Critics are highlighting their concerns with Alberta’s 2025 budget, saying while it includes changes to income tax brackets and potential savings, there’s little health-care funding and not enough support for those living below the poverty line.
Finance Minister Nate Horner tabled a $5.2 billion deficit Thursday, with multi-billion-dollar deficits expected in the following two years.
Horner says the looming deficit is largely due to incoming U.S. tariffs that the province is saving for in case of major job losses, but also declining oil revenues and a more than $1 billion promise to give Albertans a personal break on income taxes.
While a new eight per cent tax bracket for Albertans on their first $60,000 of income is anticipated to save some individuals up to $750 per year, critics say more can still be done.
Meaghon Reid, executive director of Vibrant Communities Calgary, says while middle class earners are getting a break, those at or below the poverty line are still struggling.
“What we need to do in those cases to look at income-based solutions, tax break solutions for people so that they can stay afloat and really weather the time ahead,” she said.
“We’ve seen the affordability crisis effects on people who are lower-income earners, and we are now facing a potential, actual recession, so we can’t act fast enough to take care of that lowest band of earners.”
Reid pointed to the need for wage increases, which she says have only gone up about one per cent over the past four or five years for those in precarious financial situations.
“The tariff conversation has also really introduced an element of distress for people whose cheques just aren’t going far enough.”
Health care privatization and capacity concerns
Alberta plans to spend about $28 billion on its health-care system this fiscal year, an increase of 5.4 per cent or $1.4 billion.
Chris Gallaway, the director of Friends of Medicare, says while an increase in funds is welcome, this kind of spending won’t meet population growth or address hospital capacity issues.
“We’re not seeing investments in retention or recruitment that we need, all the while we’re still shoveling all sorts of money into private contracts – like private surgical centers – that make a profit off of our dollars, rather than into our hospitals and into our workforce,” he said.
“It’s unclear what the province is going to do as the refocusing and restructuring continues, and who’s going to operate the hospitals and those pieces? We have a lot of concerns.”
Flagged in this budget is a move from the UCP government to transfer ownership of all hospitals – along with the land they stand on – to the Alberta Infrastructure department.
Currently, Alberta owns about 380 land titles and 700 structures from massive hospitals, service buildings and small rural care centres.
Premier Danielle Smith addressed those concerns Thursday, saying that her government found it frustrating to spend billions of dollars on maintaining and upgrading capital projects, to then be told by entities who owned them that they needed to be bought at fair market value.
“There were several irritations that emerged as a result of that, and so we made a decision as a government, if Alberta taxpayers are going to pay, then Alberta taxpayers are going to own it,” said Smith.
“So that’s why, with our new $8.6 billion spend on schools for example, we are going to continue owning those and leasing them back at $1 to the school boards.
“With all of our health facilities, that will allow for us to choose the operator, and it will allow us to repurpose them to our needs.”
Smith added that the province has a lot of changing needs in health care, including acute care beds and the building of more mental health, addiction and special-purpose facilities.
“Allowing us to have a line of sight on all of that real estate will allow us to repurpose that, but the intention is for those buildings to be owned by the people of Alberta through the Government of Alberta.”
Galloway says comments like that sound shady to him.
“It sounds a lot like bringing in private partners, or private partner/public partnerships, but we don’t have the details and that’s something we called for. They’re looking at spending $200 million on involuntary treatment centers, and we asked, ‘who will own them? Who’s going to build it or operate it? Is there a third party involved? Is it a public entity?’”
“Given what’s going on in the news and the allegations that are out there, maybe they should stop and focus on providing good public services, rather than finding partners to come in and make a profit off of our healthcare.”
The Alberta Medical Association (AMA) expressed similar concerns in a letter released on Friday.
“The AMA remains concerned that without a very detailed health human resources workforce plan, there is risk that surgical resources will be used only sub-optimally, while patient waitlists continue to grow,” read the letter.
