On Feb. 27, the Alberta government released its 2025 budget. The following are highlights of the key tax measures.
Personal tax measures
The Alberta government introduced the previously announced new personal income tax bracket of eight per cent on the first $60,000 of income. Maximum taxpayer savings are estimated to be $750 once the tax cut is fully implemented.
The current personal combined income tax rates for 2025 are outlined below:
Personal (combined) federal and Alberta top marginal tax rates | |
| Rate | |
| Interest/regular income | 48.0% |
| Capital gains | 24.0% |
| Eligible dividends | 34.31% |
| Non‑eligible dividends | 42.31% |
Corporate tax measures
No corporate income tax rate changes were announced in this year’s budget. The current corporate income tax rates for 2024 are outlined below:
Small business corporations | General corporations | |||
| Rate | Threshold | Non‑M&P | M&P | |
| Alberta | 2.0% | $500,000 | 8.0% | 8.0% |
| Combined federal and AB | 11.0% | $500,000 | 23.0% | 23.0% |
Other tax measures
Education property tax
After being frozen in 2024‑25, education property tax rates will increase in 2025‑26 from $2.56 to $2.72 per $1,000 of equalized assessment for residential/farmland properties and from $3.76 to $4.00 per $1,000 of equalized assessment for non‑residential properties.
Locomotive fuel tax
Alberta will increase the fuel tax rate that applies to locomotive fuel from 5.5 to 6.5 cents per litre effective March 1, 2025.
Winding down cancelled tax credit programs
The Alberta Climate Leadership Adjustment Rebate and the Alberta Family Employment Tax Credit were eliminated in 2019 and 2020 respectively. These programs continue to be administered to accommodate late‑filed tax returns and reassessments. Entitlements under these two cancelled programs will end on Dec. 31, 2025.
Next steps
Contact your Baker Tilly advisor to learn more about how we can help you navigate the complexities of the Canadian tax system.
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