Budget 2025: What It Means for Rural Communities

The Bottom Line

Budget 2025 delivers substantial investments that matter to rural Alberta. The 2024-2027 Rural Health Action Plan continues with $44 million in physician training expansion, plus increased funding for the Rural Remote Northern Program and new primary care physician compensation models designed to keep doctors in your community. Infrastructure spending includes $2.5 billion for roads and bridges and $7.5 billion for municipal infrastructure over three years. However, the broader fiscal picture of a $5.2 billion deficit and constrained operating growth means rural services outside of priority health and infrastructure areas face a tight funding environment.

Top Measures That Affect You

1. Rural Health Action Plan Continues

The 2024-2027 Rural Health Action Plan continues to be implemented across five focus areas: Workforce, Access, Models of Care, Community Care, and Prevention and Wellness. In 2025-26, $44 million is allocated for the Physician Training Expansion Program delivered through rural training centres. The plan provides rural, Indigenous, and other learners with increased access to medical education in rural areas. Goals include attracting and retaining health care providers in rural communities, improving access to after-hours care and specialists, and developing innovative care delivery models suited to rural settings.

2. New Physician Compensation Model

A new primary care physician compensation model, co-developed with the Alberta Medical Association, provides family physicians and rural generalists an alternative to fee-for-service. The model recognizes the extensive training and leadership of rural generalists and incentivizes physicians to expand the number of patients they care for and practice full-time. This is designed directly to address the doctor shortage in your community.

3. Rural Remote Northern Program: +$12 Million

The existing Rural Remote Northern Program receives a $12 million increase. An additional $15 million is allocated for recruitment and retention of physicians who practice full-time in underserved areas. Combined with $12 million annually for physician support programs, this represents a focused effort to put and keep doctors in rural Alberta.

4. Roads and Bridges: $2.5 Billion

The Capital Plan allocates $2.5 billion over three years for provincial highways, bridges, and road safety improvements. Specific rural-relevant projects include Highway 686 paving between Peerless Lake and Trout Lake, Highway 40 grade widening and twinning, and Highway 881 safety improvements. These investments reduce travel times and improve safety for rural residents who depend on highways to access services.

5. Municipal Infrastructure: $7.5 Billion

Municipal infrastructure support totals $7.5 billion over three years. This includes $2.5 billion through the Local Government Fiscal Framework (LGFF), an increase of $138 million from Budget 2024. Municipal Affairs allocates $3,429 million in capital over three years for municipal projects including water, wastewater, and community infrastructure.

6. Personal Income Tax Cut

The new 8% tax bracket on your first $60,000 of income saves you up to $750 per year. Workers earning less than $60,000 see their personal income taxes fall by approximately 20%. This savings is province-wide but is particularly meaningful in rural communities where incomes may be lower.

7. Irrigation and Agriculture

Agriculture and Irrigation receives $860 million in operating expense. Irrigation strategy projects receive $152 million over three years, with an additional $57 million for the Irrigation Rehabilitation Program. Crop Diversification Centres receive increased research funding. For rural communities built around agriculture, these investments sustain your economic base.

Direct Financial Impact

Tax savings: Up to $750 per individual from the new 8% bracket. Alberta continues to have no provincial sales tax.

Property taxes: Education property tax rates increase in 2025-26 to $2.72 per $1,000 for residential and farmland and $4.00 per $1,000 for non-residential. Budget for this increase.

LGFF funding: Your municipality receives a share of the $2.5 billion LGFF over three years. The formula-based allocation provides predictable funding for local priorities including roads, water, and community facilities.

Utilities: Affordability and Utilities receives $160 million in operating expense, including $4 million for consumer awareness initiatives explaining options to find the best electricity plan. Rural utilities grant funding of $19 million over three years continues to support infrastructure in underserved areas.

Agricultural society support: Regional agricultural societies facing financial challenges receive additional support in 2025-26. If your community's ag society hosts events and provides meeting space, this support helps maintain those services.

Service Changes

Primary Care Alberta: The new provincial health agency for primary care aims to provide comprehensive, timely access to high-quality primary care services including after-hours and in rural and remote areas. This includes virtual and digital services with coordinated patient information access.

Assisted Living Alberta: The new agency for continuing care will focus on making the full continuum of care available to all Albertans, from assisted living to home care and community care. Federal funding of about $40 million per year supports the Aging with Dignity agreement.

Lodges: $50 million per year is allocated for lodges that provide safe, secure, and affordable housing for lower-income seniors to age in their communities. If your community has a lodge, this funding helps sustain it.

Indigenous health initiatives: $45 million over three years for Indigenous health initiatives prioritizing care in rural, remote, and First Nations, Metis, and Inuit communities.

Emergency services: Public Safety and Emergency Services receives $1,312 million in operating expense, including continued wildfire preparedness funding. After the devastating 2024 wildfire season, disaster preparedness remains critical for rural communities.

What's Missing

No broadband expansion announcement: Despite rural connectivity being a persistent challenge, Budget 2025 does not announce a new broadband infrastructure program for underserved rural areas.

No rural childcare expansion: The budget does not specifically address childcare availability in rural communities where provider options are limited.

No rural transit support: Beyond the low-income transit funding, there is no new initiative for rural public transportation or inter-community transit links.

No rural economic diversification fund: While agriculture and energy investments continue, there is no dedicated program for rural economic diversification beyond these traditional sectors.

No specific wildfire resilience program: Despite three expensive fire seasons in recent years, the budget does not announce a dedicated rural wildfire resilience or FireSmart community funding program beyond the contingency.

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	Rural Health Action Plan continues implementation
2025-26	New primary care physician compensation model available
2025-26	Education property tax increase takes effect
2025-28	$2.5B in highway and bridge projects roll out
2027	Rural Health Action Plan concludes (2024-2027)

Where to Get Help

• Alberta Health: For Rural Health Action Plan updates. Call Health Link at 811.
• Alberta Municipal Affairs: For LGFF allocations and municipal program information. Call 310-0000 then 780-427-2225.
• Alberta Transportation and Economic Corridors: For highway construction schedules. Call 310-0000 then 780-427-2731.
• Alberta Agriculture and Irrigation: Call 310-FARM (3276) for agricultural program information.
• Your municipality: Contact your local council for information on LGFF-funded projects in your community.
• Your MLA: Contact your local Member of the Legislative Assembly to advocate for rural priorities.