Alberta Budget Announcement - 2018 ALBERTA BUDGET ANNOUNCEMENT – 2018 ALBERTA BUDGET HIGHLIGHTS On Thursday, March 22, 2018, Joe Ceci, Alberta’s President of Treasury Board and Minister of Finance, tabled Budget 2018: A Recovery Built to Last. The province’s 2018 budget delivers no new tax increases and projects a deficit of $8.8 billion for 2018-19. Highlights of the announcement are as follows: A. Corporate Tax Measures Corporate Tax Rates No new corporate income tax rate changes have been announced in this year’s Budget. The current corporate income tax rates for 2018 are as follows: Small Business Rate General Rate Rate Threshold Non M&P M&P Federal 10.0% $500,000 15.0% 15.0% Alberta 2.0% $500,000 12.0% 12.0% Investor and Investment Tax Credits In 2017, the government implemented the Alberta Investor Tax Credit (AITC) and the Capital Investment Tax Credit (CITC). The AITC was planned to operate for three years; the CITC for two years: Budget 2018 extends both credits until 2021-22. The AITC provides a 30 percent tax credit to investors who make equity investments in eligible Alberta businesses that undertake research, development or commercialization of new technology, new products or new processes. It is also applicable to Alberta businesses engaged in interactive digital media development, video post-production, digital animation and tourism. Investors will also be eligible to receive an additional 5 percent credit if they invest in eligible business corporations that meet diversity and inclusion criteria. The overall maximums for the AITC remain the same, with individual investors still limited to claiming a maximum of $60,000 in one year. The CITC provides a 10 percent, non-refundable tax credit of a corporation’s eligible capital expenditures on manufacturing, processing and tourism infrastructure, up to a maximum of $5 million. Interactive Digital Tax Credit As previously announced, the government has introduced the Interactive Digital Media Tax Credit to support Alberta’s interactive digital media sector. The tax credit will provide eligible interactive digital media companies with a benefit worth 25 percent of eligible labour costs incurred after April 1, 2018. A diversity and inclusion credit enhancement, worth up to an additional 5 percent will be available to companies that employ workers from under-represented groups. ALBERTA BUDGET ANNOUNCEMENT – 2018 B. Personal Tax Measures Personal Tax Rates No new personal income tax rate changes have been announced in this year’s Budget. The top marginal personal income tax rate for Alberta is 15 percent for 2018. The current top combined federal and Alberta marginal rates for 2018 are as follows: Salary, business income, interest 48.00% Capital gains 24.00% Eligible dividends 31.71% Non-eligible dividends 41.63% Budget 2018 provides for the continued indexation of the Alberta’s personal income tax brackets and basic personal exemption amounts. C. Other Tax Measures Cannabis Tax In December 2017, the province agreed in principle to enter into a coordinated cannabis tax framework with the Government of Canada for a two-year period following the legalization of recreational cannabis. Tax room of $1 per gram or 10 percent of the producer price, whichever is greater, will be shared between the federal and provincial governments. The provinces will receive 75 percent of this tax room and can also collect additional tax of up to 10 percent of the retail price. The federal government will use the federal excise tax to collect these amounts on behalf of Alberta. ALBERTA BUDGET ANNOUNCEMENT – 2018 ABOUT MNP MNP is a leading national accounting, tax and business consulting firm in Canada. We proudly serve and respond to the needs of our clients in the public, private and not-for-profit sectors. Through partner-led engagements, we provide a collaborative, cost-effective approach to doing business and personalized strategies to help organizations succeed across the country and around the world. Alberta Region Contacts CALGARY Randy Bella T: 403.536.5536 Andrew Fleming T: 403.536.5589 Stew Henderson T: 403.648.4186 Dylan Hughes T: 403.537.7658 Jeff Kawamura T: 403.536.5539 John Nygren T: 403.536.5541 Douglas Ng T: 403.537.7682 Michelle Janz T: 403.317.2780 Jason Smith T: 403.537.8420 Jennifer Hanna T: 403.537.7612 (International Tax) EDMONTON Mark Bernard T: 780.453.5388 John Hanson T: 780.733.8609 Kevin Nitchke T: 780.969.1413 Rob Strilchuk T: 780.429.5875 Nicholas Talarico T: 780.733.8602 Glen Thompson T: 780.453.5374 Brian Zrobek T: 780.969.1477 Kathy Bonazew T: 780.969.1454 (International Tax) GRANDE PRAIRIE Kim Drever T: 780.832.4287 Heather Hilhorst T: 780.832.4284 Tracy Leishman T: 780.832.4294 RED DEER Graham Heron T: 403.356.1255 Lance Bick T: 403.356.1301 Aina Potts T: 403.356.1267 Darren Swann T: 403.309.1232 LETHBRIDGE Michael Unick T: 403.317.2770 Mark Ritchie T: 403.359.7102 Trevor Tamke T: 403.329.2881 MEDICINE HAT Deidre Jensen T: 403.502.8467 Visit us at MNP.ca Praxity AISBL is a global alliance of independent firms. 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