Canada | Alberta budget 2025-26

¹ The rates represent calendar-year-end rates unless otherwise indicated.

² The federal corporate income tax rates for manufacturers of qualifying zero-emission technology are reduced to 7.5% for eligible income otherwise subject to the 15% federal general corporate income tax rate or 4.5% for eligible income otherwise subject to the 9% federal small-business corporate income tax rate. These reductions are not reflected in the combined federal and Alberta rates above.

³ Id.

⁴ An additional tax applies to banks and life insurers at a rate of 1.5% on taxable income (subject to a CA$100m exemption to be shared by group members).

Personal tax

Personal income tax rates

The budget accelerates the implementation of a new 8% personal income tax bracket for income up to CA$60k, effective 1 January 2025.

The 2025 Alberta personal income tax rates are summarized in Table B.

Table B — 2025 Alberta personal income tax rates

For taxable income exceeding CA$241,974, the 2025 combined federal-Alberta personal income tax rates are outlined in Table C.

Table C — Combined 2025 federal and Alberta personal income tax rates

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 (CA$14,538 for 2025) and an additional amount (CA$1,591 for 2025). The additional amount is reduced for individuals with net income exceeding CA$177,882 and is fully eliminated for individuals with net income exceeding CA$253,414. Consequently, the additional amount is clawed back on net income exceeding CA$177,882 until the additional tax credit of CA$239 is eliminated; this results in additional federal income tax (e.g., 0.32% on ordinary income) on net income between CA$177,883 and CA$253,414.

Personal tax credits

This budget proposes the following new personal credit:

Supplemental credit — This new tax credit will be equal to 2% of the total amount of certain non-refundable tax credits claimed by an individual that exceed CA$60k. The nonrefundable tax credit will be implemented for the 2025 taxation year and ensures that individuals who claim more than CA$60k in nonrefundable tax credits do not pay more taxes due to the implementation of the new tax bracket. The tax credit will be adjusted by the Alberta escalator beginning in 2026.

Other tax measures

Education property tax

After education property taxes were frozen in 2024-25, education property tax rates will increase in 2025-26 from CA$2.56 to CA$2.72/CA$1,000 of equalized assessment for residential/farmland properties and from CA$3.76 to CA$4.00 per CA$1,000 of equalized assessment for non-residential properties.

Locomotive fuel tax

Effective 1 March 2025, the budget increases the fuel tax rate that applies to locomotive fuel from 5.5 cents to 6.5 cents per liter.

Winding down of certain canceled tax credit programs

The Alberta Climate Leadership Adjustment Rebate and the Alberta Family Employment Tax Credit were eliminated in 2019 and 2020, respectively, but continue to be administered to accommodate late-filed tax returns and reassessments. The budget eliminates entitlements under these two canceled programs after 31 December 2025.

For up-to-date information on the federal, provincial and territorial budgets, visit ey.com/ca/Budget

For additional information concerning this Alert, please contact:

Ernst & Young LLP (Canada), Calgary

• Greg Boone
• Dean Radomsky 
• Sanjaya Ranasinghe 

Ernst & Young LLP (Canada), Edmonton

• Dustin Burbank
• Hayat Kirameddine

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor

For a full listing of contacts and email addresses, please click on the Tax News Update: Global Edition (GTNU) version of this Alert.