Alberta Budget 2025: Funding and Opportunities

Alberta’s Budget 2025, titled “Meeting the Challenge,” addresses economic uncertainties and revenue volatility stemming from international market instability, fluctuating oil prices, and a rapidly growing population.  

The budget outlines strategic initiatives to support economic growth, infrastructure development, and public services, while forecasting a potential deficit because of external factors. This blog thus aims to highlight major changes announced in the Alberta Budget 2025, including funding and other financial opportunities. 

 

Support for Businesses and Industry Diversification 

Recognizing the importance of a robust local economy, the 2025 budget introduced several government funding initiatives to support small businesses and diversify industries.  

Small Business Tax Relief 

Alberta’s small business tax rate remains the lowest in Canada, with continued government support through grants, loans, and investment incentives. The budget includes:  

• A new tax credit for startups focusing on technology and renewable energy sectors 
• Expansion of the Innovation Employment Grant, which supports companies investing in research and development 

Northern and Regional Economic Development (NRED) Program 

The budget allocates up to $3 million for 2024–2025 to support economic growth in northern and regional communities. This government funding aims to assist local businesses, encourage entrepreneurship, and improve access to essential services in remote areas.  

Green Economy and Renewable Energy Investments 

With a growing emphasis on sustainability, Alberta is investing in clean energy solutions and green technology advancements. The budget includes:  

• $500 million to support hydrogen energy projects and carbon capture initiatives 
• $150 million for small-and-medium-sized businesses adopting green technologies  
• Expansion of incentives for homeowners and businesses to invest in solar energy and energy-efficient upgrades 

Industry Diversification Efforts 

The province is actively working to reduce its economic dependence on oil and gas. New funding initiatives support:  

• Agriculture technology and food production innovation to enhance Alberta’s role in global food supply chains 
• Development of offshore wind projects and critical minerals exploration to tap into new economic opportunities 
• A Trade Action Plan to expand Alberta’s presence in international markets and mitigate risks associated with global trade volatility 

These initiatives demonstrate the government’s commitment to fostering economic resilience and positioning Alberta as a leader in emerging industries. 

Major Tax Reforms and Affordability Measures 

To alleviate the financial burden on Albertans, the 2025 budget introduced a new personal income tax bracket of 8% on the first $60,000 of income. This measure aims to enhance affordability for residents, ensuring that more income remains in the hands of taxpayers.  

The government has also committed to indexing tax brackets to inflation to protect residents from “bracket creep”—a phenomenon where inflation pushes taxpayers into higher tax brackets, leading to increased tax burdens without real income growth. This initiative aims to help Albertans maintain purchasing power amid rising living costs.  

Additionally, Alberta’s fuel tax relief program, initially introduced during economic downturns, will continue in 2025. The government will assess fuel prices quarterly and adjust the fuel tax accordingly, reducing costs for individuals and businesses that rely on transportation.  

These measures highlight the government’s commitment to financial relief, particularly in light of increasing costs of living and economic uncertainty. 

Investments in Infrastructure and Economic Growth 

The 2025 budget allocates $26.1 billion over the next three years to infrastructure projects, an increase of $1.1 billion from the previous budget. These investments are designed to stimulate economic activity, create jobs, and improve essential services.  

Healthcare Facilities 

The government has pledged significant funding for the construction and expansion of hospitals, with an emphasis on improving accessibility and reducing wait times. Major projects include:  

• The Calgary Cancer Centre, expected to enhance oncology services across the province 
• Expansion of emergency departments and intensive care units in key urban and rural hospitals 

Education Infrastructure 

To support a rapidly growing student population, the government has earmarked funds for the construction and modernization of schools across Alberta. More than $1.5 billion will go towards school infrastructure, including the creation of new learning spaces and the renovation of aging facilities to meet modern education standards.  

Transportation and Public Transit 

Investments in Alberta’s highway network and transit systems continue to be a priority. More than $3 billion will be allocated to road improvements, highway expansions, and the modernization of public transit services in major cities such as Calgary and Edmonton. New projects include:  

• Expansion of Highway 2, Alberta’s busiest corridor, to reduce congestion and improve safety 
• LRT expansions in Edmonton and Calgary, aimed at enhancing public transportation networks and reducing reliance on personal vehicles 

These investments reflect the government’s focus on long-term economic growth by ensuring that businesses and individuals have access to high-quality infrastructure. 

Building a Stronger Future for Alberta 

In response to potential external economic challenges, such as proposed U.S. tariffs on Canadian goods, Alberta projects a budget deficit of $5.2 billion for the 2025–26 fiscal year if these tariffs proceed. This projection underscores the province’s vulnerability to international trade policies and the importance of strategic fiscal planning. 

“We’re going to have to have hard conversations as Albertans about what we expect the government to fund, the services we want to see. We made the difficult decision to run a deficit so that we can direct and target our spending to the top priorities of Albertans.” 
– Nate Horner, Minister of Finance