For 2026, Alberta is the lower-cost province to run a business on almost every tax dimension. Alberta has no PST and no provincial payroll or employer health tax, its combined general corporate rate is 23% and its minimum wage is $15.00. British Columbia charges 7% PST, an Employer Health Tax on payrolls over $1 million, a 27% combined general corporate rate, and a $18.25 minimum wage (from June 1, 2026). The federal layer — CPP, EI, GST, the federal corporate rate — is identical in both provinces, so the real differences are provincial.
This guide puts the two provinces side by side so founders and owner-managers can quantify the gap. All figures are 2026 statutory amounts.
The headline comparison table (2026)
| Tax / cost item (2026) | Alberta | British Columbia |
|---|---|---|
| Provincial sales tax (PST) | None | 7% PST (12% with GST) |
| GST (federal) | 5% | 5% |
| Provincial payroll / health tax | None | Employer Health Tax (see below) |
| Corporate — small business | 2% (combined 11%) | 2% (combined 11%) |
| Corporate — general | 8% (combined 23%) | 12% (combined 27%) |
| General minimum wage | $15.00/hr | $18.25/hr (from June 1, 2026) |
| CPP / CPP2 / EI | Federal — identical | Federal — identical |
| Provincial corporate return | Alberta AT1 (separate filing) | Filed with the federal T2 |
The two clearest structural differences — no PST and no employer health tax — are what people mean by the "Alberta Advantage." Below, each row in detail.
Sales tax: Alberta's no-PST advantage
Alberta is the only province with no provincial sales tax. An Alberta business charges customers only the 5% federal GST and recovers GST it pays on inputs via input tax credits.
British Columbia layers 7% PST on most goods and many services, for a 12% combined sales tax at the till. Critically, BC PST is largely not recoverable the way GST is — businesses often pay PST on equipment, software and supplies as a true cost with no credit, which quietly raises the price of doing business and complicates pricing. You can model both with our sales tax calculator.
Corporate income tax: 23% vs 27% on general income
Both provinces apply the same federal corporate rates: 9% on the first $500,000 of active business income for a CCPC (the small-business deduction) and 15% on general income. The provinces differ on their own rate:
| Income type (2026) | Alberta combined | BC combined |
|---|---|---|
| Small-business (first $500,000) | 11% (9% + 2%) | 11% (9% + 2%) |
| General active business income | 23% (15% + 8%) | 27% (15% + 12%) |
On small-business income the two provinces are a tie at 11%. The divergence is on general income above the $500,000 small-business limit, where Alberta's 8% provincial rate beats BC's 12% — a 4-percentage-point advantage that matters once a company outgrows the SBD. Run your own numbers with the corporate tax calculator. One filing nuance: Alberta administers its own corporate tax and requires a separate Alberta AT1 return in addition to the federal T2, whereas BC's provincial tax is collected with the T2.
Payroll tax: BC's Employer Health Tax vs nothing in Alberta
This is where a growing BC employer feels the difference most. Alberta has no employer health tax and no provincial payroll tax — your only statutory add-ons to wages are the federal CPP, CPP2 and EI employer shares.
British Columbia charges an Employer Health Tax (EHT) on BC remuneration:
| BC payroll (2026) | EHT treatment |
|---|---|
| $1,000,000 or less | Exempt — no EHT |
| $1,000,000.01 – $1,500,000 | 5.85% on the amount over $1,000,000 (notch) |
| Over $1,500,000 | 1.95% on the entire payroll |
So a BC company with $2,000,000 in payroll owes $39,000 of EHT a year (1.95% of the whole). An Alberta company with the identical payroll owes $0. For full BC EHT mechanics and worked examples, BC employers should review the provincial rules in detail; Alberta employers can skip it entirely.
Federal layer (identical in both provinces)
CPP, CPP2, EI and GST do not vary by province. For 2026:
- CPP 5.95% to a $74,600 YMPE; CPP2 4% on earnings from $74,600 to $85,000.
- EI 1.63% (employee) to $68,900; employers pay 1.4× that.
- GST 5%.
Because these are constant, they cancel out in any AB-vs-BC comparison — the decision turns entirely on PST, EHT, the general corporate rate and minimum wage.
Minimum wage and labour cost
Labour cost runs the other way. BC's general minimum wage rose to $18.25/hour on June 1, 2026 and is indexed to inflation each year. Alberta's general minimum wage is $15.00/hour and has been frozen since 2018. For a full-time worker (about 2,080 hours/year) that is roughly a $6,760 higher annual wage cost per minimum-wage employee in BC. For labour-heavy businesses, this partially offsets BC's other tax disadvantages.
Putting it together
For a typical owner-managed company, Alberta wins on sales tax (no PST), payroll tax (no EHT), and general corporate rate (23% vs 27%). BC's main offsetting cost is its higher minimum wage. The small-business corporate rate is a tie at 11%, and the federal deductions are identical. As a business scales past the $500,000 small-business limit or past the $1 million payroll EHT threshold, the Alberta advantage widens.
How RN Canada helps
RN Canada operates in both provinces — head office in Edmonton, Alberta, second office in Vancouver, British Columbia — so we advise founders on exactly this trade-off: where to incorporate, how PST and EHT change your unit economics, and how to structure payroll and corporate tax across AB and BC. Led by Ozgur Duymaz, Ph.D., CPA (Canada), ACCA (UK), CMA (US), we model the all-in cost difference for your specific revenue, payroll and margin profile before you commit. Our part-time / fractional CFO service is built for owner-managers weighing province-level decisions.
For the province-specific deep dives, see the Alberta corporate tax guide and the BC corporate tax guide.
Frequently asked questions
On tax and statutory costs, Alberta is generally cheaper. As of the 2026 tax year Alberta has no PST and no provincial payroll or employer health tax, while British Columbia charges 7% PST and an Employer Health Tax on payrolls over $1 million. Combined general corporate tax is 23% in Alberta versus 27% in BC. BC's higher minimum wage ($18.25) also raises labour costs.
As of 2026, small-business income (first $500,000 for a CCPC) is taxed at a combined 11% in both Alberta and BC (9% federal + 2% provincial). On general active business income the combined rate is 23% in Alberta (15% + 8%) and 27% in British Columbia (15% + 12%) — a 4-point Alberta advantage on income above the small-business limit.
No. Alberta has no provincial sales tax. Alberta businesses charge and remit only the 5% federal GST. In British Columbia, most goods and many services carry 7% PST on top of 5% GST, for a 12% combined sales tax. BC PST is generally not recoverable by businesses the way GST input tax credits are, making it a real cost in supply chains.
British Columbia's Employer Health Tax (EHT) is a payroll tax: payrolls of $1 million or less are exempt, $1M-$1.5M pay a 5.85% notch rate on the amount over $1M, and payrolls above $1.5 million pay 1.95% on the entire payroll. Alberta has no employer health tax and no provincial payroll tax at all, so the EHT is a pure Alberta cost advantage as a business grows.
British Columbia's minimum wage is higher. As of June 1, 2026 BC's general minimum wage is $18.25 per hour and is indexed to inflation annually. Alberta's general minimum wage is $15.00 per hour and has been unchanged since 2018. For a full-time minimum-wage worker that gap is over $6,000 per year per employee in higher BC labour cost.
No. CPP, CPP2 and EI are federal programs with identical rates and ceilings in Alberta and British Columbia. For 2026 that means CPP at 5.95% to a $74,600 ceiling, CPP2 at 4% up to $85,000, and EI at 1.63% (employee) to $68,900, with employers paying 1.4x EI. The provinces differ only on what they add on top — PST, EHT, minimum wage and the general corporate rate.