Executive summary
On 24 February 2022, Alberta Finance Minister Travis Toews tabled the province’s fiscal 2022/23 budget. The budget contains no new taxes and no income tax increases.
The Minister anticipates a surplus of $0.5b1 for 2022/23 and projects further surpluses of $0.9b for 2023/24 and $0.7b for 2024/25.
The following is a brief summary of the key tax measures.
Detailed discussion
Business tax measures
Corporate income tax rates
No changes are proposed to the corporate income tax rates or the $500,000 small-business limit.
Alberta’s 2022 corporate income tax rates are summarized in Table A.
Table A – 2022 Alberta corporate tax rates
| 2022 | ||
| Alberta |
Federal and Alberta combined |
|
| Small-business tax rate* ** |
2% | 11% |
| General corporate tax rate* ** | 8% | 23% |
* Rates represent calendar-year rates unless otherwise indicated.
** The 2021 federal budget proposed to temporarily reduce the federal corporate income tax rate for qualifying zero-emission technology manufacturers by 50% (i.e., to 7.5% for eligible income otherwise subject to the 15% general corporate income tax rate or 4.5% for eligible income otherwise subject to the 9% small-business corporate income tax rate), applicable for taxation years beginning after 2021. The reduced tax rates are proposed to be gradually phased out for taxation years beginning in 2029 and fully phased out for taxation years beginning after 2031.
Personal tax
Personal income tax rates
The budget does not include any changes to personal income tax rates.
The 2022 Alberta personal tax rates are summarized in Table B.
Table B – 2022 Alberta personal tax rates
| First bracket rate |
Second bracket rate |
Third bracket rate |
Fourth bracket rate |
Fifth bracket rate |
| $0 to $131,220 | $131,221 to $157,464 | $157,465 to $209,952 | $209,953 to $314,928 | Above $314,928 |
| 10% | 12% | 13% | 14% | 15% |
For taxable income in excess of $209,952, the 2022 combined federal-Alberta personal income tax rates are outlined in Table C.
Table C – Combined 2022 federal and Alberta personal tax rates
| Bracket | Ordinary income* | Eligible dividends | Non-eligible dividends |
| $209,953 to $221,708** | 43.38% | 27.93% | 36.99% |
| $221,709 to $314,928 | 47% | 32.93% | 41.15% |
| Above $314,928 | 48% | 34.31% | 42.30% |
*The rate on capital gains is one-half the ordinary income tax rate.
**The federal basic personal amount comprises two elements: the base amount ($12,719 for 2022) and an additional amount ($1,679 for 2022). The additional amount is reduced for individuals with net income in excess of $155,625 and is fully eliminated for individuals with net income in excess of $221,708. Consequently, the additional amount is clawed back on net income in excess of $155,625 until the additional tax credit of $252 is eliminated; this results in additional federal income tax (e.g., 0.38% on ordinary income) on net income between $155,626 and $221,708.
Personal tax credits
This budget proposes no changes to personal tax credits or amounts.
Other tax measures
Education property tax
Due to the pandemic, the government had previously frozen property tax revenue at 2019 levels. Now that Alberta’s economy is beginning to recover, but in recognition that the province and households are still recovering, the requisition will be adjusted upwards by a modest 1.5% in 2022/23.
Tourism levy
The previously announced tourism levy applies to all short-term rentals offered through online marketplaces. To collect the tax more efficiently and consistently, amendments will be brought forward in 2022 to require online marketplaces to collect and remit the tourism levy on behalf of their Alberta short-term rental hosts.
Tobacco tax
Effective 1 March 2022, the tax rate on smokeless tobacco products will be reduced from 41.25 cents per gram to 27.5 cents per gram.
For additional information with respect to this Alert, please contact the following:
Ernst & Young LLP (Canada), Calgary
- Greg Boone
- Dean Radomsky
- Sanjaya Ranasinghe
Ernst & Young LLP (Canada), Edmonton
- Dustin Burbank
- Hayat Kirameddine
For a full listing of contacts and email addresses, please click on the Tax News Update: Global Edition (GTNU) version of this Alert.
