Tax Highlights from the 2026 Alberta Budget

Minister of Finance Nate Horner tabled the 2026 Alberta provincial budget on February 26, 2026.

Total revenue is estimated at $74.6 billion in 2026/27, $0.7 billion lower than the 2025/26 third-quarter forecast of $75.3 billion. Ongoing global economic, trade, and geopolitical uncertainties continue to affect all major sources of revenue, particularly resource revenue. West Texas Intermediate (WTI) oil price is expected to average US$60.50 per barrel in 2026/27, which is $1 per barrel lower than in 2025/26. Prices are projected to recover to $67.50 per barrel by 2028/29.

The budget projects a deficit of $9.4 billion for the 2026/27 fiscal year, decreasing to $7.6 billion and $6.9 billion for 2027/28 and 2028/29, respectively. The forecast deficit for the nearly completed 2025/26 fiscal year is now $4.1 billion, compared with the previously projected deficit of $5.2 billion.

The 2026/27 projected deficit is largely the result of declining non-renewable resource revenues and higher costs required to deliver essential services to Albertans in a growing province.

The province introduced a fiscal framework three years ago mandating it to present balanced budgets and limit year-over-year operating expense growth. The requirement may be suspended in the event of an unexpected disaster, a revenue decline by $1 billion or more, or if revenue is projected to fall below the prior-year third-quarter expense forecast.

On the income tax front, no changes are proposed to personal or corporate income tax rates. However, the budget introduces a new vehicle rental tax, higher tourism levies, a consolidated caregiver tax credit, increases to education property tax, and a framework for a new data centre levy.

The following summarizes the changes announced in the budget. Please note that some of these changes remain proposals until passed into law by the provincial government.

Personal Tax Matters

Personal Income Tax Rates and Tax Brackets

There are no proposed changes to personal income tax rates in the 2026 budget. Tax brackets and other amounts have been indexed by 2% under the Alberta escalator to account for inflation. The table below outlines Alberta’s personal income tax rates and brackets for 2026.

The table below outlines the highest combined federal and provincial marginal tax rates for various types of income in 2026.

New Alberta Caregiver Tax Credit

Caregivers in Alberta may currently claim either the caregiver credit or the infirm dependent credit. Effective for the 2027 and subsequent tax years, these non-refundable tax credits will be replaced with a new non-refundable Alberta Caregiver Credit.

The Alberta Caregiver Credit will be available to Albertans who care for an eligible adult relative who is dependent due to a mental or physical infirmity. Unlike the current credits, the new credit will also be available to individuals caring for an infirm spouse. However, it will not be available in respect of non-infirm senior parents or grandparents who reside with the caregiver.

The Alberta Caregiver Credit will follow the structure of the current caregiver credit, which has a maximum amount of $13,180 in 2026, resulting in tax savings of up to $1,054. A partial credit is available when the dependant’s income falls between $20,956 and $34,136.

These amounts will be adjusted under the Alberta escalator beginning in the 2027 taxation year and in subsequent years. The change is expected to reduce tax expenditures by approximately $12 million in the first full year of implementation.

Corporate Tax Matters

Corporate Income Tax Rates

There are no proposed changes to corporate income tax rates. The table below outlines Alberta corporate tax rates and the small business limit for 2026.

The table below outlines the 2026 combined federal and provincial corporate income tax rates applicable to various types of income earned by a Canadian Controlled Private Corporation (CCPC).

Other Initiatives

Vehicle Rental Tax

Budget 2026 introduces a tax on vehicle rentals in Alberta. The tax will apply to passenger vehicles – defined as vehicles designed primarily for the transportation of people that seat eight or fewer passengers. Vehicles under long-term leases, as well as non- passenger vehicles such as cargo vans and moving trucks, will be excluded from the tax.

The tax will be set at 6% of the rental price, excluding the federal Goods and Services Tax (GST). Itemized charges for insurance and fuel will also be excluded, as other provincial taxes already apply to those amounts.

The tax is expected to take effect on January 1, 2027, with additional details to be provided when legislation is introduced in fall 2026. In 2027/28, the first full year of implementation, the tax is projected to generate approximately $36 million in additional revenue.

Tourism Levy

The tourism levy applies to the price of short-term accommodation (e.g. hotels, motels, and inns) in Alberta.

Budget 2026 increases the tourism levy rate from 4% to 6%, effective April 1, 2026. The higher rate is expected to generate approximately $66 million in additional revenue in 2026/27.

Education Property Tax

In Budget 2025, the government committed to increasing the education property tax over two years to cover one-third of education operating expenses. To fulfill this commitment, rates will rise in 2026/27 from $2.72 to $2.84 per $1,000 of equalized assessment for residential and farmland properties, and from $4.00 to $4.17 per $1,000 for non-residential properties.

Combined with assessment growth and ongoing development, these rate changes are projected to increase the education property tax requisition from $3.1 billion in 2025/26 to $3.6 billion in 2026/27. In 2026/27, the tax is expected to fund 33.4% of education operating costs, up from historically low levels of less than 30% in 2023/24 and 2024/25.

Data Centre Levy Framework

As part of Alberta’s data centre strategy, amendments to the Alberta Corporate Tax Act in fall 2025 implemented a new data centre levy framework. The framework is designed to ensure Alberta receives revenue from large-scale data centres by imposing a levy on the value of their computing equipment.

The levy is fully deductible against a data centre’s corporate income taxes, helping to minimize impacts on competitiveness. Rates may be as high as 2%, with lower rates available to facilities that reduce the impact on Alberta’s power grid by supplying their own power.

The government intends to introduce further amendments in the upcoming legislative session to clarify that levy rates will be based on actual power consumption, and that power not drawn from the broader grid will qualify for a zero per cent rate.

Source: Government of Alberta: 2026 Budget

Next Steps

For tailored tax and legal advice on how these measures affect you or your business, your own tax lawyers and accountants are best positioned to advise on these proposals. Your financial advisor can also assess the impact of these proposals on your personal finances or business affairs and show you ways to take advantage of their benefits or ease their impact, align your investments accordingly, and help coordinate the right specialist for your circumstances.