Financial Statutes Amendment Act, 2024 (No. 2) ($)

Summary#

• This bill makes many money-related changes in Alberta. It raises some tax brackets and credits, increases several benefit rates, creates a new annual tax on electric vehicles, and changes how future increases are calculated.
• It replaces most inflation indexing with a new “Alberta escalator” that caps annual increases at up to 2%.
• It also updates rules for ATB Financial and credit unions, and adjusts land title fees to better fit certain no‑interest mortgage products.

Key changes

• Personal income tax: Higher tax brackets and larger credits starting in 2025; future indexation tied to the capped Alberta escalator after 2025.
• Benefits: AISH, Income Support, and the Alberta Seniors Benefit go up on January 1, 2025, with future annual increases tied to the Alberta escalator starting in 2026.
• Families: Alberta Child and Family Benefit amounts increase; some updates take effect July 1, 2025.
• Electric vehicles: New $200 per‑year tax, paid at registration and pro‑rated if you register for part of a year (start date to be set).
• Housing/land titles: Exempts certain no‑interest (Sharia‑compliant) mortgage transfers from the new land title levy; tweaks mortgage/caveat fee rules.
• Financial institutions: Lets ATB and credit unions use lending subsidiaries and sets new capital and safety standards (start date to be set).

What it means for you#

• Taxpayers

  • You’ll likely pay less provincial income tax in 2025 because tax brackets and common credits (like the basic and spousal amounts) increase. Future indexing is capped at up to 2% per year.
  • Seniors get a larger age amount and higher income threshold before it begins to phase out.

• AISH clients

  • Monthly living allowance increases to $1,901 starting Jan 1, 2025.
  • The “modified living allowance” base rises from $322 to $365 plus the applicable accommodation charge.
  • The AISH child benefit rises to $227 for the first child and $114 for each additional child.
  • After 2025, annual increases are tied to the Alberta escalator (up to 2% a year).

• Income Support recipients

  • Core essential payments go up Jan 1, 2025. Examples:
    • 1 adult, expected to work: up to $469 (was $415).
    • 1 adult, barriers to full employment: up to $606 (was $536).
  • Shelter maximums rise. Examples (private housing):
    • 1 adult: $373 (was $330).
    • 1 adult + 1 child: $631 (was $558).
  • Some special payments will be set by the Minister rather than automatically indexed. After 2025, most yearly increases are tied to the Alberta escalator.

• Seniors

  • Alberta Seniors Benefit maximums increase Jan 1, 2025. Examples:
    • Maximum annual cash benefit: about $3,868 (single) and $5,801 (couple), depending on living arrangement.
    • Supplementary accommodation assistance (for continuing care homes) rises; the maximum annual amount increases to about $19,934.
  • The monthly “disposable income” used in the continuing care calculation rises to $365 (was $322).
  • The annual cap for special needs items rises to $5,756.
  • After 2025, annual increases use the Alberta escalator (up to 2% a year).

• Families with low to moderate incomes

  • Alberta Child and Family Benefit amounts increase in 2025, with some changes taking effect July 1, 2025.
  • Income thresholds that reduce the benefit also move up, which can help some families keep more of the benefit.

• Electric vehicle owners

  • You will pay a new $200 annual EV tax when you register the vehicle (pro‑rated if you register for part of the year). Refunds are available if you cancel the registration early.
  • Exemptions or rebates exist for the federal government, diplomats, foreign armed forces, some foreign governments, and eligible First Nations individuals and bands with on‑reserve addresses.
  • Penalties apply if you do not pay. The start date will be set later.

• Homebuyers using Islamic‑compliant financing

  • If your lender briefly takes title as part of a no‑interest mortgage agreement and then transfers it to you, that transfer can be exempt from the land title levy, reducing closing costs for this type of product.

• Credit union and ATB customers

  • Credit unions and ATB can use lending subsidiaries. Credit union capital rules will be set by the Credit Union Deposit Guarantee Corporation (approved by the Minister), and new safety and soundness standards can be issued.
  • “Loan” now clearly covers payments beyond interest (like certain fees or profit‑sharing), which affects arrears and collection rules.

• Timing

  • Most tax and benefit increases start Jan 1, 2025. Some child benefit changes start July 1, 2025.
  • The EV tax, land titles changes, and the ATB/credit union updates take effect on dates set by the government (not yet specified).

Expenses#

No publicly available information.

• Likely lowers provincial income tax revenue in 2025 because brackets and credits increase.
• Increases spending on AISH, Income Support, and the Seniors Benefit beginning in 2025.
• Creates new revenue from the $200 EV tax once it starts.
• Likely small revenue loss from the land title levy exemption for certain no‑interest mortgage transfers.
• Administrative costs to update systems for the new Alberta escalator and program changes.

Proponents' View#

• Helps with affordability now by raising benefit rates and cutting personal income taxes for many people.
• Sets predictable, smaller annual increases (up to 2%) so budgets are more stable and easier to plan.
• Ensures EV owners also contribute to road and transportation costs, similar to fuel taxes on gas and diesel vehicles.
• Removes extra land title costs for Islamic‑compliant mortgages, improving access to culturally appropriate home financing.
• Modernizes credit union and ATB rules to support lending while strengthening oversight and capital standards.

Opponents' View#

• Capping yearly increases at 2% may not keep up with higher inflation, reducing the buying power of benefits and shrinking future tax indexing.
• The EV tax could discourage cleaner vehicles and feels like double payment to some drivers (they already pay electricity and fees).
• Lower tax revenue may limit funding for services, while benefit increases raise program costs.
• Allowing standards for credit unions outside formal regulations may reduce transparency and legislative oversight.
• Some may see the land title levy exemption as favouring certain financial products and adding complexity.