More help is on the way for Albertans struggling to stay afloat as its government announced legislation to combat inflation. On Wednesday, the United Conservative Party tabled Bill 2, the Inflation Relief Statutes Amendment Act, to provide $2.8 billion in relief for families, seniors and vulnerable Albertans over the next three years.
The Alberta government unveiled the inflation act's relief measures on Wednesday, which include targeted relief payments, price protections on energy and utilities and reindexing tax brackets and programs for low-income and vulnerable Albertans.
“As a government, we're privileged to offer this kind of support which is meaningful and material to Albertans,” said Finance Minister Travis Toews. “We can only do this because we've got a growing economy, which has resulted in increased revenues for Alberta, and we've brought responsible fiscal management to the province,” added Toews.
The Alberta government lowered its budget surplus due to these tax breaks and social program enhancements. The provincial government forecasted a budget surplus of $12.3 billion in the current fiscal year, down from a previous forecast of $13.2 billion.
“This package has been structured to give Albertans six months of relief so that we can evaluate the cost of living and inflation over that period so that we can tailor our response to what Albertans need at that time,” said Affordability and Utilities Minister Matt Jones.
Notably, the province unveiled its plans to amend the Fuel Tax Act to suspend the 13 cents-per-litre carbon tax on gasoline and diesel from January 1 to June 30, 2023.
In July, Alberta will revert to three-month reviews of subsequent suspensions of the fuel tax, with more relief possible should oil prices surpass US$80 per barrel for West Texas Intermediate (WTI). The UCP will outline details on price thresholds and reduction calculations in the regulation.
The act also provides temporary price protections on electricity under the Regulated Rate Option (RRO) if passed, including consumers served by Rural Electrification Associations and municipalities not regulated by the Alberta Utilities Commission. It provides interest-free government loans to providers paid back through future RRO rates from April 1, 2023, until December 31, 2024.
“This will provide price protection for consumers when the RRO rates are expected to be the highest this winter,” reads a government release.
The changes also include a three-month price ceiling of 13.5 cents/kWh between January and March and $200 in electricity rebates with $75 each for January and February and $25 in March and April. The Natural Gas Price Protection Program concludes at the end of March.
Concerning the Alberta Personal Income Tax Act, amendments to the legislation will resume the indexation of non-refundable tax credits and tax bracket thresholds in the personal income tax system for 2022 and subsequent tax years.
Personal income tax brackets for all Albertans are also being reindexed, increasing from $19,369 to $19,814 (2.3%) for 2022 and by upwards of 6% next year, bringing the basic personal allowable amount to $21,003. Approximately 80,000 to 95,000 Albertans will pay no provincial personal income tax by 2023.
If passed, Bill 2 will also index the Alberta Child and Family Benefit program by 6% effective January 1, with families receiving up to $120 for one child, $198 for two children, and $260 and $307 for those with three and four children, respectively.
As part of Wednesday's announcement, the province pledged to provide seniors and families with dependent minors with six monthly payments of $100 between January 1 and June 30. Households exceeding $180,000 in annual income will not receive the payments, said Jones, who adds to expect them “early next year.”
Benefits for those on Assured Income for the Severely Handicapped (AISH), Persons with Developmental Disabilities (PDD), and Alberta income support are also slated to be reindexed to account for inflation, with benefits set to increase by 6%. AISH and Income Support clients will see this increase on their December 22 payment for January, with seniors' benefits increasing on the January 25 payment.
Seniors, Community and Social Services Minister Jeremy Nixon lauded the affordability measures outlined in the bill will provide a “huge difference” for vulnerable Albertans. “Low-income Albertans are feeling the impact of increased costs each month,” he said. “Albertans with disabilities, seniors, and others that rely on fixed incomes need support to get through these difficult times.”
Seniors and vulnerable Albertans already on core government support programs would automatically receive relief payments. Those not included in the programs retroactively must apply through a government portal.
Jones said the province would finalize all legislative and regulatory amendments required to deliver the reserve package by January. Many changes are included in the bill, which passed its first reading Wednesday.
“We intend to have most of the support rolling out in January. We will pass the regulations as soon as possible to get this relief to Albertans.”