ALBERTA BUDGET HIGHLIGHTS

Transcription

1 Alberta Budget Announcement

2 ALBERTA BUDGET HIGHLIGHTS Alberta Finance Minister Robin Campbell tabled a $248 million surplus budget for fiscal on March 26, While the budget has little direct impact on corporations, it does contain several tax measures which will significantly impact individuals, such as a distinctive new health care levy and considerable changes to personal income tax. HIGHLIGHTS: Fuel Tax Premiums Fuel tax increases will affect Albertans across the board, adding to the cost of living and the cost of doing business in Alberta. Eligible users of marked fuel are also subject to these new taxes as the existing exemptions under the Tax Exempt Fuel User (TEFU) and the Alberta Farm Fuel Benefit (AFFB) are not being increased to offset these new costs. Fuel increases include: A fuel tax increase of 4 cents per litre of gasoline and diesel A fuel tax increase of 2.9 cents per litre of propane Personal Tax Rates Income Tax Brackets Alberta s infamous flat income tax rate of 10% will be changing after January 1, 2016 for personal income tax rates. The 2015 Budget introduces two new personal tax brackets: taxable income over $100,000 and over $250,000. Those earning more than $250,000 a year will be taxed at 11%. For the next two years, that tax rate will jump half a percentage point each year. By 2018, high income earners will be paying 12%. In 2019, the rate will fall back to 11.5%. Similarly, taxes will go up by 0.5% a year for people within the $100,000 to $250,000 tax bracket, 10.5% in 2016, 11% in 2017 and 11.5% by Those making under $100,000 will still pay a 10% tax. Alberta Family Tax Credits Starting July 1, 2015, the Alberta Family Employment Tax Credit will increase to $754 for one child, to a maximum of $1,987 for four or more children. A new refundable tax credit aimed at supporting the working family in Alberta will also be introduced on July 1, The new Alberta Working Family Supplement (AWFS) will pay families with one child $1,100, plus an additional $550 per child to a maximum of three additional children. This equates to a maximum annual payment of $2,750 for a family with four children.

3 Health Care Premiums Effective July 1, 2015, the Government of Alberta will reintroduce a health care premium called the Health Care Contribution Levy. This is a more extreme levy in comparison to a previous Alberta health care premium which was eliminated in The levy will not apply to people with taxable income of less than $50,000. For those with more than $50,000 of taxable income, the levy will increase in $200 increments as income rises until reaching a per person maximum of $1,000 for those with taxable income above $130,800. The previous Alberta Health Care Insurance Premium was capped at $528 per person per year or $1,056 per family per year. The Health Care Contribution Levy will be paid through personal income tax and will be administered by the CRA. This new levy will significantly impact families. For instance, if both spouses are earning above $130,000 per year, the levy will be $1,000 per person, totalling $2,000. This is almost double the old Alberta Health Care Insurance Premium in 2008 of $1,056. Charitable Donations Changes to tax incentives for charitable donations could influence an individuals choice to participate in community assistance in The budget proposes to reduce the Alberta donation credit down to a rate of 12.75%, from our current donation credit of 21%. Corporate Tax Rates Alberta general corporate tax rate remains at a 10% flat rate and the small business tax rate remains at 3%. How MNP can help: Our teams of skilled tax advisors can work with businesses and their employees to offset the impact of the new tax rules by minimizing tax exposure and maximizing any tax benefits or opportunities that are available. Tax Measures Affecting Specific Client Groups MNP serves a diverse range of clients in diverse industries and sectors. Thankfully, the new budget put forward by Finance Minister Robin Campbell presents no changes specifically addressing the needs of our clients, minus the changes to personal income tax that will affect Albertans from every industry and sector.

4 ABOUT MNP MNP is a leading national accounting, tax and business consulting firm in Canada. We proudly serve and respond to the needs of our clients in the public, private and notfor-profit sectors. Through partner-led engagements, we provide a collaborative, costeffective approach to doing business and personalized strategies to help organizations succeed across the country and around the world. Alberta Region Tax Contacts CALGARY Randy Bella Andrew Fleming Stew Henderson Dylan Hughes James Meadow (Int l Tax) Jeff Kawamura Douglas Ng Michelle O Brien-Moran Jason Smith Jennifer Hanna (Int l Tax) EDMONTON Mark Bernard Kathy Bonazew (Int l Tax) John Hanson Glen Thompson Kevin Nitchke Brian Zrobek GRANDE PRAIRIE Kim Drever Tracy Leishman RED DEER Darren Swann Graham Heron LETHBRIDGE Trevor Tamke Michael Unick MEDICINE HAT Deidre Jensen

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