Calgary to San Francisco: Tech, the Energy Pivot, and a Corridor Where the Rate Goes Up

The Bay Area's climate-tech and energy-transition firms recruit Calgary's engineers, and its software companies recruit Calgary's developers and data scientists. The tax picture is unusual for an Alberta exit: the income tax rate goes up. Alberta's combined top rate of about 48% becomes about 50.3% in California, with capital gains taxed as ordinary income and the RRSP taxed annually.

Key takeaways

• Alberta's roughly 48% top rate sets the departure tax. On a $300,000 unrealized gain, about $72,000.
• California's combined top rate is about 50.3%; capital gains at ordinary rates.
• California does not follow the treaty on RRSPs: the account's annual earnings are taxable on the California return.
• Alberta's 5% GST becomes 8.625% sales tax in San Francisco, 9.125% or more on the Peninsula.
• Proposition 13 property tax at about 1.1% of purchase price. AHCIP ends on permanent departure.

The Alberta departure

Departure tax applies to non-registered investments, private company shares, crypto, and foreign property at fair market value on the departure date. Alberta real estate, RRSPs, TFSAs, and pensions are excluded. Report on Form T1243, list holdings on Form T1161 if the total exceeds $25,000, and post security under Form T1244 for illiquid assets. A Calgary corporation is deemed sold, loses CCPC status, and becomes a US controlled foreign corporation after the move; wind it up before you go. AHCIP ends on permanent departure.

San Francisco's side

Graduated California state rates to 12.3% plus a 1% surcharge above $1 million, for a combined federal and state top rate near 50.3%; capital gains taxed as ordinary income; 8.625% sales tax in San Francisco, 9.125% to 9.375% on the Peninsula and in the South Bay; Proposition 13 property tax at about 1.1% of purchase price with a 2% annual cap; no estate tax; aggressive residency audits; community property.

The RRSP in California

Federally deferred under Article XVIII of the treaty. California does not conform: the Franchise Tax Board taxes the interest, dividends, and realized gains inside the account each year. Before departure, restructure toward growth assets that produce little annual income, draw the account down while still a Canadian resident, or accept the annual inclusion and track California basis.

RSUs and California sourcing

RSUs granted in Canada that vest after the move are split between Canada and the US by working days over the vesting period, and California sources its share by California working days as well. Both payrolls may withhold on the full amount. Because California taxes the gain on a later sale at ordinary rates, the decision to hold or sell vested shares is a California decision as much as a federal one.

Who makes this move

Calgary energy engineers to the Bay Area's climate-tech and energy-transition firms, Alberta software developers and data scientists to San Francisco's technology companies, and Calgary finance professionals to the Bay Area's venture and asset management firms.

Worked example

A Calgary engineer moves to San Jose on June 30 with $250,000 of unrealized gain in a non-registered account, $500,000 in an RRSP producing about $15,000 a year of income, RSUs vesting after the move, and a professional corporation wound up before departure.

• Departure tax. $250,000 gain, $125,000 taxable, at about 48%: roughly $60,000. Cheaper than California's ordinary-rate treatment later.
• RRSP. Federally deferred. California taxes the $15,000 annual income at rates up to 13.3%; restructuring toward growth equities reduces it.
• RSUs. Split by working days between Canada, US federal, and California.
• Corporation. Capital dividend account paid and wound up as an Alberta resident.
• San Jose. Combined top rate about 50.3%, a slight increase from Alberta. GST 5% becomes sales tax 9.375%.

Official sources

"When you leave Canada, you are considered to have sold certain types of property (even if you have not sold them) at their fair market value (FMV) and to have immediately reacquired them for the same amount. This is called a deemed disposition and you may have to report a capital gain (also known as departure tax)." — Canada Revenue Agency, Leaving Canada (emigrants), https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/individuals-leaving-entering-canada-non-residents/leaving-canada-emigrants.html

California does not conform to federal tax treaty provisions; income excluded from federal income under a treaty may be taxable by California. — California Franchise Tax Board, Publication 1031, Guidelines for Determining Resident Status, https://www.ftb.ca.gov/forms/2025/2025-1031-publication.pdf

Alberta's top personal income tax bracket: "15%" on "$362,961.01 and up" (2025). — Government of Alberta, Personal income tax, https://www.alberta.ca/personal-income-tax

Practitioner note

Alberta-to-Bay Area is the file where we most often recommend paying more Canadian tax on purpose: realizing gains and drawing down the RRSP in Alberta rather than carrying them into a state that taxes gains at ordinary rates and RRSP earnings annually.

See also: Weighing Florida instead? See the Canada-to-Florida guide, or the same city's Calgary to Miami guide.

Next step

Fairlight prepares the Alberta departure return, the RRSP restructuring, and the first-year federal and California returns for Bay Area clients. See cross-border pricing or book a call.