Alberta’s income tax ‘advantage’ exists for the poor and the rich, but not those in between
Source: CBC News
Author: Robson Fletcher
Alberta governments of every stripe love talking about the “tax advantage” in this province.
And it’s generally true that Albertans pay less tax — on the whole — than other Canadians, when you add up all the different types of taxation that all three levels of government throw at us.
But when people think of taxes, they often think first of income tax. And that’s where many people might be surprised about Alberta.
The phrase “Alberta tax advantage” figured heavily into the budget introduced by Ralph Klein’s government in the year 2000, which made income-tax reform a key plank. That budget set the stage for the “flat tax” system, which set Alberta apart from other provinces for the next decade and a half.
Unlike people in the rest of the country, who were subject to progressively higher tax rates that increased with income, Albertans paid the same rate — a flat 10 per cent — regardless of how much money they made.
Facing a massive budget shortfall in the wake of the 2015 oil-price crash, the short-lived government of Jim Prentice introduced plans to kill the flat tax, but never passed the legislation before his Progressive Conservatives were defeated by Rachel Notley’s upstart NDP. The new government then went ahead and eliminated the flat tax, itself.