Bill 2 to increase corporate tax rates, introduce progressive income tax
New income tax legislation would come into effect Oct. 1
The NDP tabled a bill today to hike the province's corporate tax rate and scrap the flat income tax.
Finance Minister Joe Ceci said Bill 2 will make taxation more equitable for all Albertans.
"We can do better on the quality of life for our lowest income earners," he said. "It's a new Alberta advantage, perhaps."
Under Bill 2, corporate taxes would be hiked at the beginning of July, to 12 per cent from the current 10 per cent.
The bill would also create five new brackets for personal income tax, which will affect those making more than $125,000 annually, about seven per cent of Alberta taxpayers.
The top bracket, those making more than $300,000 annually, will pay 15 per cent. The new rates will take effect Oct. 1.
"All of them won't think that's a great trade-off," Ceci said. "They're doing pretty well. I think it's fair to pay a little bit more if you're doing really successfully in this province."
The government is also scrapping some fee increases introduced by the previous Progressive Conservative regime.
The health care levy will be dropped entirely. Fee increases on vehicle licences and registration, land title searches, mortgages, marriage licences, birth certificates and death certificates will be cancelled.
The small business tax will stay at three per cent for earnings under $500,000.
Fildebrandt said the government can't give a straight answer on how much will be spent on restoring funding to human services, education and health care.
"The government has had four different numbers on its projected new spending levels in 24 hours," he said.
Fildebrandt said the NDP has an "ideological need to raise taxes" and said they should focus on cutting spending instead.
The personal income tax changes are expected to bring in an additional $800 million to $1 billion in the 2016-17 fiscal year. The corporate tax hike will generate another $350 million to $550 million more in the same time frame.