The Canadian Taxpayers Federation has details several upcoming tax changes for 2025. (Photo: Febriyanta | Dreamstime.com)

By David Opinko

Albertans can brace for tax hikes, some cuts in 2025

Dec 18, 2024 | 2:37 PM

The Canadian and Alberta governments are set to implement a series of changes to your taxes in the new year.

The Canadian Taxpayers Federation (CTF) has compiled a small list of the major upcoming tax changes.

On the provincial front, they say there is only one notable change for 2025 – a promised reduction in the lowest income tax bracket.

The province has proposed reducing it from 10 per cent to eight per cent, meaning that for the first $60,000 in income, residents would only pay the smaller amount.

CTF Alberta Director Kris Sims says the announcement of this is expected in February during the government’s budget announcement.

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“The United Conservatives said this provincial income tax cut would save families about $1,500 each and Alberta families need that kind of tax relief right now,” says Sims.

When it comes to federal changes, however, Canadians will end up paying more.

Payroll taxes:

• The federal government is raising the mandatory Canada Pension Plan and Employment Insurance contributions in 2025. These payroll tax increases will cost a worker up to an additional $403 next year.
• Federal payroll taxes (CPP and EI tax) will cost a worker making $81,200 or more $5,507 in 2025. Their employer will also be forced to pay $5,938.

Carbon tax:

• The federal carbon tax is increasing to about 21 cents per litre of gasoline, 25 cents per litre of diesel and 18 cents per cubic metre of natural gas on April 1. The carbon tax will cost the average household between $133 and $477 in 2025-26, even after the rebates, according to the Parliamentary Budget Officer.

Alcohol taxes:

• Federal alcohol taxes will increase by two per cent on April 1. This alcohol tax hike will cost taxpayers $40.9 million in 2025-26, according to Beer Canada.
• Following Budget 2024, the federal government also increased capital gains taxes and imposed a digital services tax and an online streaming tax.

Temporary Sales Tax Holiday:

• The federal government announced a two month sales tax holiday on certain items like pre-made groceries, children’s clothing, drinks and snacks. The holiday will last until Feb. 15, 2025, and could save taxpayers $2.7 billion.

The full report on upcoming tax changes for 2025 can be found on the Canadian Taxpayers Federation website.

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