Budget 2025: What It Means for Startups

The Bottom Line

Budget 2025 increases the Technology and Innovation operating budget to $834 million and continues the Innovation Employment Grant (IEG) that supports R&D hiring. Capital investment in technology reaches $698 million over three years, and Alberta's low-tax pitch strengthens with the new 8% income tax bracket. But Alberta Innovates funding is set to decline after 2025-26, the economy faces headwinds from U.S. tariffs, and the 7.4% unemployment rate signals a tougher environment for consumer-facing startups.

Top Measures That Affect You

1. Technology and Innovation operating expense at $834 million in 2025-26, up $33 million from Budget 2024. This funds the ministry that partners with innovators, entrepreneurs, and businesses, and funds research and emerging technologies.

2. Innovation Employment Grant (IEG) continues with a $3 million increase in 2025-26 and $12 million more over the following two years. The IEG supports companies doing research and development in Alberta by providing grants tied to R&D employment.

$698 million over three years in technology capital, the eighth-largest capital plan item by ministry. This includes the Broadband Strategy, government technology modernization, and digital services infrastructure.

New 8% income tax bracket on the first $60,000 of income, effective January 1, 2025. This saves each of your employees up to $750 per year, making Alberta an even more attractive talent market compared to other provinces.

$48 million in Broadband Strategy capital grants in 2025-26 (re-profiled from 2024-25), supporting connectivity infrastructure that benefits tech companies in smaller centres.

Film and Television Tax Credit at $235 million over three years. If your startup operates in creative technology, media, or digital content, this credit remains available, though it decreases by $10 million in 2025-26.

Investment and Growth Fund at $45 million over three years, supporting economic diversification and business attraction.

Direct Financial Impact

Innovation Employment Grant: If you employ people doing R&D in Alberta, the IEG provides grants based on eligible expenditures. With total IEG funding growing by $15 million over three years, more support is available. Contact Technology and Innovation for current rates and eligibility.

Corporate income tax: Alberta's 8% corporate income tax rate remains the lowest among major provinces. The budget does not change this rate. Combined with no provincial sales tax, Alberta's overall tax burden stays among Canada's lowest.

Personal income tax for talent: The new 8% bracket on the first $60,000 means your employees keep more of their pay. This is a competitive advantage when recruiting talent from other provinces. Someone earning $80,000 in Alberta now saves up to $750 more per year compared to the old rate structure.

Alberta Innovates: The budget does not break out specific Alberta Innovates funding, but the Technology and Innovation ministry shows operating expense declining by $53 million after 2025-26 over the following two years, largely from Alberta Innovates reductions. If you rely on Alberta Innovates grants, accelerators, or programs, this declining trajectory matters.

Economic context: GDP growth is forecast at 1.8% (down from 3.0%), unemployment at 7.4%, and CPI inflation at 2.6%. Consumer spending may be softer, though Alberta is expected to outperform other provinces due to energy sector resilience.

Service Changes

Technology modernization: The province is investing in reducing vulnerability to cyberattacks, application sustainment, modern digital services, and cloud-based platforms. This government investment creates procurement opportunities for Alberta-based tech firms.

Clean Hydrogen Centre of Excellence: $10 million over 2025-26 and 2026-27 through Technology and Innovation for this initiative. If your startup is in the clean hydrogen space, this is directly relevant.

Invest Alberta Corporation: Funded at $17 million per year for investor and business attraction. The Corporation serves as a gateway for startups looking to attract international capital and customers to Alberta.

Skills and training programs: $193 million over three years for skills and training, which helps build the talent pipeline for your workforce. Skilled trades programs at $135 million per year focus on labour shortages.

Healthcare card modernization: $4 million over three years allocated for modernization, representing a smaller-scale government digital project.

Alberta is Calling Moving Bonus: $11 million increase to attract workers to Alberta, which benefits startups competing for talent.

What's Missing

No startup-specific tax credit: Unlike some provinces, Alberta does not offer a startup-specific or angel investor tax credit. The IEG supports R&D, but there is no targeted incentive for early-stage companies or their investors.

Alberta Innovates declining: The projected $53 million decline in Alberta Innovates-related spending after 2025-26 could reduce the availability of grants, accelerator programs, and mentorship supports that many startups depend on.

No venture capital co-investment program: The budget does not include a government-backed venture capital fund or co-investment program to match private capital for startups.

Data centre and AI policy not detailed: Despite growing interest in Alberta as a data centre hub, the budget does not detail specific incentives or regulatory frameworks for AI companies or data centre operators at the startup scale.

Digital procurement targets: While the government is investing in technology modernization, the budget does not set targets for procurement from Alberta-based tech companies or startups.

No remote work or distributed workforce incentives: Despite the broadband strategy, there are no specific programs to support startups building remote or distributed workforces across rural Alberta.

Key Dates

Date	What Happens
January 1, 2025	New 8% tax bracket takes effect for employees
April 1, 2025	New fiscal year; Technology and Innovation budget takes effect
2025-26	IEG increases by $3M
2025-26	$48M Broadband Strategy capital grants flow
2025-26 to 2027-28	$698M in technology capital invested
After 2025-26	Alberta Innovates funding projected to decline by $53M
2025-26 to 2027-28	$235M Film and Television Tax Credit available

Where to Get Help

Innovation Employment Grant: Contact Technology and Innovation for eligibility and application details. Visit alberta.ca/innovation-employment-grant.

Alberta Innovates: For grants, accelerators, and entrepreneurship programs, visit albertainnovates.ca.

Invest Alberta Corporation: For investment attraction and business support, visit investalberta.ca.

Film and Television Tax Credit: Contact Jobs, Economy and Trade for eligibility details.

Income tax information: Contact Alberta Treasury Board and Finance at 780-427-5364 (toll-free: 310-0000 then 780-427-5364).

Budget documents: Full details at alberta.ca/budget-documents.