Job Creation Tax Cut

cartoon man holding money chart showing growth

On Monday, July 1st, Bill 3 from the UCP came into effect. This bill is what they have called the Job Creation Tax Cut. You have probably heard about it on the news, and you may not be  sure what exactly what this means for you as a business owner in Alberta.

Small Business Tax Rate

First, we will start with what is staying the same. The small business tax rate will not be changing from the current 2% rate in Alberta. What this means, is that all Canadian-Controlled Private Corporations with active business income (excluding things like investment income & rental income), will have a provincial tax rate of 2% up to $500,000. If you are interested in reading more on the Small Business Deduction, you can get that information here

Large Corporation Tax Rate

The Large Corporation tax rate is what has been affected by Bill 3. In the next few years, it will be reduced by 4% overall, going from 12 to 8 percent by January 1, 2022. 

Below is the schedule for the changes laid out by the UCP, the first change of a 1% reduction has already taken place this week. 

July 1, 2019 11%
January 1, 202010%
January 1, 20219%
January 1, 20228%

Some information about the effects of Bill 3 from the Alberta website are:  

  • As of this week, we will have the lowest Corporate Tax Rate in Canada.
  • As of 2022 when the cuts have finished, we have a lower combined federal and provincial tax rate than 44 US States.

As mentioned previously, the UCP has named this the “Job Creation Tax Cut”, they believe that by having some of the lowest tax rates in North America, it will make Alberta a more enticing place to invest in, and therefore create more jobs for Albertans. 

If you would like to read more about Bill 3, you can check it out here.