Lower personal income taxes positive news for affordability but other burdensome tax rates remain unchanged
Calgary, February 27, 2025 — The Canadian Federation of Independent Business (CFIB) commends the Alberta government for lowering personal income taxes, which will reduce the tax burden for workers and businesses that are sole proprietors. However, the government missed an opportunity on other key CFIB tax reduction recommendations, including lowering the province's insurance premium tax to reduce the high cost of insurance, and reducing the province's 2% small business tax rate to allow more small businesses to re-invest in their communities.
“Ongoing affordability problems alongside the threat of a trade war between Canada and the United States have put Alberta small businesses and consumers in a difficult position,” said Bradlee Whidden, senior policy Analyst for Western Canada. “CFIB has called on governments across the country to reduce their tax burden to offset the potential financial impact of tariffs, so we are pleased to see Alberta take steps to address affordability.”
According to recent survey results, 73% of Alberta small businesses want the provincial government to place a high priority on reducing taxation, higher than nearly every other area of focus.
“While the small business tax rate is a significant cost burden for small businesses, it contributes less than half a percent of provincial revenues, meaning the province could lower it with minimal fiscal impact,” added Whidden. “Other provinces have recognized the need to reduce their small business tax rate with multiple other provinces now having lower tax rates for small business income than Alberta, harming the province’s competitiveness. The Alberta government missed a real opportunity to deliver some meaningful small business tax relief.”
Nova Scotia recently moved to reduce its small business tax rate to 1.5% and raised its threshold, while Saskatchewan chose to keep its rate at 1% earlier this year—a measure that was originally temporary—alongside a higher threshold. With these actions, four provinces have lower small business tax rates than Alberta while four others have higher rates, placing Alberta in the middle of the pack.
CFIB recommends the Alberta Government continue working to lower the cost of doing business while making it easier to trade within Canada by removing the province’s interprovincial trade barriers through embracing mutual recognition, something Nova Scotia has recently announced its intention to do.
Bradlee Whidden
587-971-8933
Bradlee.Whidden@cfib.ca
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 100,000 members (10,000 in Alberta) across every industry and region. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.