Canada: 2016 Alberta Budget Summary

On April 14, 2016, Alberta Finance Minister Joe Ceci tabled the province's second budget since the NDP won the provincial election on May 5, 2015.

The effect of lower oil prices continues to exert a significant impact on Alberta's economy. In October, Alberta had assumed a $5.4 billion deficit for fiscal 2016–17, but that forecast came with an expected West Texas intermediate oil price of US$61 a barrel. However, with even lower oil prices, Alberta's deficit is now forecast at $10.4 billion for fiscal 2016–17, which includes a $700 million risk adjustment. Deficits of $10.1 billion and $8.4 billion are forecast for 2017–18 and 2018–19 respectively.

The budget does not focus on major spending cutbacks, but is taking a number of measures to reduce government costs. Salaries for political staff and government managers will be frozen and a number of agencies will be amalgamated or dissolved.

A number of measures are targeted at job creation, business investment, economic growth and diversification by investing significantly in Alberta's infrastructure through the five-year Capital Plan. The Capital Plan will support $34.8 billion in infrastructure projects over five years, with $2.2 billion for green infrastructure under the Climate Leadership Plan.

Excluding previously announced measures, there are no new income tax increases in the 2016 budget. The following is a summary of the tax measures that were included in the budget.

Business tax measures

Corporate tax rates

No changes have been made to the general tax rate or to the $500,000 small business limit. However, the small business corporate income tax rate will be reduced from 3% to 2% effective January 1, 2017.

Alberta's corporate tax rates for 2016 and 2017 are summarized in Table A below:

Table A

Alberta corporate tax rates

Year Small business tax rate General corporate tax rate Manufacturing and processing tax rate
2016 3% 12% 12%
2017 2% 12% 12%

New capital investment tax credit

The new capital investment tax credit will benefit corporations that make investments in eligible capital assets (first time acquisition of new and used property in value-added agriculture, manufacturing and processing, tourism infrastructure and culture industries). The government will announce further details on this credit later this year.

Personal tax measures

Personal income tax rates

Commencing with the 2016 taxation year, Alberta's new system of progressive personal income taxes is fully phased in, affecting taxpayers earning more than $125,000 a year. The new income tax brackets will be indexed starting in 2017. No additional tax rate increases were announced in the budget.

Table B illustrates the provincial rates for 2016. Table C illustrates the top combined federal and provincial marginal rate of tax on various types of income.

Table B

Taxable income 2016
$0 to $125,000 10%
$125,001 to $150,000 12%
$150,001 to $200,000 13%
$200,001 to $300,000 14%
>$300,000 15%

Table C

Taxable income Over $200,000 – $300,000 Over $300,000
Interest 47.0% 48.0%
Capital gains 23.5% 24.0%
Eligible dividends 30.33% 31.71%
Regular dividends 39.07% 40.24%

Dividend tax credit

The dividend tax credit rate for dividends paid out of income taxed at the small business rate (other than eligible dividends) will be adjusted downwards as a result of lowering the small business rate to 2%, effective January 1, 2017.

Alberta family employment tax credit

As announced as part of the October 2015 provincial budget, enhancements to this refundable credit will be effective July 1, 2016. The rate at which benefits are phased in will be increased from 8% to 11% on working income over $2,760 and the phase-out threshold will be increased from a family net income of $36,778 to $41,250 (at a rate of 4% of family net income greater than $41,250). For the 2016 benefit year starting on July 1, payments will increase to a maximum of $763 for one child, $1,457 for two children, $1,873 for three children and $2,012 for four or more children.

Alberta child benefit

Also previously announced, the Alberta Child Benefit (ACB) is a new refundable tax credit applicable to working families earning up to $41,220 per year, effective July 1, 2016. Families with net income of up to $25,500 will receive the maximum benefit. Benefit amounts will then be reduced, and phased out completely once family net income reaches $41,220 per year. Effective July 1, 2016, families with one child will be eligible for a maximum annual benefit of $1,100. An additional annual benefit of $550 will be provided for each of the next three children. Therefore, families with four or more children will be eligible to receive a maximum annual benefit of $2,750. The first ACB payment will be made in August, and families currently eligible for the Alberta family employment tax credit will automatically be enrolled for this new credit. Otherwise, an Alberta income tax return will have to be filed in order to be eligible.

New Alberta investor tax credit

The new Alberta investor tax credit will benefit investors who invest in eligible small and medium‑sized enterprises in Alberta. The government will announce further details on this credit later this year.

Other measures

Carbon levy

The budget provides additional information on the government's Climate Leadership Plan. As part of this plan, a price on carbon will be implemented through a carbon levy on purchases of transportation and heating fuels.

The carbon levy will be included in the price of transportation and heating fuels based on the level of greenhouse gas emissions released when the fuels are combusted—$20 per tonne in 2017, and $30 per tonne in 2018. Some fuels and fuel uses will be exempt, such as fuel used on farms and reserves. The carbon levy will be implemented on January 1, 2017.

To help those most impacted by the carbon levy, the government will implement a non-taxable rebate for lower and middle income Albertans. The rebate will begin in January 2017 and will provide up to $200 for an adult, $100 for a spouse and $30 for each child under 18 in the household (to a maximum of four). In 2018, when the carbon price rises to $30 per tonne, rebate amounts will be adjusted accordingly, rising to $300 for an adult, $150 for a spouse and $45 for each child. Single parents will receive the spousal amount for one child and the child amount for up to four additional children. The rebate will begin to phase out at $47,500 in net family income for singles and $95,000 for couples and families.

Legislation enacting the carbon levy will be introduced this spring. Regulations, with further details about exemptions and the process for remitting the levy, will be introduced later this year.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Crowe MacKay LLP
Crowe MacKay LLP
Minden Gross LLP
Grant Thornton
Minden Gross LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Crowe MacKay LLP
Crowe MacKay LLP
Minden Gross LLP
Grant Thornton
Minden Gross LLP
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions