Key Highlights from the Budget that our Chamber has focused on:

1. Addressing Business Challenges and Cost Pressures

• Investing in Red Tape Reduction and reducing the business tax allows business to reinvest in the community by investing in capital, training for employees and providing the ability to hire more workers.

2. Regional Project Funding

• Investments in new schools, highway 3 twinning, expanded investments into the Medicine Hat Intensive Care Unit, border upgrades and border control are positive infrastructure investments with long-term benefits in our region.

3. Agriculture Investments

• Improving market access for agriculture and agri-food products and investments in water strategies and improvements to water storage and irrigation will only benefit our region within the agri-food corridor, rich with agriculture investments.

4. Government Efficiencies

• Efficiency in Government decisions and regulatory processes will speed up economic development and investments in economic diversification. We also want to ensure the Government continues to be focused on targeted and actionable measures to address interprovincial trade barriers.

Policy Highlights for Business

• A Tailored and Local P3 Approach to Affordable Housing
• Alberta’s Role in Enhancing Interprovincial Collaboration
• Benefits of Twinning Highway 3
• Improving Risk Management for Agriculture Producers
• Increasing Access to Mental Wellness Workplace Supports
• Investment Attraction for Industrial Zones
• Reduce Alberta Corporate Income Tax Rates
• Streamline Size of Government

We are pleased with the recent changes to individual tax rates, which have resulted in a more favorable tax environment for most individuals and have positioned our province as one of the lowest three jurisdictions for the majority of taxpayers. Keeping the corporate tax rate as lowest in the Country is a positive step forward and we would like to see future budgets also have the small business tax rate as the lowest in the country.

Small businesses with income less than $500,000 are still taxed at a rate of 2%. In order to better support the growth of small businesses, we have recommended reducing this tax rate to somewhere between 0-1%, which would place Alberta in alignment with the tax rates offered by our prairie neighbors in Manitoba and Saskatchewan. These business owners are also challenged with uncertainty and constant and continued cost increase pressures.

Decreasing the small business tax rate would provide greater incentives for entrepreneurship and help stimulate and sustain the local economy, ultimately benefiting job creation and long-term economic growth.

2025 Provincial Budget Analysis

Budget 2025-2028 focuses on health care, education, workforce and economic diversification. It is being compared to a budget from 50 years ago, in times of substantial cost increases and uncertainty.

With threats of tariffs from one of our largest trading partners, population growth that impacts both education and health care needs and increasing costs along with rising occurrences of natural disasters and emergency mitigation measures, we need a budget that can manage these impacts while planning for the future.

The government has targeted increases for health, education, income support programs, affordability and affordable housing. One of the cornerstone announcements of this budget was the additional tax bracket created for those earning an income under $60,000, saving those Albertans $750 and families $1500/year. While we didn’t see a reduction in small business tax, we hope this change in tax bracket will also assist some of those small business owners that aren’t drawing wage earnings at that level.

From a housing affordability standpoint, $655 million was allocated for the Affordable Housing Partnership Program, an increase of $250 million from Budget 2024. This will support the goal of creating 6,300 new affordable housing units over the next 3 years, for a total of 13,000 affordable housing units through the Stronger Foundations affordable housing strategy.

From an agriculture standpoint, AFSC’s 2025-26 agriculture support and insurance programs are estimated at $626 million, an increase of $25 million from the 2024-25 third quarter forecast. The impact of hot and dry conditions in 2024 put stress on crops across Alberta, requiring $1.1 billion in disaster assistance for agricultural producers. Additional support has also been committed to regional agricultural societies in light of significant financial challenges with additional support in both 2024-25 and 2025-26 to help the societies achieve sustainability by improving operations, governance, and planning for capital investment and asset maintenance.

The Capital Plan invests $203 million in Natural Resources Management, including $164 million for the Water Management Infrastructure Program to repair and upgrade water infrastructure such as water canals, dams, spillways, and reservoirs. It also provides $5 million in new funding for a province-wide strategic review of water storage infrastructure opportunities, which are vital for long-term water security during flood or drought conditions, which we know is critical in our region.

For economic investment, over the three years, funding for the Film and Television Tax Credit is $235 million, $193 million for skills and training programs and $45 million for the Investment and Growth Fund. We are also pleased to see continued efforts to diversify our economy with a forecast investment of $54 billion in investment by 2027, outside of traditional oil and gas, along with continued investments in the provincial designated industrial zone pilot project.

There is $1 million earmarked in planning funds for the Trades and Apprenticeship Promotional Plan program, aimed at encouraging young people to enter skilled trades through hands-on activities. In K-12 Education, they have allocated funding for career education to $102 million over the next three years to support students with hands-on learning opportunities to develop skills that can be applied daily. Funding for skilled trades programs, targeting labour shortages, is $135 million in 2025-26, essentially the same as in 2024-25, with another $271 million allocated over the following two years. Programs include apprenticeship delivery, apprenticeship grants and adult learning initiatives.

The notable regional specific commitments included $5 million in funding to enhance ICU capacity in both Medicine Hat and Lethbridge and continued commitment to twin Highway 3 Twinning from Taber to Burdett.

There is also $25 million for the new Alberta border security initiative, supporting the purchase of equipment and the development of border patrol facilities, which we hope will have positive impacts on our border at Wild Horse, in addition to the other crossings in Alberta.

Low taxes and free enterprise will drive competitiveness and our future economy and while we are pleased to have the lowest corporate tax rate in the Country, we would like to see the same for the small business tax rate. While currently at 2%, we have been asking for it to be the lowest in the country with our neighbouring prairie provinces of Manitoba at 0% and SK at 1%. It’s something Chambers across our province have been asking for and we know this can be improved with a goal to see this introduced in the next budget. With increases in the education tax in this budget, any assistance and cost pressure relief would be welcome for the small businesses in our region, which make up close to 96% of the total number of businesses in our region.

Resource revenue is the Achilles Heel of the province, similar to Medicine Hat and we cannot rely on that revenue indefinitely. We are pleased that the government has taken a bold step to release a plan to grow the Heritage Savings Trust Fund to $250 billion by 2050. We were also pleased to see municipal grants in place of taxes reach 100% of eligible tax amount by 2026-27 once again, as this was lost resource revenue for our municipalities that had impacts on municipal budgets.

We feel the budgeted forecast for tariffs at 15% is overly optimistic when 25% is the tariff rate anticipated, and we are uncertain as to the impact this may have on the provincial budget over the coming year. Our recommendation has typically included that the calculation of spending as a percentage of GDP should be less than 26%, with the current projection at 20% in Alberta. With a 2025-26 operating expense at 3.6%, $2.2 billion higher than the 2024-25 forecast, anticipated to reach $66 billion in 2027-28, we hope that the Government works towards a commitment to balance the budget in future years with focused economic diversification, investments and savings, moving forward to balance the budget after this three-year budget cycle.

Find out more about the 2025 Provincial Budget:

Budget 2025: Meeting the challenge

Budget Documents