Tax Flash Bulletin
2023 Alberta Budget Highlights
On February 28, 2023, Alberta’s Minister of Finance, Travis Toews, tabled the province’s 2023-2024 budget. We have highlighted selected tax measures relevant to individuals and small businesses in Alberta.
INDIVIDUALS
Personal Tax Rates
The budget did not propose any changes to individual income tax rates for 2023 or introduce any new taxes. The provincial government re-started indexation of tax brackets with the 2022 taxation year. Many Albertans will see the benefit of indexation through lower tax withholdings on their first paycheques of 2023. In addition, since indexation will resume for 2022, Albertans will receive larger refunds or owe less tax when they file their 2022 tax returns in spring 2023.
Provincial Income Tax Brackets and Tax Rates
| 2022 Taxable Income | 2023 Taxable Income | Rate |
|---|---|---|
| $0 up to $134,238 | $0 up to $142,292 | 10% |
| $134,238 up to $161,086 | $142,292 to $170,751 | 12% |
| $161,086 up to $214,781 | $170,751 to $227,668 | 13% |
| $214,781 up to $322,171 | $227,668 to $341,502 | 14% |
| Over $322,171 | Over $341,502 | 15% |
Top Combined Alberta and Federal Rates
| Income Type | 2022 | 2023 |
|---|---|---|
| Salary, interest, pension, foreign | 48.00% | 48.00% |
| Eligible dividends | 34.31% | 34.31% |
| Non-eligible dividends | 42.31% | 42.31% |
| Capital gains | 24.00% | 24.00% |
Top tax rates apply to taxable income over $341,502 and $322,171 (2022) based on known federal and Alberta rates at February 28, 2023.
Increase to Charitable Donation Tax Credit
- Increase to the tax credit rate from 10 per cent to 60 per cent on the first $200 of charitable donations
- Effective starting with the 2023 taxation year
Increase to Adoption Expenses Tax Credit
- The non-refundable tax credit is 10 per cent of eligible adoption expenses up to an annual maximum.
- The maximum will be increased from $13,552 for 2022 to $18,210 for 2023
- The maximum amount will be indexed annually
Consumer and Other Taxes
- Fuel tax collection will be determined quarterly based on average oil prices and the rates will be reduced as the average WTI price rises
- Education property tax requisition will be frozen at the 2022-23 level for 2023-24, and rates will decrease in 2023
- Residential/farmland rate will decline from $2.65 to $2.56 per $1,000
- Non-residential rate will decline from $3.90 to $3.76 per $1,000
BUSINESSES
The budget did not propose any changes to corporate income tax rates and it did not change the $500,000 provincial small business income threshold. The rates below reflect a December 31st year-end.
| Income Type | Alberta Rate | Federal Rate | Combined Rates Calendar 2023 |
|---|---|---|---|
| General corporate income | 8.00% | 15.00% | 23.00% |
| Small business income | 2.00% | 9.00% | 11.00% |
| CCPC* investment income | 8.00% | 38.67% | 46.67% |
| Non-CCPC investment income | 8.00% | 15.00% | 23.00% |
| Manufacturing and processing income |
8.00% | 15.00% |
23.00% |
*Canadian-controlled private corporation
Based on known provincial and federal rates at February 28, 2023
Introduction of Agri-Processing Investment Tax Credit
- The non-refundable tax credit is worth 12 per cent of eligible capital investments of at least $10 million made in the agri-food sector on or after February 7, 2023
- Corporations can carry forward unused credits for 10 years.
- Applications will be accepted starting in spring 2023
Refer to the 2023 Alberta Budget for further details.
This has been prepared by the Professional Wealth Advisory Group of Raymond James Ltd., (RJL). Statistics and factual data and other information are from sources RJL believes to be reliable but their accuracy cannot be guaranteed. It is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities nor is it meant to replace legal, accounting, taxation or other professional advice. We are not tax advisors and we recommend that clients seek independent advice from a professional advisor on tax-related matters. The information is furnished on the basis and understanding that RJL is to be under no liability whatsoever in respect thereof. This is intended for distribution only in those jurisdictions where RJL and the author are registered. Securities-related products and services are offered through Raymond James Ltd., Member - Canadian Investor Protection Fund. Insurance products and services are offered through Raymond James Financial Planning Ltd., which is not a Member - Canadian Investor Protection Fund.