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Alberta

Alberta government can deliver tax cut by ending corporate welfare

Published

2 months ago

4 minute read

From the Fraser Institute

By Tegan Hill

In a recent CBC interview, Premier Danielle Smith said she would “love to be able to accelerate our tax cut,” referring to her campaign promise to create a new 8 per cent tax bracket for personal income below $60,000, before adding that her government might not be able to maintain a balanced budget and introduce the cut. Fortunately, there’s a way Smith could achieve both: eliminate corporate welfare.

First, some background on Alberta’s recent tax changes.

In 2015, the provincial NDP government replaced Alberta’s single personal income tax rate of 10 per cent with a five-bracket system including a bottom rate of 10 per cent and a top rate of 15 per cent. Due to this change (and tax changes at the federal level, which increased the top federal income tax rate from 29 per cent to 33 per cent), Albertans faced significantly higher personal income tax rates.

Smith’s proposed tax cut would reduce Alberta’s bottom rate from 10 per cent to 8 per cent and is expected to save Albertans earning $60,000 or more $760 annually. While this change would fail to restore Alberta’s previous tax advantage, it would be a step in the right direction.

But due to fear of incurring a budget deficit, Smith has delayed fully implementing the $1.4 billion tax cut until 2027, contingent on the government being able to maintain a balanced budget.

Which takes us back to corporate welfare.

In 2019, after adjusting for inflation, the Alberta government spent $2.4 billion on subsidies to select businesses and industries. (In 2021, the latest year of available data, it spent $3.3 billion, however the pandemic may have contributed to this number.) And that’s not counting other forms of government handouts such as loan guarantees, direct investment and regulatory privileges for particular firms or industries. Put simply, eliminating corporate welfare would be more than enough to offset Smith’s proposed tax cut, which she promised Albertans in 2023.

Moreover, a significant body of research shows that corporate welfare fails to generate widespread economic benefits. Think of it this way; if businesses that receive subsidies were viable without subsidies, they wouldn’t need government handouts. Moreover, the government must impose higher tax rates on everyone else to pay for these subsidies. Higher taxes discourage productive activity, including business investment, which fuels economic growth. And the higher the rates, the more economic activity they discourage. Put simply, subsidies depress economic activity in some parts of an economy to encourage it in others.

For the same reason, corporate welfare also typically fails to generate new jobs on net. Indeed, while subsidies may create jobs in one specific industry, they pull those jobs away from other sectors that are likely more productive because they don’t need the subsidy.

The Smith government is hesitant to introduce Alberta’s tax cut if it can’t maintain a balanced budget, but if the government eliminates corporate welfare, it can avoid red ink while also fulfilling a promise it made to Alberta workers.

Tegan Hill

Director, Alberta Policy, Fraser Institute
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Alberta

Premier Danielle Smith calls for federal election

Published on March 14, 2025

By

Premier Danielle Smith issued the following statement on the swearing in of Canada’s 24th Prime Minister and his new federal cabinet.

“Now that Prime Minister Mark Carney has been officially sworn in, his first item of business should be to call a general election.

“I am extremely concerned that this cabinet includes most of same ministers responsible for the most damaging government policies levelled by Ottawa against Alberta in our over 100-year history. We are gravely concerned that plans to significantly increase the industrial carbon tax will be just as damaging to Alberta’s economy as the consumer carbon tax has been.

“The Prime Minister also has not yet condemned harmful policies such as:

  • The proposed emissions cap which continues to threaten our energy sector.
  • Bill C-69 which still hampers critical infrastructure projects.
  • Failed bail policies which continue to put our communities at risk, undermining the safety and security that Albertans deserve.
  • Gun bans that target law-abiding hunters and sport shooters.
  • Open border policies which are allowing over two million people per year to enter Canada.
  • The plastics ban which puts billions of dollars of investment and thousands of jobs at risk.
  • Bill C-59 which bans businesses from communicating about their environmental goals.
  • The electric vehicle mandate which calls for 100 percent of new vehicles sold to be electric by 2035.
  • The Sustainable Jobs Act, which aims to transition energy workers to a net zero economy as they work to shut down the energy sector.

“Our province has always been a leader in innovation, economic growth, and responsible resource development. We will continue to stand up for our industries, push back against policies that unfairly target Alberta, and fight for a fair deal within Confederation.

“The Prime Minister must put Canada first and call an election immediately to ensure that whoever is leading this country has a four year mandate from all Canadians, especially in light of the ongoing tariff conflict with the U.S.”

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Alberta

Highway twinning from Sylvan Lake to Rocky Mountain House among dozens of infrastructure projects beginning in Alberta

Published on March 14, 2025

By

Alberta’s government is investing in roads, bridges, and water infrastructure to strengthen the economy and meet the needs of the province’s growing population.

As Alberta’s population continues to grow so does the need for safe, reliable and effective infrastructure to support communities across the province, attract investment and boost economic development. Maintaining and expanding the provincial road and bridge network is vital for growing communities and expanding market access for local industry.

If passed, Budget 2025 would invest more than $8.5 billion for the Ministry of Transportation and Economic Corridors’ three-year Capital Plan, a $333.7-million increase compared with Budget 2024. This total includes more than $4 billion over three years for transportation infrastructure projects to benefit rural communities across the province, as well as $2.1 billion over three years for projects in the Calgary region, and $2 billion for projects in the Edmonton region.

“We are investing in the transportation and water infrastructure our communities need to address rapid growth, promote economic development and support a high quality of life. These investments help ensure our province remains the best place in Canada to live, work and raise a family.”

