What's in it for Calgary? Alberta government drops new budget

CBC

28-02-2025

New funding for some major projects in Calgary was announced on Thursday as Alberta's UCP government released its 2025 budget.
This fiscal year, the province is cutting a $30 million cheque to redevelop the Southern Alberta Institute of Technology's campus centre, $12 million to advance planning and regulatory approval processes to mitigate flood and drought hazards in the Bow River basin, and $16 million in new funding over three years for the Contemporary Calgary transformation project at the former Centennial Planetarium.
There is also $61 million over three years for the new Central Drug Production and Distribution Centre, in order to support timely access and preparation of prescription medications.
Tabled by Finance Minister Nate Horner on Thursday afternoon, the Alberta government's 2025-26 fiscal plan includes other commitments for the city that had already been announced, such as money to extend the Blue Line LRT in the northeast, and various investments in Calgary health-care facilities.
"It's a budget that's stable," Calgary Mayor Jyoti Gondek told reporters on Thursday.
Yet Gondek also said there are still many things the city doesn't know in terms of specifics of the budget and its impact on Calgary.
"At this point, I'm choosing to remain cautiously optimistic. I will say that there was a strong theme, and that was the theme of growth and its challenges," she said.
"It's interesting that the … budget speech was so focused on growth and challenges and opportunity within the province, yet there's not really much that addresses the growth that Calgary has seen in the past couple of years, with the fastest growing city in this nation. And there really wasn't a nod to that."
One of the budget's most notable feature's is the fulfilment of the UCP's long-promised lower, eight per cent personal tax rate on income under $60,000, which was a significant part of Premier Danielle Smith's campaign in the 2023 election.
The tax cut is expected to cost the province $1.2 billion in the 2025-26 fiscal year.
However, while the province is offering a lower tax bracket, education property taxes will go up over the next two years in order to cover one-third of the education budget.
Property tax jump hits Calgary
The education property tax is levied alongside municipal property taxes based on assessed property values. The province collects this money by requisitioning it from municipalities, who then must collect it from home, business and farm owners alongside their own municipal property taxes.
The province plans to increase its total requisition to $3.1 billion for this fiscal year, up from $2.7 billion last fiscal year, and the bulk of that near $400 million increase will come from Calgary.
The annual requisition from Calgary is expected to increase to $1.037 billion, up 17.6 per cent from the previous year.
Further, this year's provincial budget notes the share of education operating costs funded by the education property tax will increase to 31.6 per cent, "following historic lows of 28.5 per cent in 2023-24 and 29.5 per cent in 2024-25."
For the average Calgary homeowner, this property tax hike means an additional $239 per year — based on the province's estimates according to median home values — compared to just $92 in Edmonton.
"And it'll go up again next year," said Horner in an embargoed press conference earlier Thursday.
"We're having to fund education in a major way."
Notably, it means property taxes for Calgarians will jump the most this year — but exactly by how much seems unclear, as the province and city were reporting different numbers as of Thursday evening.
Calgary's mayor told reporters at City Hall that the city's calculations differ.
"We now understand that the portion that the government is going to take from Calgary property taxes is going to be up at around six per cent," said Gondek.
"So that means that you're going to see probably an additional $9 or so on your property tax bill to help cover this education tax that the provincial government is seeking that's above and beyond what has already been budgeted by the city."
CBC News has reached out to the Ministry of Treasury Board and Finance for clarification, but did not receive a response by deadline.
Low-income transit pass funding maintained
Budget 2025 also maintains its funding for Calgary's low-income transit pass that was subject to some turmoil last year, after the province made the decision to cut the funding, only to restore it just 24 hours later.
"We were concerned that that was going to disappear in this budget, and it's such an economic driver for our city and so important for Calgarians who live in poverty to get around," said Meaghon Reid, executive director with Vibrant Communities Calgary, a poverty reduction advocacy organization.
Reid says the organization is pleased to see that funding commitment maintained in this new budget alongside the new lower tax bracket, as she believes these measures "are going to help folks from an affordability perspective as well, particularly lower income earners."
She added the organization is pleased to see budget investments in Calgary's Blue Line LRT, which is also part of provincial funding that was announced previously.
And while Calgary's mayor says she's relieved to see that the low-income transit pass will be funded to the same level it was last year, she also maintains the province should be responsible for funding that initiative as a whole.
"I would argue that low income and support for people that are low income is the responsibility of the provincial government, yet it is your local government that is covering the lion's share," said Gondek.
The mayor added the low-income transit pass is in greater demand than ever before, and that while she's grateful provincial funding has remained static, she's concerned about the position this puts city council in as Calgary continues to grow.
"We know that people are struggling with affordability. We also know that about 275 people a day are moving to our city and a proportion of those folks will need to access the low-income transit pass," said Gondek.
"If [provincial funding] doesn't keep up with inflation and population growth, it is underfunding."
Worst-case tariff scenario
Alberta is forecasting it will end the next fiscal year with a $5.2 billion deficit, but that number could climb to $8.7 billion under a worst-case tariff scenario.
U.S. President Donald Trump's most recent threat is that these tariffs — which are 10 per cent for Canadian energy and 25 per cent for all other exports — will be coming on Tuesday.
What's more, this is the first deficit budget for an Alberta government since the 2020-21 fiscal year, presented during the early days of the pandemic. Alberta's debt is forecasted to reach $83 billion by the end of the 2025-26 fiscal year.
Deborah Yedlin, president and CEO of the Calgary Chamber of Commerce, told CBC News on Thursday that she believes this budget "struck the best balance that it could" in light of tariff threats and inflationary pressures.
"We have to balance everything, one against the other," said Yedlin.
Other key takeaways for Calgary under the Alberta government's 2025-26 fiscal plan include:
$2 million decrease in capital for the Glenbow Museum renovations, which will now be funded by the Alberta Foundation for the Arts.
$485 million over the next three years for Deerfoot Trail upgrades, a provincially owned and maintained highway.
$225 million over three years to fund various school projects across Alberta, which was part of an initiative previously announced by the provincial government. It includes the planning and design of 18 new school projects in Calgary and area.
$45 million over three years for the new Office of the Chief Medical Examiner building.
Funding for the Airdrie Regional Health Centre will begin this year, with $3 million going to planning and design over the next two years.