2023 Alberta budget tax highlights

On Feb. 28, the Alberta government released its 2023 budget. The following are highlights of the key tax measures.

Personal tax measures

No personal income tax rate changes were announced in this year’s budget. The current personal combined income tax rates for 2023 are outlined below:

Indexation of personal income tax rates and credits

Indexation of the personal income tax system was resumed Jan. 1, 2022, and the personal income tax credit amounts and tax bracket thresholds are higher in 2023 by 6.0 per cent (2.3 per cent for 2022) over their 2021 value.

Charitable donations tax credit

Coming into effect in 2023, the charitable donations tax credit rate on the first $200 of donations will increase from 10 per cent to 60 per cent.

Adoption expenses tax credit

For 2023, the maximum allowable expenses for the credit will be increased to $18,210. The tax credit provides a non-refundable tax credit equal to 10 per cent of eligible adoption expenses up to an annual maximum. After 2023, this amount will be indexed annually at the same rate as the rest of the personal income tax system.

Corporate tax measures

No corporate income tax rate changes were announced in this year’s budget. The current corporate income tax rates for 2023 are outlined below:

Agri-processing Investment Tax Credit

A new 12 per cent non-refundable tax credit on eligible capital investments of at least $10 million made on or after Feb. 7, 2023 is available. The new incentive program will offset corporate income taxes payable in Alberta, meaning corporations will only benefit from the credit once their facility is operational and the corporation is profitable. Corporations will be able to carry forward unused credits for 10 years. Applications will be accepted starting in spring 2023. More information on eligible expenditures and how to apply will be made available once program regulations are brought forward.

Other tax measures

Fuel tax relief

Until June 30, 2023, the 13 cents per litre provincial fuel tax on gasoline and the four cents per litre tax on diesel will not be collected. In July 2023, fuel tax rates for gasoline and diesel will once again be determined quarterly based on average oil prices.

Education property tax

The budget decreases the mill rates used to calculate the education property tax as follows:

• Residential/farmland – $2.56 (from $2.65) per $1,000 of equalized assessment
• Non-residential – $3.76 (from $3.90) per $1,000 of equalized assessment

Next steps

Contact your Baker Tilly advisor to learn more about how we can help you navigate the complexities of the Canadian tax system.