Budget 2025: What It Means for Farmers

The Bottom Line

Budget 2025 maintains strong support for Alberta's farming sector with $860 million in Agriculture and Irrigation operating expense and significant new investments in irrigation and crop research. However, the threat of U.S. tariffs at 15% on all goods creates serious uncertainty for your crop exports, and higher insurance premiums are on the way after three drought years depleted crop insurance funds. The personal income tax cut to 8% on your first $60,000 of income will save you up to $750 this year.

Top Measures That Affect You

1. Agriculture and Irrigation Operating Budget Holds Steady

The Agriculture and Irrigation ministry receives $860 million in operating expense for 2025-26, a $30 million or 3.6% increase from 2024-25. This is mainly directed to income support and insurance programs delivered through the Agriculture Financial Services Corporation (AFSC). While this is a modest increase, it comes after a year when the ministry spent an additional $1.1 billion in disaster assistance due to challenging growing conditions.

2. Irrigation Strategy Gets $152 Million Over Three Years

Budget 2025 allocates $152 million over three years for Agriculture Sector Strategy irrigation projects. This is in addition to $57 million for the Irrigation Rehabilitation Program ($19 million per year for three years) and $13 million for other irrigation projects in 2025-26. If your farm depends on irrigation infrastructure, these investments should improve water delivery reliability and capacity across southern Alberta.

3. Crop Diversification Centres Receive New Funding

Funding for Western Crop Innovations and Alberta's two Crop Diversification Centres is increasing by $3 million in 2025-26 and by $2 million in each of the following two years. The Capital Plan includes an additional $4 million in 2025-26 for facility upgrades to modernize these research facilities. This research helps you address threats from emerging plant health issues, invasive species, and climate change.

4. Animal Health Programs Expanded

Budget 2025 invests $9 million over three years for African Swine Fever mitigation and Foot and Mouth Disease Vaccine Bank initiatives, cost-shared with the federal government. An additional $9 million over three years goes to the University of Calgary Veterinary Medicine to improve diagnostic services and lower costs for producers like you.

5. U.S. Tariffs Threaten Crop Exports

The budget assumes 15% tariffs on all Canadian goods exported to the U.S. (with energy at 10%). For farmers, this means your crop export volumes are expected to take a hit. The Fiscal Plan notes that a greater diversity of export markets could provide some cushion for major commodities such as wheat, but the impact will be real. The government is working to cultivate export markets and increase market access for Alberta products.

6. Personal Income Tax Cut

A new 8% tax bracket on your first $60,000 of income saves you up to $750 per year. This applies to all individual taxpayers and is effective January 1, 2025. You should see the benefit on your paycheques after July 1, 2025, when payroll withholdings are adjusted.

7. Agriculture Capital Plan: $880 Million Over Three Years

The Capital Plan allocates $880 million over three years for agriculture and natural resources sectors. This covers irrigation development, natural resources management, and business and industry growth to foster investment and promote diverse business development.

Direct Financial Impact

Tax savings: The new 8% personal income tax bracket on your first $60,000 of income saves you up to $750 in 2025. For farm couples filing individually, that could mean up to $1,500 in combined household savings.

Insurance premiums rising: After severe droughts in 2021, 2023, and 2024 depleted AFSC's crop insurance fund, the balance needs to be restored through higher agriculture insurance premiums. Declining commodity prices also decrease the value of crops being insured. Budget the expectation of higher premium costs in 2025-26.

AFSC programs: Agriculture support and insurance programs through AFSC are estimated at $626 million in 2025-26, an increase of $25 million from the prior year. AgriStability increased by $135 million in 2024-25 as declining commodity prices put downward pressure on producer profit margins.

Education property tax: After being frozen in 2024-25, education property tax rates on farmland will increase in 2025-26 to $2.72 per $1,000 of equalized assessment for residential and farmland properties. Budget for this increase on your farm property.

Fuel tax exemption continues: The Tax Exempt Fuel User program for marked fuel (off-road use) continues, valued at approximately $241.3 million across the province. The Alberta Farm Fuel Benefit for marked fuel is valued at approximately $62.4 million.

Service Changes

Health care restructuring: The province is creating four new health agencies including Primary Care Alberta, which will provide comprehensive access to primary care services including in rural and remote areas. A new primary care physician compensation model aims to strengthen recruitment and retention of family physicians and rural generalists.

Rural Health Action Plan: The 2024-2027 Rural Health Action Plan continues, with $44 million in 2025-26 for the Physician Training Expansion Program delivered through rural training centres. The plan aims to attract and retain health care providers in rural communities.

Agricultural societies support: Regional agricultural societies facing significant financial challenges will receive additional support in 2025-26 to improve operations, governance, and capital investment planning.

AFSC reinsurance declining: Government reinsurance expense is forecast to decrease $22 million in 2025-26 and $31 million in the next two years, as the crop insurance fund balance is projected to recover and the value of insurance is lower with lower commodity prices.

What's Missing

No direct tariff compensation program: While the budget adds $38 million for income support anticipating tariff impacts, there is no specific program to compensate farmers directly for losses from U.S. tariffs on crop exports.

No carbon levy relief: The budget does not include specific measures to reduce farm input costs related to carbon pricing on fuel and fertilizer.

Limited drought preparedness: After three severe drought years in four, the budget does not announce a new long-term drought resilience strategy beyond restoring the crop insurance fund.

No farmland assessment cap: Education property taxes are rising on farmland, with no announcement of assessment relief for agricultural land facing commodity price pressures.

No AgriStability enhancements: Despite the program seeing $135 million in increased costs from declining margins, no structural changes to AgriStability coverage levels are announced.

Key Dates

Date	Event
January 1, 2025	New 8% personal income tax bracket takes effect
February 27, 2025	Budget 2025 tabled
April 1, 2025	2025-26 fiscal year begins
After July 1, 2025	Adjusted payroll withholdings reflect tax cut on paycheques
2025-26	Higher crop insurance premiums take effect
2025-26	Education property tax rate increases to $2.72/$1,000 for farmland
2025-28	$152M irrigation strategy projects roll out over three years
2026	Alberta Disability Assistance Program launches (relevant for farm families)

Where to Get Help

• Agriculture Financial Services Corporation (AFSC): For crop insurance, AgriStability, and farm lending programs. Visit afsc.ca or call 1-877-899-AFSC (2372).
• Alberta Agriculture and Irrigation: For programs, market information, and producer supports. Call 310-FARM (3276) toll-free in Alberta.
• Alberta Treasury Board and Finance: For questions about the personal income tax cut. Visit alberta.ca/budget.
• Your MLA: Contact your local Member of the Legislative Assembly to raise concerns about tariff impacts on your farm operation.
• Alberta Federation of Agriculture: For sector advocacy and updates on how budget measures affect producers.