1 The rate on capital gains is one-half the ordinary income tax rate.
2 The federal basic personal amount comprises two elements: the base amount ($13,521 for 2023) and an additional amount ($1,479 for 2023). The additional amount is reduced for individuals with net income in excess of $165,430 and is fully eliminated for individuals with net income in excess of $235,675. Consequently, the additional amount is clawed back on net income in excess of $165,430 until the additional tax credit of $222 is eliminated; this results in additional federal income tax (e.g., 0.32% on ordinary income) on net income between $165,431 and $235,675.
Personal tax credits
This budget proposes changes to the following personal credits/amounts:
- Charitable donations tax credit – The charitable donations tax credit rate on the first $200 of contributions will be increased from 10% to 60% effective in 2023.
- Adoption expenses tax credit – A 10% non-refundable tax credit is available for certain agency, legal and administrative fees and travel-related costs incurred as part of the adoption process. The maximum allowable expenses for the credit are increased to $18,210 for 2023 to match the federal amount. The maximum amount will be indexed annually thereafter.
Other personal tax measures include the following:
- The Alberta government previously resumed the indexation of the personal income tax system, effective 1 January 2022. Personal income tax credit amounts and tax bracket thresholds are higher, by 2.3% in 2022 and 6% in 2023.
Other tax measures
Fuel tax
- The Alberta government has paused the collection of fuel taxes on gasoline and diesel until 30 June 2023. In July 2023, fuel tax rates for gasoline and diesel will once again be determined quarterly based on average oil prices.
Education property tax
- To improve affordability in recent years, the government has limited the increase in the total education property tax requisition. The total requisition was frozen for 2020–21 and 2021–22 and increased by only 1.5% in 2022–23. As costs continue to increase due to high inflation, the government will freeze the education property tax requisition at the 2022–23 level of $2.5 billion for 2023–24.
Learn more
For more information, please contact your EY or EY Law advisor or one of the following professionals:
Calgary
Greg Boone
+1 403 206 5306 | greg.boone@ca.ey.com
Dean Radomsky
+1 403 206 5180 | dean.w.radomsky@ca.ey.com
Sanjaya Ranasinghe
+1 780 441 4692 | sanjaya.ranasinghe@ca.ey.com
Edmonton
Dustin Burbank
+1 780 441 4673 | dustin.burbank@ca.ey.com
Hayat Kirameddine
+1 780 412 2383 | hayat.kirameddine@ca.ey.com