A Fraser Institute study shows Alberta’s tax advantage is over because of corporate and personal income tax hikes.
“Alberta used to enjoy some of the lowest tax rates in North America, which attracted investment and people to the province, but the current provincial government has quickly eroded that advantage by increasing taxes, which are hurting the economy,” Fraser Institute’s director of provincial prosperity studies Ben Eisen said.
In 2014, Alberta had the lowest corporate tax rate in Canada at 10 per cent.
In 2015, the NDP government raised the corporate tax to 12 per cent, which is higher than B.C. (11 per cent), Ontario (11.5 per cent) and Quebec (11.9 per cent).
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The Fraser Institute also noted Alberta had the lowest combined top personal income tax rate in Canada, which was a single rate of 10 per cent tax on all incomes. That changed when the NDP government introduced fixed tax rates and increased the top rate by 50 per cent, the public policy think-tank said.
The Fraser Institute study shows Alberta’s top combined marginal personal income tax rate was the lowest in North America in 2014 but is now the 16th highest among all provinces and U.S. states.
“Alberta held a competitive advantage on personal and corporate income taxes, which helped driver the province’s economic growth. That advantage is now gone,” Fraser Institute senior policy analyst Steve Lafleur said.
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The study suggested competitive personal and corporate income tax rates lead to greater economic growth.
The province had the second-highest rate of economic growth in North America between 2001 and 2014, averaging 3.3 per cent annually.
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