News Release

September 13, 2000
Edmonton, Alberta

"There is only one direction taxes are going in Alberta and that's down. This isn't just a slogan, it's our commitment to Albertans and today's announcements are further evidence of that."

Provincial Treasurer Steve West

Province announces major cuts for business and property taxes

Albertans will benefit from $955 million in business tax cuts, Provincial Treasurer Steve West revealed today in a speech to the Edmonton Chamber of Commerce.

In addition, he said education property taxes will be reduced by $135 million next year and frozen at $1.2 billion. He said the MLA Education Property Tax Review Committee has been asked to make recommendations on how to implement the reduction. Full details will follow this fall.

The business tax cuts are based on recommendations made by the Business Tax Review Committee.

"The committee listened to what Albertans had to say about business taxes, and we're responding," said West. "These cuts will send a message that Alberta is the place to set up shop, and in today's global economy, that means a growing economy and top notch, good paying jobs for Albertans."

He said the business tax cuts will start in the spring and be phased in over four years (details in attached chart), subject to affordability. Highlights of the cuts include:

• The small business rate will be cut in half to three per cent.
• The small business threshold (the amount of income eligible for the small business rate) will be increased from $200,000 to $400,000.
• Both the general and manufacturing and processing tax rate will be reduced to eight per cent from the current rates of 15.5 and 14.5 per cent respectively.

Alberta will also work with other provinces and the federal government to reduce the capital gains inclusion rate to 50 per cent for corporate and personal income taxes. As well, the province will eliminate Alberta's capital tax on financial institutions. Another change will see Alberta make other provinces' capital taxes non-deductible for the purposes of Alberta corporate income tax.

West said the majority of the committee's recommendations were accepted, but two will undergo further review while a third won't be accepted. Up for further review is a recommendation to phase out benefits to larger companies under the Alberta Royalty Tax Credit program and another to limit fuel tax exemptions to unlicensed off-road commercial vehicles and equipment. The recommendation that wasn't accepted called for the province to limit the farm fuel exemption under the Alberta Farm Fuel Benefit Program to unlicensed vehicles and equipment.

The Business Tax Review Committee was set up by the government in February to review the level and mix of all taxes that affect businesses in Alberta.

Click here to go to the Business Tax Review Committee Report and Recommendations.

Click here to go to the Business Tax Review Committee Home Page.

Attachment:

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