Alberta’s new tax cut hits paycheques in July

Airdronians can expect to see the Government of Alberta's promised tax cut on their paycheque starting in July.

In March, the Alberta government introduced legislation to create a new eight percent personal income tax bracket on earnings up to $60,000, fulfilling a key promise from Budget 2025.

The change is expected to save individual taxpayers up to $750 per year, and up to $1,500 annually for two-income families.

The Financial Statutes Amendment Act, 2025 (Bill 39), introduced in March, replaces the former 10 per cent flat tax with a new lower rate for income up to $60,000, while income above that amount will continue to be taxed at 10 per cent. The province projects the tax cut will cost $1.2 billion in 2025, rising to $1.4 billion by 2028.

According to reports, the benefit would be retroactive to January 2025, and Airdronians can expect larger tax returns.

The tax reduction is one of several fiscal changes included in Bill 39, which also revises how the government handles budget surpluses, increases legal aid funding, and adjusts fuel taxes and income support programs.

"Amendments to the Sustainable Fiscal Planning and Reporting Act now allow 50 per cent of surplus funds in a fiscal year to be directed to the Alberta Heritage Savings Trust Fund, with the remaining 50 per cent available for debt repayment or one-time spending that doesn’t add to ongoing operating costs. Previously, all surplus funds were required to be used exclusively for debt repayment."

Other provisions in the bill include:

• A fuel tax increase: The tax on locomotive fuel will rise from 5.5 cents to 6.5 cents per litre starting March 1, 2025.
• Elimination of a financial oversight body: The legislation repeals sections of the Auditor General Act that previously established the Audit Committee, which oversaw financial reviews and Auditor General reports. The Treasury Board will now absorb its responsibilities.
• Changes to income support calculations: Amendments to the Income and Employment Supports Act will alter how core income support payments and annual adjustments are determined.

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