The Canadian Taxpayers Federation says Albertans should brace for a mixed bag of tax changes in 2026, with federal income tax relief overshadowed by higher payroll deductions and a sharp jump in Alberta’s industrial carbon tax.Kris Sims, the CTF’s Alberta director, said the coming year will leave many residents feeling squeezed despite a federal cut to the lowest income tax bracket. “There’s good news and bad news for Alberta taxpayers in 2026,” she said, noting that payroll taxes are rising while Ottawa moves ahead with major carbon tax changes.Prime Minister Mark Carney recently travelled to Alberta to confirm the province’s industrial carbon tax will be raised “six times higher,” with the new rate taking effect Jan. 1.Payroll taxes The federal government is increasing maximum Canada Pension Plan and Employment Insurance contributions in 2026. The CTF says the higher deductions will cost workers up to an extra $262 next year. Workers earning $85,000 or more will pay $5,770 in federal payroll taxes, while employers will be required to spend $6,219.Income tax Ottawa is reducing the lowest federal income tax rate from 15% to 14%, a change the Parliamentary Budget Officer estimates will save the average taxpayer $190 in 2026..Carbon taxes The federal consumer carbon tax was cancelled on April 1, 2025, but carbon costs remain through the industrial carbon tax and fuel regulations. The industrial carbon tax will rise to $110 per tonne in 2026. Alberta Premier Danielle Smith signed a memorandum of understanding with Carney to implement the provincial version of the tax, though the government has not released details on how much it will cost businesses. A Leger poll cited by the CTF found 70% of Canadians believe companies pass most or some of the cost of carbon taxes on to consumers.Alcohol taxes Federal alcohol taxes are expected to rise by 2% on April 1, 2026, adding an estimated $41 million in costs for taxpayers in 2026–27. The alcohol escalator tax—introduced in 2017—automatically increases excise taxes on beer, wine and spirits each year without a parliamentary vote. Industry estimates suggest it has cost taxpayers about $1.6 billion since its introduction.CTF federal director Franco Terrazzano said the government should focus on reducing spending rather than increasing taxes. “Canadians pay too much tax because the government wastes too much money,” he said, arguing that taxpayers need meaningful relief and that all carbon taxes should be scrapped.
