Budget 2011 forecasts deficits of $3.4 billion for 2011-2012 and $681 million for 2012-2013. A return to a balanced budget and a surplus of $1.3 billion is forecasted for 2013-2014, one year later than planned. The deficits will be offset by transfers from the Sustainability Fund, as will the forecast deficit of $4.8 billion for 2010-2011. It’s expected that the Sustainability Fund whose asset value peaked near $15 billion just two years ago will be worth just $2.3 billion next year.
No tax increases or new taxes were announced by the government. The following is a summary of the tax-related measures contained in the budget.
Indexation – Alberta continues to index its personal tax system for inflation. As a result, personal tax credits will increase by 0.9% for the 2011 tax year reflecting relatively low inflation for 2010. Basic personal and spousal amounts will rise to $16,977 in 2011, from $16,825 in 2010.
Alberta Family Employment Tax Credit- Indexation will also increase benefits for recipients of the Alberta Family Employment Tax Credit. Beginning in July 2011, payments will rise to $702 for one child, $1,341 for two children, $1,724 for three children and $1,852 for four or more children. The income level at which the credit starts to phase out will also rise, to $34,280.
Education Property Taxes – In 2011-2012, education property tax rates will decrease by about 8%. The residential/farm property tax rate will fall from $2.93 to $2.70 per $1,000 of equalized assessment, and the commercial rate will fall from $4.31 to $3.97 per $1,000 of equalized assessment.
Tax Exempt Fuel Use (TEFU) Rebates – Effective February 25, 2011, the TEFU rebate for licensed vehicles, including the Prescribed Rebate Off-road Percentages (PROP), will be eliminated. The marked fuel (tax excluded) component of TEFU, the Alberta Farm Fuel Benefit, and the Alberta Farm Fuel Distribution Allowance are not affected by this change. Elimination of the TEFU rebate, including PROP, will focus the program on unlicensed vehicles, machinery, and equipment.
Alberta Energy Efficient Rebate Program (2009 Alberta Budget) – A new three-year provincial consumer rebate program was introduced for energy efficient purchases. Cash rebates are available to existing homeowners who improve their energy efficiency, to new home buyers who purchase energy efficient homes and to taxi operators who are transitioning their fleet to hybrid vehicles. Eligible purchases for new home buyers and homeowners, which are retroactive to January 1, 2009 include:
Taxi-operator hybrid rebates (up to $3,000) are retroactive to July 1, 2008.
The rebate program is administered by Climate Change Central, a non-profit organization created in 2000. For specific information on purchase eligibility and how to apply for a rebate, visit www.ClimateChangeCentral.com, or call toll-free at 1-888-537-7202.
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