Tax Alert | Alberta Budget 2024

On February 29, 2024, Minister of Finance Nate Horner presented Alberta’s 2024 budget. This year’s fiscal plan touts significant investments to restructure the province’s healthcare system, address the rising number of students, improve access to affordable housing, promote and support safe communities, boost job creation and economic development, and strengthen the province’s capacity to respond to natural disasters.

Despite the increased spending, the government remains committed to controlling costs and is forecasting a surplus of $367 million for 2024–25—a substantial decline, however, from last year’s $2.4 billion budgeted surplus.

Several interesting tax measures are included in this year’s budget, as summarized below.

Tobacco Tax Measure 

The budget announced an increase to tobacco tax rates, making the province’s rates more consistent with those in surrounding provinces. Effective March 1, 2024, the tax on cigarettes increases by 2.5 cents (i.e., from 27.5 cents to 30 cents) per cigarette, and the tax on smokeless tobacco products increases by 7.5 cents (i.e., from 27.5 cents to 35 cents) per gram.

The government also announced plans to establish a “cross-ministry/agency” working group to review the pervasiveness of contraband tobacco and identify potential measures to address it. 

Vaping Tax Measure

The budget reaffirmed Alberta’s commitment to join the existing federal-provincial vaping tax framework as early as January 1, 2025. The province will apply tax to vaping products at the following rates (which are the same as those imposed by the federal government since October 2022):

• $1 per 2 millilitre (mL) or gram (g), or fraction thereof, for the first 10 mL/g of vaping substances in the vaping device or container; plus
• $1 per 10 mL/g, or fraction thereof, for amounts over the first 10 mL/g.

New Electric Vehicle Tax 

Interestingly, the budget includes a proposal to introduce a new annual tax of $200 on electric vehicles, excluding hybrid vehicles. This tax will be paid in addition to the usual registration fee when owners register their vehicles. The target date for implementation of the new tax is January 1, 2025.

Fuel Tax Measure

The government announced the resumption of Alberta’s fuel tax relief program. Under this program, fuel tax rates are determined quarterly based on the average West Texas Intermediate (WTI) oil price, allowing residents to benefit from lower fuel tax rates when oil prices are high. Note that the fuel tax rate for gasoline and diesel will remain at 9 cents per litre until at least March 31, 2024.

Tourism Levy Measure

Effective October 1, 2024, online brokers (e.g., Airbnb, Vrbo, Expedia, etc.) will be required to collect and remit the applicable tourism levy on temporary accommodations in Alberta purchased through their marketplaces. This change aligns with the government’s previously announced commitment and recent amendments to the Tourism Levy Act and related regulations. Note that short-term rental hosts must continue to collect and remit any applicable tourism levy on stays booked prior to the effective date of the change.

Property Tax Measure 

In this year’s budget, the province announced that the education property tax rates for 2024–25 will be frozen at $2.56 per $1,000 for residential or farmland property and $3.76 per $1,000 for non-residential property. However, the government also expects the education property tax requisition to grow from $2.5 billion last year to $2.7 billion this year, because of increases in both property values and development. While this increase will help fund rising enrolment in the province’s schools, it is a departure from the education property tax requisition freeze that was in place for 2023–24.

Note that the municipal portion of property tax rates is set independently by each municipality.

Land Titles Registration Levy Change

The province announced that it will replace its existing Land Titles Registration Levy with a new levy set at $5 per $5,000 of value for property transfers and mortgage registrations. The current levy utilizes a base fee of $50, along with variable charges of $2 per $5,000 of property value and $1.50 per $5,000 of mortgage value. The province intends to implement this change in the spring, at which time further details, including the effective date, are expected to be provided.

More Information

For information on new and extended government funding initiatives included in the 2024 Alberta budget, please navigate to our Mentor Works website here.

Further details on Alberta’s 2024 budget may be found on the provincial government website.

If you have any questions about how these proposed changes might impact your organization, please do not hesitate to contact the Ryan TaxDirect^® line at 1.800.667.1600 or taxdirect@ryan.com.

To read key updates from all of Canada’s 2024 provincial budgets, please visit our Key Changes | 2024 Canadian Federal and Provincial Budgets page.