Alberta Unveils New Fiscal Measures Targeting Rental Vehicles and Data Infrastructure
The Alberta government has announced significant new taxation measures in its 2026 budget, including a dedicated tax on vehicle rentals and a levy targeting large-scale data centers operating within the province. These initiatives are designed to create stable revenue streams, particularly from visitors and the growing technology sector.
Vehicle Rental Tax to Generate Revenue from Tourists
Effective January 1, 2027, Alberta will implement a six per cent tax on the rental of passenger vehicles. This tax is explicitly framed as a mechanism to generate revenue from visitors and tourists. The levy applies to vehicles with eight seats or fewer and is separate from the federal Goods and Services Tax (GST).
The budget documentation clarifies several exemptions:
- Vehicles under long-term leases are excluded.
- Non-passenger vehicles, such as cargo vans and moving trucks, will not be subject to the tax.
- Additional services like rental insurance or gasoline costs are also exempt from this new charge.
The provincial government projects this tax will bring in approximately $36 million in additional revenue during the 2027-28 fiscal year. More specific legislative details are expected to be provided when the enabling legislation is introduced later in the fall of 2026.
Data Centre Levy Aims to Manage Power Grid Impact
In a parallel move to capitalize on technological growth, Alberta is introducing a levy on large-scale data centers. The government states this policy is part of an effort to make Alberta a "prime destination" for both international and local data infrastructure, while also managing the strain on the provincial power grid.
The levy structure is designed with incentives for energy efficiency:
- Rates can be as high as two per cent of a data center's operational cost.
- Lower rates are available to facilities that minimize their impact on Alberta's power grid by providing their own power solutions.
- Data centers that do not draw power from the existing grid could be eligible for a zero per cent levy rate.
The province intends to amend legislation to ensure the tax rate is calculated based on actual power consumption. This Data Centre Levy is scheduled to come into effect in the 2028-29 fiscal year and is projected to generate $102 million in revenue.
The budget notes that the higher power demand from new data centers is expected to boost domestic demand for natural gas. Overall electricity demand in Alberta is projected to double by 2050, underscoring the need for such managed growth policies.
Substantial Data Center Investments Underway
This levy comes amid significant investment in the sector. A $750 million data center in Rocky View County is scheduled for completion this year. Furthermore, as reported in December, two European businesses have committed to building four new data centers in Alberta for more than $1.2 billion. The first is planned for the town of Olds in central Alberta next year, with another in Bonnyville, northeast of Edmonton, slated for 2027.
Tourism Levy Also Sees an Increase
In addition to the new taxes, the budget includes an increase to the existing tourism levy. Starting in April 2026, the levy applied to the price of accommodations at hotels, motels, and inns will rise from four per cent to six per cent.
This increase is expected to generate an additional $66 million in revenue over the 2026-27 fiscal year. In total, the tourism levy is projected to pull in $200 million in 2026-27, with expected growth to $214 million by 2028-29.
Collectively, these measures on rental vehicles, data centers, and tourism accommodations represent a multifaceted approach by the Alberta government to bolster provincial revenues from both visitor-based and technology-driven economic activities.
