The Mega Deduction in Alberta

Alberta corporations pay a combined 11.0% on small business income (federal 9% + provincial 2%) and 23.0% at the general rate (15% + 8%). Every dollar deducted in year one under the Mega Deduction reduces tax by that percentage.

Alberta administers its own corporate income tax and is not part of the federal collection agreement, so its rates are not in the Canada Revenue Agency table. Alberta's 8% general rate is the lowest in Canada. Confirm current rates before relying on these figures.

Tax reduction on a $100,000 purchase, by asset class

Does Alberta follow the federal Mega Deduction?

Expected to follow Alberta administers its own corporate income tax and files on a separate AT1 return, outside the federal collection agreement. It matched the earlier federal CCA enhancements, and its published guidance on federal CCA proposals says it adopts them automatically where its rules are harmonized. Alberta has not published anything about the Mega Deduction itself, so treat Alberta as expected to follow, not confirmed. A corporation may also claim a different amount of discretionary CCA for Alberta than federally, and Alberta keeps its own pool to track the difference.

Who collects Alberta corporate tax?

Alberta Treasury Board and Finance administers Alberta corporate income tax under the Alberta Corporate Tax Act. It is one of two jurisdictions, with Quebec, outside the federal collection agreement.

Has Alberta said anything about this measure?

No Alberta statement on this measure was found. Alberta's 2021 special notice on federal CCA proposals, linked below, says Alberta adopts federal CCA changes automatically; that notice predates the Mega Deduction.

Sole proprietors and partners

Alberta personal income tax is administered by the CRA and uses the federal income base, so the same result applies to sole proprietors and partners. Alberta's separate corporate return does not apply to them. The federal draft limits a non-corporate taxpayer to the income from the business or property source the asset is used in, so the deduction cannot create or deepen a loss.

Sources: Alberta corporate income tax · Alberta special notice on federal CCA changes (2021) · Alberta personal income tax. The federal measure: Department of Finance announcement · Draft legislative proposals. The Mega Deduction is draft legislation announced 15 September 2026; none of this applies until it is enacted.

What sales tax does to your deductible cost in Alberta

Alberta charges GST 5%, no provincial sales tax on most equipment purchases. A business registered for GST/HST recovers that tax through input tax credits, so it is not part of the capital cost and not part of what you deduct. Enter the price before tax in the calculator. Alberta levies no provincial sales tax, so there is no non-recoverable tax to add to the capital cost.

If you are not registered for GST/HST, the tax you cannot recover does form part of the capital cost. Most businesses buying equipment at this level are registered.

All asset types in Alberta

• Computer equipment
• Software
• Manufacturing and processing equipment
• General equipment, tools and furniture
• Commercial vehicles (vans, pickups, work trucks)
• Heavy trucks and tractors
• Zero-emission vehicles
• Patents, licences and acquired IP
• Clean energy and energy conservation equipment
• Data network infrastructure
• Farm machinery
• Construction and contractor equipment
• Medical and dental equipment
• Restaurant and hospitality equipment
• Media production equipment
• Aircraft
• Buildings and additions
• Goodwill, franchises and licences (Class 14.1)
• Passenger vehicles (Class 10.1)
• Qualified liquefaction equipment