(Reg Warkentin – Policy and Advocacy Manager for the Red Deer and District Chamber of Commerce)
By Sheldon Spackman
Officials with the Red Deer and District Chamber of Commerce say “any tax cut is good news” regarding the recently announced cut in the small business tax rate in Alberta. The new tax rate for small businesses in the province dropped from three to two percent on January 1st, the same day the government’s new carbon levy went into effect.
However, Red Deer Chamber Policy and Advocacy Manager Reg Warkentin, says the new tax rate will impact each Alberta small business differently. He says with it coming into effect at the same time as the new carbon levy, a transportation company for example will be impacted more than say a web design company, as the cost of fuel is a major factor. Warkentin says any gains a transportation company might see in the new tax rate reduction could be offset by an increase in costs from the new carbon levy.
Warkentin says the government increased the corporate tax rate in 2015 from 10 to 12 percent, meaning Alberta corporations will pay more in taxes this year than they would have two years ago. He says it’s important to look at what our neighbours and other countries are doing in this respect. Warkentin says “We can’t operate under the assumption that we’re in a vacuum”, adding “Does it cost more or less to do business in Alberta?” He adds “If we want to alleviate cost pressures on small businesses, we have to determine whether a small business tax cut is the best method.”
Regardless, Warkentin says the new small business tax cut brings Alberta in line with Saskatchewan at a two percent tax rate for small businesses. Though he notes Saskatchewan doesn’t have a Carbon Levy like Alberta does now. The rate is also lower than B.C.’s 2.5 percent small business tax rate.
(Photo courtesy of Red Deer and District Chamber of Commerce)