Summary: Alberta Budget 2025

The budget implemented the previously proposed new personal tax bracket on the first $60,000 of income, one year earlier than expected. The budget didn't introduce or make changes to any business tax measures. 

AB Budget 2025 estimates that the province’s surplus for the 2024-25 fiscal year (ending March 31) will be $5.8 billion, compared to the $0.4 billion surplus projected in the previous budget. The budget assumes 10% tariffs on energy products and 15% tariffs by the United States on all other goods, amongst other assumptions. 

Fiscal projections for the next three years are as follows:

Business tax measures

Corporate tax rates

AB Budget 2025 makes no changes to the corporate tax rates or the $500,000 small business limit. 

2025 combined federal and Alberta corporate tax rates

Personal tax measures

Personal tax rates

A new tax bracket that was originally announced in AB Budget 2024 is being introduced early. Specifically, the budget introduces a provincial tax rate of 8% for the first $60,000 of income earned by individuals (down from a provincial tax rate of 10% on the first $148,269 of income in 2024). The change will be effective as of January 1, 2025. Previously, the change was announced to be effective at a 9% rate in 2026 and an 8% rate in 2027.

This new tax bracket is expected to provide individuals with tax savings of up to $750.

The indexed personal tax brackets (combined federal and provincial) and the respective marginal tax rates for 2025 are as follows:

Note that while the new tax rates are effective January 1, 2025; employed individuals should expect to see a difference in their paycheques when payroll deduction tables are updated effective July 1, 2025.

Personal tax credits

AB Budget 2025 introduces a new non-refundable tax credit to ensure Alberta taxes don’t increase in the rare case an Albertan claims more than $60,000 in non-refundable tax credits. This measure will be effective starting in 2025.

Sales and excise tax measures

Education property tax 

AB Budget 2025 increases the education property tax for residential/farmland properties to $2.72 / $1,000 assessment (from $2.56 / $1,000 assessment) and for non-residential properties to $4.00 / $1,000 assessment (from $3.76 / $1,000 assessment).

Locomotive fuel tax

The budget increases the locomotive fuel tax to 6.5% (from 5.5%) per litre effective March 1, 2025. 

Have questions? Let’s talk. Contact your local advisor or reach out to us here. 

Visit our Budget 2024 hub to learn more about all federal and provincial budgets.   

^Disclaimer 

The information contained herein is general in nature and is based on proposals that are subject to change. It is not, and should not be construed as, accounting, legal or tax advice or an opinion provided by  Doane Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, specific circumstances or needs and may require consideration of other factors not described herein.