Alberta Budget is balanced, but where is the income tax cut?

Posted on March 14, 2024 by Vauxhall Advance

Well, that was close.

The good news is the Alberta budget is balanced, spending is restrained and money is being saved for the future.

But the bad news is, our income tax reduction is nowhere in sight, the provincial fuel tax is going up and there’s a new land transfer tax.

First, the good news.

Finance Minister Nate Horner presented the province’s 2024-25 budget with a $367 million surplus.

That’s million, with an M. In a behemoth budget worth about $73 billion, that surplus is as slender as a kitten’s whisker.

Spending is being kept under control, with an increase of 3.9 per cent, which is under the rate of inflation plus population growth.

Premier Danielle Smith created this inflation-plus-population-growth spending limit for budgets last year, citing the need to maintain spending control over time.

During the budget presentation, the government reported it has put $3.2 billion down on the debt and deposited $2 billion into the Heritage Fund.

This is good news, and when compared to our neighbour in British Columbia, with an inexcusable $7.9 billion deficit, Alberta is doing well.

But, and this but is so big it could star in a 90’s rap video, where is our income tax cut?

During the 2023 election, the UCP promised to create an eight per cent tax bracket for the first $60,000 of earnings, which would save Alberta workers about $760 per year, each.

“That’s over $1,500 per family!” the UCP campaign website reads.

So, where is it?

The government now says it’s over the horizon, we just can’t see it yet.

The government says the lower income tax bracket will be created in 2026 starting at nine per cent. The eight per cent tax bracket will only appear in 2027.

You can’t say you’re going to “cut taxes for all Albertans” then delay an income tax cut, reinstate the fuel tax and create a new land transfer tax.

You read that right, the fuel tax is going back up at the end of March.

Quietly noted on page 129 of the budget, the government will increase the provincial fuel tax back up to 13 cents per litre of gasoline and diesel.

Starting in April 2022, the Alberta government reduced fuel taxes.

In 2023, the government fully suspended the fuel tax for a year.

On Jan. 1, 2024, the tax went back up to nine cents per litre. On April 1, 2024, the government plans to put it all the way back up to 13 cents per litre.

Alberta drivers are going to be double punched at the pumps on April 1, because that’s the same day Prime Minister Justin Trudeau hikes his carbon tax to 17 cents per litre of gas and 21 cents per litre of diesel.

This isn’t lower taxes. This is higher taxes.

The government is also replacing land titles taxes with a new Land Titles Registration Fee, a land transfer tax. A home valued at $450,000 will now have a $955 land transfer tax cost. The province is planning on taking in about $45 million from home sales this fiscal year, 2024-25 and $91 million next year.

Creating a new tax is like bringing a baby alligator into your house. At first, it’s small, but then it grows into a big monster and starts chomping. Albertans must get rid of this new tax that’s slithered into their kitchens.

And is a new home tax really what Albertans need? Families are leaving mortgage renewal letters unopened for weeks because they’re too scared to see what’s inside. And, instead of helping with housing affordability, the Alberta government is hitting them with a new tax. That’s Ottawa-level tone deafness.

It’s good to balance the budget, albeit on the edge of a knife, but Albertans deserve lower taxes, not higher ones.

Kris Sims is the Alberta Director for the Canadian Taxpayers Federation.