Frequently asked questions

What is a progressive tax?

The term is frequently applied in reference to personal income taxes, where people with more income pay a higher percentage of that income in tax than do those with less income. Since 2001, Alberta is the only province in Canada that has a single rate of 10% on all taxable income.

 

Why do we need a progressive tax?

A progressive tax system helps raise the revenue required for vital public services from those who benefit most from our system and who can most afford it. Alberta’s flat tax means that most low and middle income earners are actually paying more in income taxes than residents of BC and Ontario, while very wealthy Albertans pay tens of thousands of dollars less than if they lived in any other part of Canada.

 

What about a sales tax?

Every other province and the federal government also collect sales tax to help fund public services and infrastructure. In fact, if Alberta had a sales tax similar to BC or Saskatchewan, the next two closest tax jurisdictions, it would bring in an additional $5 to $6 billion annually. While some economists and conservative politicians are interested in exploring having a sales tax in Alberta, the Alberta government says in the 2014 budget that “the sales tax and health premiums imposed by many other provinces are disproportionately heavier on lower income individuals”. So while it is important to look at how Alberta compares to all of the taxes collected in other provinces, the fairest way to address Alberta’s tax imbalance is to establish a progressive income tax system.