

Finally, a flat tax system would also help avoid negative incentives that come with a progressive marginal tax system. Currently, Albertans are taxed at higher rates as their income increases, which can discourage additional work, savings and investment. A flat tax system would maintain “progressivity” as the proportion of taxes paid would still increase with income, but minimize the disincentive to work more and earn more (increasing savings and investment) because Albertans would face the same tax rate regardless of how their income increases. In sum, flat tax systems encourage stronger economic growth, higher tax revenues and a more robust economy.

To stimulate strong economic growth and leave more money in the pockets of Albertans, the Smith government should go beyond its current commitment to create a new tax bracket on income under $60,000 and institute a flat 8 per cent personal and business income tax rate.

Author:

Tegan Hill
Associate Director, Alberta Policy, Fraser Institute
Related Topics:

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

More from this author
Alberta / 8 hours ago

Hours after Liberal election win, Alberta Prosperity Project drumming up interest in referendum

2025 Federal Election / 9 hours ago

Post election…the chips fell where they fell

Banks / 9 hours ago

TD Bank Account Closures Expose Chinese Hybrid Warfare Threat

Alberta

Hours after Liberal election win, Alberta Prosperity Project drumming up interest in referendum

Published on April 29, 2025

By

News release from the Alberta Prosperity Project

Carney’s In. Now what?

You’ve been paying attention. You understand this is really bad. Worse than that, it’s dangerous. The country has somehow chosen several more years of a decade-long Trudeau Travesty…on steroids. Because this new Prime Minister has a three digit IQ, deep and questionable connections and a momentum to accelerate the further dis-integration of a nation we all once proudly belonged to. It’s untrue to say the country is dying. But it’s also not a stretch to say it’s on life support.

The era of Carney Carnage is here. While every province will experience it, there’s no secret he’s placed an extra big bulls-eye on Alberta.

It’s not personal, it’s financial.

His plan includes continuing to limit three of Alberta’s most prosperous sectors: energy, agriculture and, by extension, innovation. To acknowledge this requires we abandon our sense of romanticized national nostalgia. Nostalgia is a trap that prevents us from assessing the reality we exist in.

For instance, GDP is considered the financial heartbeat of a country. Over the past decade of Liberal Leadership, the national GDP has been an abysmal 1.1%. By relatable comparison, Mexico was 4%, the UK was 6%, Australia had 8% growth and the US was a whopping 19%.

That’s great information for an economist, but what does it mean to your pay cheque?

The everyday impact on the average Albertan —say, a teacher or mechanic— of 10 long years of 1% GDP means rent’s up at least 25%, a trip to the grocery store always stings, and driving an older car is the norm because an upgrade is out of reach. Does this sound like your reality?

We aren’t starving, but we’re not thriving, either.

Does this make sense for 4.5 million people living with the third most abundant energy deposits in the world? There’s an absurdity to the situation Albertans find themselves in. It’s akin to being chronically dehydrated while having a fresh water spring in the backyard.

The life you’ve invested for, the future you believed was ahead, isn’t happening.

If Alberta stays on this path.

So what can you, as an Albertan, do about it?

This Fall, we’ll be provided an opportunity. A life raft in the form of a referendum. It requires curiosity, imagination and courage to step into it, but the option will be there — a once in a lifetime shot at prosperity for you and your family: Alberta Sovereignty.

A successful bid means Albertans can finally paddle out of the perilous economic current that’s battered us for ten long years.

Alberta has the resources, talent and spirit of collaboration to create a prosperous future for our families and communities.
If you want your vote to finally mean something, if you feel you deserve more from your pay-cheque, grocery store visits and  need greater control over your family’s future, register your intent to sign YES to sovereignty now.

UPCOMING EVENTS: 

Click here to see all upcoming APP events.

WHAT CAN ALBERTANS DO?

Register Your Intent To Vote “YES”
Continue Reading

Alberta

New Alberta Election Act bans electronic vote counting machines, lowers threshold for recalls and petitions

Published on April 29, 2025

By

Alberta’s government is introducing changes to protect democracy, deliver fair and open elections and increase confidence in every vote cast.

Voting gives Albertans a voice in shaping the future of our province. Direct democracy processes like referendums, recall and citizen initiative petitions provide further opportunities for Albertans to be heard and express their views. The proposed Election Statutes Amendment Act, 2025, would make Alberta’s elections and other democratic processes more open, secure and accessible.

“I believe that democracy thrives when people trust the process. These changes would make elections at every level in Alberta more accessible and transparent while protecting their integrity, ensuring confidence in the outcomes. We are also creating more opportunities for Albertans to be involved in direct democracy and to have their say on issues that matter to them.”

Danielle Smith, Premier

Fair and free elections are the foundation of democracy, and Alberta’s government is taking action to protect them. The proposed changes include:

  • Banning the use of electronic tabulators and other automated voting machines, requiring all ballots to be counted by hand to protect election integrity.
  • Eliminating vouching at voting stations to strengthen identification and verification processes.
  • Requiring unofficial vote counts to be completed within 12 hours of polls closing to provide timely, reliable results.
  • Voters being required to cast their ballot in their constituency of residence or by requesting a special ballot.
  • Expanding access to special ballots, allowing any voter to request one without needing to provide a reason while protecting integrity by requiring voters to personally request their special ballot (with exceptions for those needing assistance due to a disability).
  • Updating the Recall Act to make it easier for Albertans to hold elected officials accountable by lowering the signature threshold and extending the timeframe to collect signatures.
  • Improving the Citizen Initiative Act process by setting the threshold for all successful petitions at 10 per cent of eligible voters who participated in the last general election.

“Albertans rightly expect their government to make sure democratic processes are fair and transparent with accurate and timely results. These proposed amendments would deliver on my mandate to review and make changes to strengthen public trust in the integrity of our elections.”

Mickey Amery, Minister of Justice and Attorney General

Additional amendments under the Election Statutes Amendment Act, 2025 would:

  • Allow corporate and union contributions for provincial elections while maintaining transparency and accountability through existing financial disclosure requirements.
  • Improve access to voting for First Nations and Métis Settlements during referendums and Senate elections.
  • Enhance emergency response provisions for voting disruptions during referendums and Senate elections.

These changes would help ensure that Alberta’s democratic processes are open, secure, and reflective of the will of Albertans, while creating new opportunities for greater public participation.

Quick facts

  • The Election Act governs the process for provincial elections, by-elections and plebiscites in Alberta and creates the office of the chief electoral officer, the head of Elections Alberta.
  • The Election Finances and Contributions Disclosure Act governs the financing of provincial elections, Senate elections and referendums, including rules for registered political parties, constituency associations, candidates, leadership contestants and third parties.
  • The Alberta Senate Election Act governs the process for Senate elections in Alberta.
  • The Referendum Act governs the process for referendums in Alberta.
  • The Recall Act outlines the process for Albertans to initiate the recall of an elected MLA.
  • The Citizen Initiative Act allows eligible voters in Alberta to propose legislative or policy initiatives, constitutional referendum questions and establishes rules for advertising and spending.
Continue Reading

Trending

X