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

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:
Alberta
Alberta Provincial Police – New chief of Independent Agency Police Service

Sat Parhar has been appointed as the first chief of the Independent Agency Police Service, marking the next step toward a new municipal policing option.
The appointment of a new chief for the Independent Agency Police Service (IAPS) marks the next step in giving municipalities a new option for local policing and builds on the work already underway for the agency to assume the police-like duties currently carried out by the Alberta Sheriffs. The IAPS will empower municipalities to adopt strategies that effectively respond to their specific safety concerns, enhancing public safety across the province.
Chief Parhar brings more than 25 years of policing experience, including senior roles with the Calgary Police Service, most recently as deputy chief. His frontline policing experience and deep understanding of Alberta’s complex and diverse public safety landscape positions him to lead the agency as it takes shape and begins its work as a new municipal policing option, keeping communities safe.
Once operational, the agency will strengthen Alberta’s existing policing model and complement the province’s current police services, which includes the RCMP, Indigenous policing services and municipal police. It will help fill gaps and ensure law enforcement resources are deployed efficiently to meet Alberta’s evolving public safety needs and improve law enforcement response times, particularly in rural communities.
“Appointing Chief Sat Parhar is a key milestone in Alberta’s plan to give municipalities a real choice in how their communities are kept safe. This is about building a modern police service that reflects the priorities of Albertans, strengthens local decision-making, and ensures every corner of our province, especially rural areas, can count on responsive, effective law enforcement. With his decades of experience and deep understanding of Alberta’s policing landscape, he is the right leader to bring this vision to life.”
“This appointment signifies a significant step forward in our efforts to establish a more robust, community-focused policing model that is better equipped to meet the unique needs of our local residents. Under Chief Parhar’s visionary leadership, we are confident that we will develop a modern, efficient police service that not only enhances public safety but also aligns closely with the priorities and values of Albertans. His experience and commitment are vital in shaping an IAPS that is responsive, transparent, and dedicated to fostering trust and collaboration within the community, ultimately ensuring a safer and more connected society for all.”
Chief Parhar’s immediate priorities will be to hire an executive team and commence organizational planning such as developing key recruitment, training and other operational policies. Chief Parhar’s appointment is the first step of many to establishing the IAPS.
“It’s an honour to take on this role and help shape a modern police service built for Alberta. My focus from day one will be on setting high standards for professionalism, building strong relationships with our partners and ensuring this service reflects the needs and priorities of the communities we serve.”
The Independent Agency Police Service was formally created through regulation following the passing of Public Safety Statutes Amendment Act, 2024. The agency will operate as an independent Crown corporation, and will be renamed the Alberta Sheriffs Police Service, with its head office located in Calgary. The IAPS will be operationally independent from the provincial government with civilian oversight, consistent with all police services in Alberta.
“When it comes to policing, municipalities like ours deserve a choice – especially when the current system leaves us disadvantaged simply because of our size. We look forward to learning more about what that alternative will look like once an Alberta police agency is fully established and the options are clear. For us, this is about fairness, sustainability, and ensuring municipalities have access to policing solutions that reflect both their needs and their realities.”
Quick facts
- The regulation establishes the IAPS Provincial Corporation and its governance structure including board of directors, board of director powers, financial responsibilities and accountabilities.
Related news
- Expanding municipal police service options (April 7, 2024)
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