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The Alberta Advantage is a term referencing the provincial ethos of the province of Alberta and the features that differentiate Alberta from other Canadian provinces and territories. Jack Mintz, the director of the University of Calgary's School of Public Policy defined the Alberta Advantage as "a great life with rising incomes and reasonable public services..." [1]
The historical Alberta Tax Advantage was based on its "three main pillars"—lower "personal income taxes, corporate income taxes, and sales taxes." [2] According to the Fraser Institute, in "2014, Alberta had the lowest top combined federal-provincial/state tax rate out of 60 Canadian provinces and American states." [2]
A January 5, 2017 Fraser Institute article entitled "The End of the Alberta Tax Advantage", said that the 2015 tax policy changes were introduced in Alberta placed the province in the "middle of the pack". Before 2015, at 10%, "Alberta had the lowest corporate tax rate in Canada." [2] [3] The 2015 corporate tax increase to 12% meant that both British Columbia and Ontario had a 0.5% lower corporate tax rate than Alberta, and taxes in Saskatchewan, Manitoba, and Quebec that were almost identical to Alberta's. [2] By 2017, after the 2015 tax policy changes, "Alberta's top personal income tax rate was the 46th lowest." [2] The province's top rate was in the "highest third of North American jurisdictions." [2] The report said that, "Comparing the marginal personal income tax rate at four different income levels reveals that Alberta no longer [had] a distinct tax advantage in any of those levels examined." [2] While Alberta was the only Canadian province to not have a provincial sales tax, compared to "American energy jurisdictions" this does not give Alberta an advantage as "there are several states with neither a federal nor a state-level sales tax." [2]
Alberta has lowered its higher corporate tax rate to 8%, the "lowest taxes overall of any province or territory" in Canada (by 3.5%), after the passing of Bill 3, Job Creation Tax cut passed by the UCP majority Government on June 28, 2019. This reduction was originally scheduled to occur over 3 years, but was then accelerated as part of the COVID response, "Alberta's Recovery Plan", in 2020. [4]
Alberta is one of the thirteen provinces and territories of Canada. It is a part of Western Canada and is one of the three prairie provinces. Alberta is bordered by British Columbia to the west, Saskatchewan to the east, the Northwest Territories to the north, and the U.S. state of Montana to the south. It is one of the only two landlocked provinces in Canada, with Saskatchewan being the other. The eastern part of the province is occupied by the Great Plains, while the western part borders the Rocky Mountains. The province has a predominantly continental climate but experiences quick temperature changes due to air aridity. Seasonal temperature swings are less pronounced in western Alberta due to occasional Chinook winds.
The goods and services tax is a value added tax introduced in Canada on January 1, 1991, by the government of Prime Minister Brian Mulroney. The GST, which is administered by Canada Revenue Agency (CRA), replaced a previous hidden 13.5% manufacturers' sales tax (MST).
The National Energy Program was an energy policy of the Canadian federal government from 1980 to 1985. The economically nationalist policy sought to secure Canadian energy independence, though was strongly opposed by the private sector and the oil-producing Western Canadian provinces, most notably Alberta.
The harmonized sales tax (HST) is a consumption tax in Canada. It is used in provinces where both the federal goods and services tax (GST) and the regional provincial sales tax (PST) have been combined into a single value-added tax.
The economies of Canada and the United States are similar because both are developed countries. While both countries feature in the top ten economies in the world in 2022, the U.S. is the largest economy in the world, with US$24.8 trillion, with Canada ranking ninth at US$2.2 trillion.
Equalization payments are cash payments made in some federal systems of government from the federal government to subnational governments with the objective of offsetting differences in available revenue or in the cost of providing services. Many federations use fiscal equalisation to reduce the inequalities in the fiscal capacities of sub-national governments arising from the differences in their geography, demography, natural endowments and economies. The level of equalisation sought can vary, however.
In macroeconomics and finance, a transfer payment is a redistribution of income and wealth by means of the government making a payment, without goods or services being received in return. These payments are considered to be non-exhaustive because they do not directly absorb resources or create output. Examples of transfer payments include welfare, financial aid, social security, and government subsidies for certain businesses.
