Budget 2025 Analysis : Navigating Turbulent Times
Unlike previous budgets, Budget 2025 pushes Alberta into the red as the government balances revenue shortfalls, the threat of U.S. tariffs, and a costly tax cut promised during the election. Finance Minister Horner acknowledged the province's economic uncertainty, stating Alberta is “being buffeted by forces that exceed our ability to influence or predict.” Despite these challenges, the government is working to minimize the deficit while maintaining essential services and fulfilling political commitments.
With projected U.S. tariffs of 10% on energy and 15% on goods, Alberta’s economic growth is expected to slow to 1.8% in 2025 and 1.7% in 2026, down from 3% in 2024. The province is forecasting oil prices at $68 per barrel and expects 519,000 barrels of conventional crude production per day. Additionally, population growth is set to decline to 2.5% in 2025, a sharp drop from 4.4% in 2024.
Budget 2025 reflects the government’s attempt to navigate economic turbulence while staying true to its commitments, but rising costs and external pressures will test its ability to maintain stability.
By the Numbers:
- $79.3 billion in total spending – up $4.4 billion since Budget 2024
- $5.2 billion deficit, with deficits also projected for the next two fiscal years
- $1.2 billion to implement the tax cut
- $28 billion in operating funding for the healthcare system, up 5.4% since Budget 2024
- $26.1 billion over 3 years in the 2025 Capital Plan – an increase of 4%
- 8.7% estimated debt-to-GDP ratio
Tourism:
- Travel Alberta’s budget is set at $75 million. A decrease of $5 million from the previous year.
- The Tourism Levy brought in $122 million in revenue an increase from last year’s $118 million. This means Travel Alberta received about 61% of the revenue generated.
- Tourism and Sport received $62 million in operating funding, an increase of $2 million from 2024/25.
- In 2025-26, $83.5 million is allocated to invest in Crown land recreation and maintenance initiatives, including refurbishing and building trails.
- In 2025-26, $95.2 million is allocated to maintain operations of the Alberta Parks system
Wildfire preparation and emergency management:
- $160 million in operating expenses to strengthen wildfire response.
- $125 million in capital funding over three years for flood and drought mitigation projects.
Safe communities:
- $1.3B for Public Safety to support Alberta Sheriffs, Corrections, and emergency management, including securing the southern border.
- $19.5M for Safe Streets to tackle urban crime in high-risk areas like downtown cores and public transit.
Immigration:
- The Alberta Advantage Immigration Program application fee has increased to $1500.
- The province anticipates immigration will slow due to reduced federal immigration targets.
Liquor and Gaming:
- The province brought in long over due changes to the liquor markup schedule that aim to increase fairness in the marketplace.
At its core, the 2025 budget is a strategic gamble, betting that tax cuts will drive economic growth, investments in healthcare and education will ease the strain of record population increases, and Alberta’s economic resilience will withstand geopolitical and environmental uncertainties. Its success—or failure—hinges on the province’s ability to navigate both foreseeable and unforeseen challenges in the years ahead.