“We urgently need more anesthesiologists, physician and nursing surgical specialists and general internal medicine specialists. The most significant drivers for recruiting and retaining these specialists during this human health resource crisis is extremely competitive compensation, along with healthy work environments.”
Education property taxes more than double in Calgary compared to Edmonton
Alberta pledged just under $10 billion for K-12 education operating costs, marking a 4.5 per cent increase compared to last year’s budget.
Government legislation, however, limits annual spending increases to a rate of population growth plus inflation, which was set at 7.3 per cent for the purposes of Thursday’s budget.
The province also committed $185 million this year to hire more than 4,000 new education staff, including teachers and educational assistants.
Alberta Teachers’ Association president Jason Schilling said the province “should be ashamed for once again short-changing the students of this province,” adding that this won’t address long-standing problems in the education sector.
That said, the budget did include $225 million to plan for and design new schools in the Calgary area over the next three years.
Those kinds of increases, however, and the need for more schools in Calgary particular will see homeowners in that city on the hook for an extra $239 annually.
That fee is substantially higher than the $90 annually for education property taxes that Edmonton homeowners will have to pay.
Smith addressed those concerns Thursday, noting that the province has added 220,000 students over the last five years, the majority of which have settled in Calgary.
“The education property tax historically has had been used to help with capital projects, and I would say to Calgarians that they are going to get the best number of new capital projects,” she said.
“I know that Calgary school boards, I think they have the largest asks in the province. Edmonton is going to experience the same thing, but we’ve got to build out 100 new schools over the next six or seven years and being able to have a little bit of support from the communities that are going to be the greatest beneficiaries of that, new construction is part of what we had in mind.”
‘We need to sustain this’
Marked in Budget 2025 is funding for an additional 100 police officers in Calgary and Edmonton.
The Public Safety and Emergency Services operating expense has increased to $16 million.
In this budget, that includes $8 million to support those additional officers, $7 million for 911 call centres offset by the 911 levy and $2 million from the federally funded Gun and Gang Violence Action Fund, less $1 million in reductions and transfer to capital investment.
David Cooper, a transit safety expert and principal leading consultant for Leading Mobility Consulting, says these levels of investment are welcome, especially for frontline staff.
“This is also looking at more of a structured introduction of partnership with the Calgary Police Service, and I think what’s interesting when we look at transit safety more broadly, one of the things that has been very core to the conversation is increasing frontline staff, and we’ve seen significant increases of that in Calgary,” he said.
“But, we have to sustain these efforts in outreach, you have to sustain your efforts in having the staff available and also the back-end resources. We need more access to housing, we need more wraparound supports.”
Cooper added that the continued funding of the low-income transit passes, which benefit 160,000 Albertans and approximately 40 per cent of Calgary Transit’s ridership, are essential.
“This will certainly help Calgarians get to jobs, get to opportunities and things that will relieve the betterment of Calgarians lives, and that’s something that we’ll always be looking at in not just this budget, but future budgets going forward.”
CFIB calls on Alberta to reduce small business tax
The Canadian Federation of Independent Business (CFIB) has commended the Alberta government for lowering personal income taxes, which it says will reduce the tax burden for workers and sole proprietor businesses, but says this budget lacks reduction in small business taxes.
“Businesses and residents are really struggling with affordability, we would have liked to see businesses that are incorporated, businesses that pay corporate income taxes, get their taxes reduced as well,” said Bradlee Whidden, CFIB Alberta senior policy analyst.
“This is something that numerous other provinces have recognized the need to do.
Saskatchewan recently made the decision to keep their corporate income tax rate for small businesses at one per cent, which was originally only supposed to be a temporary measure, while Nova Scotia reduced theirs to 1.5 per cent and raised the threshold far above Alberta.”
Whidden says Alberta’s small business taxes also only make up about half a per cent of all provincial revenues.
“So eliminating that tax rate would barely make an impact on provincial revenue figures,” he said.
“Tax savings would help these businesses hire more workers, invest in training, expand their business, all the things we want to see businesses do to help stimulate and grow the economy.”