The Canada Health and Social Transfer (CHST) was a system of block transfer payments from the Canadian government to provincial governments to pay for health care, post-secondary education and welfare, in place from the 1996–97 fiscal year until the 2004–05 fiscal year. It was split into the Canada Health Transfer (CHT) and Canada Social Transfer (CST) effective April 1, 2004, to provide greater accountability and transparency for federal health funding.
In Canada, taxation is a prerogative shared between the federal government and the various provincial and territorial legislatures.
A corporate tax, also called corporation tax or company tax, is a type of direct tax levied on the income or capital of corporations and other similar legal entities. The tax is usually imposed at the national level, but it may also be imposed at state or local levels in some countries. Corporate taxes may be referred to as income tax or capital tax, depending on the nature of the tax.
Income taxes in Canada constitute the majority of the annual revenues of the Government of Canada, and of the governments of the Provinces of Canada. In the fiscal year ending March 31, 2018, the federal government collected just over three times more revenue from personal income taxes than it did from corporate income taxes.
The Ministry of Energy is a Cabinet-level agency of the government of the Canadian province of Alberta responsible for coordinating policy relating to the development of mineral and energy resources. It is also responsible for assessing and collecting non-renewable resource (NRR) royalties, freehold mineral taxes, rentals, and bonuses. The Alberta Petroleum Marketing Commission, which is fully integrated with the Department of Energy within the ministry, and fully funded by the Crown, accepts delivery of the Crown's royalty share of conventional crude oil and sells it at the current market value. The current ministry was formed in 1986, but ministries with other names dealing with energy resources go back to the Ministry of Lands and Mines in 1930.
The Canadian federal budget for the fiscal year 2006–2007, was presented to the House of Commons of Canada by Finance Minister Jim Flaherty on May 2, 2006. Among the most notable elements of the federal budget were its reduction of the Goods and Services Tax by one percentage point, income tax cuts for middle-income earners, and $1,200-per-child childcare payment for Canadian parents.
Canada has access to all main sources of energy including oil and gas, coal, hydropower, biomass, solar, geothermal, wind, marine and nuclear. It is the world's second largest producer of uranium, third largest producer of hydro-electricity, fourth largest natural gas producer, and the fifth largest producer of crude oil. In 2006, only Russia, the People's Republic of China, the United States and Saudi Arabia produce more total energy than Canada.
A province is almost always an administrative division within a country or state. The term derives from the ancient Roman provincia, which was the major territorial and administrative unit of the Roman Empire's territorial possessions outside Italy. The term province has since been adopted by many countries. In some countries with no actual provinces, "the provinces" is a metaphorical term meaning "outside the capital city".
In Canada, the federal government makes equalization payments to provincial governments of lesser fiscal capacity so that "reasonably comparable" levels of public services can be provided at similar levels of taxation. Equalization payments are entrenched in the Constitution Act of 1982, subsection 36(2).
The British Columbia carbon tax has been in place since 2008. It is a British Columbia policy that adds additional carbon taxes to fossil fuels burned for transportation, home heating, and electricity and reduces personal income taxes and corporate taxes by a roughly equal amount. The carbon tax is collected at the point of retail consumption.
In Canada’s federal tax system, the small business tax rate is the tax rate paid by a small business. As of 2019, the small business tax rate is 9% The general corporate tax rate is 28%. Additionally, each province or territory operates its own corporate tax system, with varying treatment for small businesses.
Carbon pricing in Canada is implemented either as a regulatory fee or tax levied on the carbon content of fuels at the Canadian provincial, territorial or federal level. Provinces and territories of Canada are allowed to create their own system of carbon pricing as long as they comply with the minimum requirements set by the federal government; individual provinces and territories thus may have a higher tax than the federally mandated one but not a lower one. Currently, all provinces and territories are subject to a carbon pricing mechanism, either by an in-province program or by one of two federal programs. As of April 2023 the federal minimum tax is set at CA$65 per tonne of CO2 equivalent, set to increase to CA$170 in 2030.
Corporate taxes in Canada are regulated at the federal level by the Canada Revenue Agency (CRA). As of January 1, 2019 the "net tax rate after the general tax reduction" is fifteen per cent. The net tax rate for Canadian-controlled private corporations that claim the small business deduction, is nine per cent.