Devin Dreeshen, Minister of Transportation and Economic Corridors

The total capital investment in this year’s budget includes $2.6 billion for planning, design and construction of major highway and bridge projects. This work will create thousands of jobs across Alberta, improve traffic flow, and support the development of major trade corridors through projects such as twinning Highway 3 and Highway 11, and major improvements to Deerfoot Trail and Highway 881. Capital investment funding also includes more than $186 million over three years for more than 50 engineering projects to address future infrastructure needs as the province continues to grow.

“These investments in Calgary’s roads and bridges are critical to supporting our growing city. Improved infrastructure means safer commutes, better connections for businesses and a stronger foundation for future growth.”

Myles McDougall, MLA, Calgary-Fish Creek

If passed, Budget 2025 would also include a $1.7-billion investment over three years for capital maintenance and renewal, which extends the life of the province’s existing road and bridge network, keeping the highway network safe and helping industry create and maintain well-paying jobs.

“Building and fixing roads and bridges improves the productivity of Alberta’s economy. Budget 2025 continues investing in critical infrastructure using local materials and labour. The ARHCA applauds Alberta’s leadership and commitment to all modes of trade-enabling transportation.”

Ron Glen, CEO, Roadbuilders and Heavy Construction Association

In addition to improving and maintaining the provincial highway network, Alberta’s government has allocated $3.9 billion for capital grants to municipalities over the next three years. This includes funding for LRT projects in Edmonton and Calgary, as well as $5 million in new funding to support planning work for a new transit solution connecting the Calgary airport terminal with the future Blue Line LRT extension station.

“Investing in infrastructure is critical to establishing a solid foundation for economic growth, sustainability and thriving communities. As our population continues to grow, we must make smart investments in roads, bridges, water and transportation infrastructure to ensure our communities and businesses remain vibrant, connected and ready for the future.”

Deborah Yedlin, president and CEO, Calgary Chamber of Commerce

If passed, targeted investments in Budget 2025 would also support the growth and prosperity of rural communities by providing $126.8 million over three years to municipalities through the Strategic Transportation Infrastructure Program. This program helps smaller municipalities improve critical local transportation infrastructure.

Additionally, ongoing capital grants totalling $519.7 million over three years in water and wastewater infrastructure will ensure Albertans in every community have reliable access to clean drinking water and effective wastewater services.

Finally, Budget 2025 would provide $240.1 million to build and repair water management infrastructure, including dams, spillways, canals and control structures. This investment provides irrigation for the agriculture sector and flood mitigation for Alberta communities.

Budget 2025 is meeting the challenge faced by Alberta with continued investments in education and health, lower taxes for families and a focus on the economy.

Quick Facts

Regional Highlights

North region

  • Budget 2025, if passed, invests $1.25 billion over three years in road and bridge construction projects to benefit the North region, including:
    • $101 million for Highway 63 twinning, north of Fort McMurray
    • $141 million for Highway 881 safety and road improvements
    • $87 million for construction of the La Crete bridge
    • $69 million for Highway 40 grade widening between Hinton and Grande Cache
    • $7 million for the La Loche Connector road – extending Highway 956 from La Loche, Saskatchewan to Fort McMurray
    • $4 million for twinning Highway 40 south of Grande Prairie
    • $127.5 million for Highway 60 Capital Improvements

Central region

  • Budget 2025, if passed, invests $1.4 billion over three years in road and bridge construction projects to benefit the Central region, including:
    • $208 million for Highway 11 twinning between Sylvan Lake and Rocky Mountain House
    • $98 million for the Vinca Bridge replacement on Highway 38 (near Redwater) as part of work to enhance the high-load corridor

South region

  • Budget 2025, if passed, invests $363 million over three years in road and bridge construction projects to benefit the South region, including:
    • $106 million for Highway 3 twinning (between Taber and east of Burdett)
    • $92 million for the Highway 2 Balzac Interchange Replacement
    • $24 million for the Highway 1A upgrade (Stoney First Nation)
    • $9 million for the QEII Highway and 40th Avenue interchange ramp (near Airdrie)

Calgary

  • Budget 2025, if passed, invests $2.1 billion over three years in road and bridge construction projects, and municipal grants to benefit the Calgary region, including:
    • $173.1 million for the Calgary Rivers District and Event Centre
    • $484.8 million for Deerfoot Trail upgrades
    • $62.4 million for the Springbank Off-stream Reservoir (SR1) project
    • $11.9 million for the Bow River Reservoir (Ghost Reservoir Infrastructure Project)
    • $100 million for the Calgary Ring Road (West Stoney Trail)
    • $8 million for the completion of the Highway 201 Bow River Bridge on the southeast Stoney Trail
    • $26.5 million for the completion of the Stoney Trail and Airport Trail interchange

Edmonton

  • Budget 2025, if passed, invests $2 billion over three years in road and bridge construction projects to benefit the Edmonton region, including:
    • $31.9 million for the Ray Gibbon Drive expansion
    • $31 million for the Terwillegar Drive widening from Rabbit Hill Road to Windermere Boulevard
    • $52.7 million for the Terwillegar Drive Expansion improvements to the interchange at SW Anthony Henday Drive.
    • $20.3 million for Highway 16A and Range Road 20 Safety Improvements
    • $17.2 million for Highway 19 twinning
    • $40.2 million for the Highway 2 and 65 Avenue Interchange in Leduc
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