Budget 2026: What It Means for Homebuilders
Alberta Budget 2026 forecasts housing starts declining 27% to 40,000 units, but a $28.3B capital plan creates offsetting demand in institutional construction.
Housing starts forecast
40,000 units
Down 27% from 54,900 in 2025
Total capital plan (3-year)
$28.3B
$2.2B more than Budget 2025
School capital (3-year)
$3.98B
Including $600M for modular classrooms
Affordable Housing Partnership (3-year)
$768M
Target of 13,000 units
Population growth forecast
1.1%
Down sharply from 2.5% in 2025
The Bottom Line
Budget 2026 presents a challenging but navigable year for your business. The headline is a 27% decline in housing starts from the record 54,900 in 2025 to a forecast 40,000 in 2026, driven by population growth slowing sharply from 2.5% to 1.1%. However, 40,000 starts remains relatively strong by historical standards, and the province's record $28.3 billion three-year capital plan creates substantial offsetting demand if you can diversify into institutional, school, and affordable housing construction.
Top Measures That Affect You
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Housing starts forecast -- 40,000 units. Down from a record 54,900 in 2025. Apartment starts, which hit a 55-year high share in 2025, will moderate most. Starts are expected to settle around 35,000 by 2028-29.
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Population growth -- 1.1%. Sharply down from 2.5% in 2025 and 4.7% in 2024. Net outflows of 30,000 non-permanent residents are expected. The population expands by about 55,000 people in 2026.
Total capital plan -- $28.3 billion over three years. This is $2.2 billion more than Budget 2025 and represents a record level of provincial construction spending.
School capital -- $3.98 billion over three years. This includes $2,483 million for previously announced school projects, $600 million for modular classrooms ($200 million per year), and 160 school projects underway.
Affordable Housing Partnership -- $768 million over three years. Provincial capital for affordable housing construction, with $204 million in 2026-27 rising to $293 million by 2027-28.
Continuing Care Capital Program -- $923 million over three years. New continuing care facility construction and modernization adds to your institutional pipeline.
Education property tax increase. Residential education property tax rate rises from $2.72 to $2.84 per $1,000 of equalized assessment, marginally increasing homeownership costs for your buyers.
Direct Financial Impact
If your business focuses on residential starts, you are looking at a 27% volume decline. Apartment construction, which drove the 2025 boom, will moderate most significantly. Multi-unit dwelling inventories in Edmonton and Calgary remain relatively low, which provides some floor for activity.
If you can take on institutional and government projects, the $28.3 billion capital plan offers significant opportunities. School construction alone at $3.98 billion over three years represents steady demand. The $768 million affordable housing program and $923 million continuing care program add further volume. Renovation spending is expected to turn a corner after years of weakness.
Labour market conditions are tightening with unemployment declining to 6.6%, which may increase your wage costs for construction trades.
Service Changes
| Service | What Is Changing | Direction |
|---|---|---|
| Residential construction demand | Housing starts declining from 54,900 to 40,000, settling to 35,000 by 2028-29 | Negative |
| Affordable housing construction | $768M over 3 years for Affordable Housing Partnership Program | Positive |
| School construction pipeline | $2,483M for announced school projects plus $600M for modular classrooms | Positive |
| Continuing care construction | $923M over 3 years for continuing care facilities; $150M for lodge modernization | Positive |
| Education property tax | Residential rate rising from $2.72 to $2.84 per $1,000 of equalized assessment | Negative |
| Labour market | Unemployment declining to 6.6% from 7.2%, tightening construction labour supply | Negative |
What's Missing
- No direct incentives for residential homebuilding such as first-time homebuyer programs or construction tax credits.
- No measures to address construction labour shortages despite the tightening labour market.
- Limited detail on rental housing construction incentives despite the apartment boom of 2025.
- No mention of building code modernization or streamlined permitting processes specifically for residential construction.
- No specific programs supporting modular or prefabricated housing beyond the school classroom program.
Key Dates
| Date | What Happens |
|---|---|
| April 1, 2026 | Budget takes effect with increased education property tax rates and new capital plan allocations |
| 2026 | Housing starts forecast to decline to 40,000 from 54,900 in 2025 |
| 2027-2028 | Housing starts expected to settle around 35,000, in line with household formations |
Where to Get Help
- Canadian Home Builders' Association - Alberta -- Industry advocacy and resources at chbaalberta.ca.
- Alberta Construction Association -- Resources for builders at albertaconstruction.net.
- Affordable Housing Partnership Program -- Program details at alberta.ca/affordable-housing-programs.
- Alberta Purchasing Connection -- Government procurement opportunities at purchasingconnection.ca.
- Alberta Infrastructure -- Capital project information at alberta.ca/infrastructure.
- Municipal permitting -- Contact your local municipality for building permit requirements and timelines.