New Tax Changes for Caregivers: Alberta Budget

Geoff Currier

Alberta Finance Minister Nater Horner delivered his second consecutive deficit budget on February 26. The deficit is large at $9.4 billion, which the government attributes largely to declining oil revenues. The document is called Fiscal Plan 2026-2029 meaning that this is a three-year fiscal pan, rather than the typical one-year projection.

The good news is that there are no increases in either personal or corporate tax rates. Last year’s personal tax reduction remains in place. However, this budget does plan for some new revenue streams and projects personal tax revenues to rise moderately in the coming year while corporate tax revenues are expected to decline. Education and property taxes will increase as will revenue from other tax sources.

Alberta Caregiver Credit. In a measure intended to save about $12 million in its first year, the caregiver credit and the infirm dependent credit are going to be replaced with a new non-refundable Alberta Caregiver Credit. The new credit will cover those caring for an infirm spouse. The credit will be based on the structure of the current caregiver credit, which has a maximum amount of $13,180. There’s also a partial credit available when the dependent’s income is between $20,956 and $34,1346. The new credit will take effect in 2027 and the amount will be adjusted annually.

Tax on Cars Coming. Alberta is introducing a tax on passenger vehicle rentals starting January 1, 2027. The tax will be 6% of the cost of the rental, excluding the federal GST. Longer term leases and non passenger vehicles will be exempt. This tax is expected to raise $36 million in revenue.

Tax on Tourists. The tourism levy on short-term accommodation such as hotels, motels and inns will increase from 4% to 6% beginning April 1, 2026. The budget document does not specifically mention private short-term rentals such as Airbnb. This measure is expected to generate $66 million in revenue. Only Saskatchewan’s levy is as low as Alberta’s 6%. All other provinces have higher levies.

The Education Property Tax is going to increase in 2026-27 from $2.72 to $2.84 per $1,000 of equalized assessment for residential and farmland properties and for non-residential properties the tax goes from $4.00 to $4.17 per $1,000 of equalized assessment. The goal is to increase this tax to cover one third of the cost of education.

Tax on Computing Equipment. Data centres will be impacted by the introduction of a new framework which will impose a levy on the value of computing equipment. The rates could be as high as 2% but more clarity will be needed and the budget document states that the government will be introducing amendments to the Alberta Corporate Tax Act in order to clarify that a data centre’s levy will be based on power consumption.

Horner expects to reduce the province’s deficit in the next three years but there is no plan to bring the books back into balance in that time.