The Canadian Taxpayers Federation has published its annual New Year’s Tax Changes report highlighting the major tax changes in 2026.

“There’s good news and bad news for Alberta taxpayers in 2026,” said Kris Sims, CTF Alberta Director. “The federal government is cutting income taxes, but it’s also hiking payroll taxes.

“Prime Minister Mark Carney flew out to Alberta and announced our provincial industrial carbon tax is going to be ‘six times' higher.”

The industrial carbon tax rate will be hiked on Jan. 1.

Payroll taxes: The federal government is raising the maximum mandatory Canada Pension Plan and Employment Insurance contributions in 2026. These payroll tax increases will cost a worker up to an additional $262 next year.

For workers making $85,000 or more, federal payroll taxes (CPP and EI tax) will cost $5,770 in 2026. Their employers will also be forced to pay $6,219.

Income tax: The federal government cut the lowest income tax rate from 15 to 14 per cent. This will save the average taxpayer $190 in 2026, according to the Parliamentary Budget Officer.

Carbon taxes: The government cancelled its consumer carbon tax effective April 1, 2025. However, the government still charges carbon taxes through its industrial carbon tax and a hidden carbon tax embedded in fuel regulations.

The industrial carbon tax will increase to $110 per tonne in 2026. Premier Danielle Smith signed a memorandum of understanding with Carney to impose an industrial carbon tax in Alberta. While the government hasn’t provided further details on how much the industrial carbon tax will cost, 70 per cent of Canadians believe businesses pass on most or some of the cost of the tax to consumers, according to a Leger poll.

Alcohol taxes: Federal alcohol taxes are expected to increase by two per cent on April 1, 2026. This alcohol tax hike will cost taxpayers about $41 million in 2026-27, according to industry estimates.

First passed in the 2017 federal budget, the alcohol escalator tax automatically increases excise taxes on beer, wine and spirits every year without a vote in Parliament. Since being imposed, the alcohol escalator tax has cost taxpayers about $1.6 billion, according to industry estimates.

“Canadians pay too much tax because the government wastes too much money,” said Franco Terrazzano, CTF Federal Director. “Canadians are overtaxed and need serious tax cuts to help make life more affordable and our economy more competitive.

“Carney needs to significantly cut spending, provide major tax relief and scrap all carbon taxes.”