Budget 2025: What It Means for Families
Alberta Budget 2025 delivers up to $1,500 in household tax savings, boosts child benefits, holds child care at $15/day, and invests in schools and housing.
Household tax savings (two earners)
Up to $1,500
New 8% bracket
Education operating budget
$9,883M
+4.5%
Child care flat fee
$326.25/month
Maintained
Affordable housing capital
$767M over 3 years
Increased
The Bottom Line
Budget 2025 gives Alberta families real tax relief: a new lower tax bracket saves a typical dual-income household up to $1,500 per year. Education gets a 4.5% funding increase, child care stays at roughly $15 a day, and the Alberta Child and Family Benefit grows by 8.4%. But the province is running a $5.2 billion deficit, unemployment is projected at 7.4%, and the economic outlook is clouded by U.S. tariff uncertainty.
Top Measures That Affect You
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New 8% income tax bracket on the first $60,000 of income, effective January 1, 2025. Each earner in your household can save up to $750. Earners below $60,000 see their provincial income taxes fall by about 20%. Most workers will notice the change on paycheques after July 1, 2025.
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Education operating expense rises to $9,883 million, an increase of 4.5% from last year. This includes $814 million over three years for K-12 enrolment growth, $55 million in 2025-26 for classroom complexity (hiring more educational assistants and specialists), and $1.6 billion for students with specialized learning needs.
Alberta Child and Family Benefit increases to $375 million, up $29 million (8.4%). The benefit includes a 2% escalator and higher phase-out income thresholds, so more families qualify and existing recipients get slightly larger payments.
Child care flat fee of $326.25 per month maintained for children up to kindergarten age in licensed daycare. The total child care budget is $1,966 million in 2025-26.
$2.6 billion over three years for school construction, an increase of $505 million from Budget 2024. The government aims to deliver over 200,000 new and modernized student spaces over the next seven years, with roughly 90,000 within the next four years.
$767 million over three years for housing through the Alberta Social Housing Corporation, including the Affordable Housing Partnership Program ($655 million over three years, up $250 million from Budget 2024) with a goal of creating 13,000 affordable housing units.
$102 million over three years for career education, supporting students with hands-on learning opportunities and skills development.
Direct Financial Impact
Income taxes: A family with two earners each making $60,000 or more saves up to $1,500 per year combined. A single-earner household at $60,000 or more saves up to $750. If your household income is under $60,000, you still benefit with a roughly 20% reduction in provincial income tax.
Child care: Families with children in licensed full-time daycare continue to pay $326.25 per month (roughly $15 per day or $3,915 per year) per child.
Alberta Child and Family Benefit: Payments are quarterly and non-taxable. The amount varies by household income and number of children, but the overall program is growing by 8.4%, and higher income thresholds mean some families who previously did not qualify may now be eligible.
Education property tax: After being frozen in 2024-25, education property tax rates will increase to cover roughly one-third of Education's operating expense. The exact impact depends on your municipality and property assessment, but homeowners should expect a modest increase.
Overall: For a typical dual-income family with children, the combined tax savings, maintained child care fees, and increased child benefits represent a meaningful improvement. However, the projected 2.6% CPI inflation and rising education property taxes partially offset the gains.
Service Changes
School Construction Accelerator Program (SCAP): Announced in fall 2024 and continued in Budget 2025, this program accelerates school building, expands modular classrooms, and supports charter school construction. An additional $618 million over three years advances 22 school projects to the next construction stage. A further $150 million expands the Modular Classroom Program.
Education funding formula overhaul: The formula for school authorities is being adjusted to use two years of enrolment data instead of three, making it more responsive to rapid-growth areas while protecting declining-enrolment districts. This means $55 million in 2025-26 and $94 million in each of the following two years in additional formula funding.
Primary Care Alberta: A new $322 million health agency aimed at giving families better access to family physicians, nurse practitioners, and pharmacists, including after-hours care and virtual services. If your family has had trouble finding a doctor, this is intended to improve access.
Mental health classrooms expanding from 20 to 60, providing clinical mental health support to students with complex needs in schools.
Housing: The government aims to build 6,300 new affordable housing units over the next three years. Since 2021, 3,301 units have been built under the Stronger Foundations affordable housing strategy. Over 110,000 Albertans in 60,746 households currently receive support through ASHC affordable housing, rental supplements, and other programs.
What's Missing
No direct affordability rebates: There are no electricity bill credits, natural gas rebates, or one-time affordability payments in this budget.
Child care cliff looming: The Canada-Alberta Child Care Agreement expires after 2025-26. The budget projects child care spending dropping by $492 million by 2027-28. The government says it remains committed to a sustainable system and is preparing to negotiate a renewed agreement, but the outcome is not guaranteed.
No targeted rent relief: Despite noting that shelter costs remain a key driver of inflation, the budget includes no new programs specifically targeting rental affordability for families beyond existing ASHC supports.
Employment uncertainty: The budget projects unemployment rising to 7.4% in 2025 (from 7.0% in 2024), driven by U.S. tariffs and population growth outpacing job creation. If you or your partner work in manufacturing, construction, or trade-exposed sectors, this is a risk.
No increase to minimum wage: The budget does not include any changes to Alberta's minimum wage.
Key Dates
| Date | What Happens |
|---|---|
| January 1, 2025 | New 8% tax bracket takes effect |
| February 2025 | Primary Care Alberta becomes operational |
| After July 1, 2025 | Tax cut visible on paycheques after payroll withholding adjustments |
| April 1, 2025 | New fiscal year begins; Assisted Living Alberta launches |
| 2025-26 | Final year of Canada-Alberta Child Care Agreement |
| 2025-26 to 2031-32 | 200,000+ new and modernized student spaces targeted |
| 2026 | Alberta Disability Assistance Program launches |
Where to Get Help
Alberta Child and Family Benefit: File your tax return to be assessed automatically. Visit alberta.ca/alberta-child-and-family-benefit.
Child care: Find licensed child care and learn about the flat-fee program at alberta.ca/child-care.
Affordable housing and rental assistance: Contact the Alberta Social Housing Corporation or visit alberta.ca/affordable-housing to learn about programs including rental supplements.
School enrolment and construction: Contact your local school board for information about new school projects in your area.
Income tax: Contact Alberta Treasury Board and Finance at 780-427-5364 (toll-free: 310-0000 then 780-427-5364) or visit alberta.ca/budget-documents.