Budget 2025: What It Means for Teachers

The Bottom Line

Budget 2025 increases K-12 education operating expense by 4.5% to $9,883 million, adds $55 million for classroom complexity (rising to $94 million per year in subsequent years), and commits $814 million over three years for enrolment growth. The funding formula is being revised to be more responsive to rapid-growth schools. However, collective bargaining is ongoing with no specific teacher salary increase announced, and the funding growth still needs to keep pace with a rapidly growing student population.

Top Measures That Affect You

1. Education operating expense rises to $9,883 million, an increase of $426 million or 4.5% from the 2024-25 third quarter forecast. Operating expense grows another $825 million by 2027-28 (averaging 4.1% per year).

2. $814 million over three years for K-12 enrolment growth. This includes $54 million in additional funding in 2025-26 for projected enrolment above what was already announced, and $348 million more over the following two years.

$55 million in 2025-26 for classroom complexity, including training and hiring more educational assistants and specialists. This grows to $94 million added in each of 2026-27 and 2027-28, recognizing the increasing diversity and complexity in your classrooms.

$1.6 billion budgeted for specialized learning needs in 2025-26, including Specialized Learning Supports, Program Unit Funding, English as an Additional Language, Refugee Students, and First Nations, Metis and Inuit student programs.

Revised funding formula: School authority funding will now be based on two years of enrolment data instead of three, making it more responsive to rapid-growth areas while shielding boards with declining enrolment. This means $55 million in additional formula funding in 2025-26 and $94 million in each subsequent year.

$2.6 billion over three years for school construction, up $505 million from Budget 2024. The School Construction Accelerator Program aims to deliver over 200,000 new and modernized student spaces over the next seven years. This means new schools and expanded facilities for your growing classes.

New 8% income tax bracket on the first $60,000 of income saves you up to $750 per year, effective January 1, 2025. Most teachers will see this on paycheques after July 1, 2025.

Direct Financial Impact

Income tax savings: The new 8% bracket on the first $60,000 of taxable income saves you up to $750 in 2025. If you earn under $60,000, your provincial income taxes fall by about 20%. If you earn above $60,000, you still save the maximum $750. For a two-teacher household, that is up to $1,500 combined.

Salary and compensation: Collective bargaining is currently underway. The budget sets aside a $4 billion contingency partly earmarked for compensation pressures across the public sector. School jurisdictions' total employee compensation is budgeted at $7,537 million in 2025-26, up from $7,160 million in 2024-25 (a 5.3% increase). However, no specific per-teacher salary increase has been announced. The outcome depends on bargaining.

Classroom support: The $55 million classroom complexity funding means more educational assistants and specialists in your school, which should reduce the non-instructional demands on your time.

Education property tax: After being frozen in 2024-25, education property tax rates are rising. If you own your home, expect a modest increase in your property tax bill.

Service Changes

Funding formula changes: The shift from a three-year to a two-year enrolment data basis for the funding formula directly affects how much money your school board receives. Rapid-growth boards get faster recognition of their student population increases. Boards with declining enrolment are shielded from sudden drops. Additional rate increases result in $48 million in 2025-26, $133 million in 2026-27, and $208 million in 2027-28.

School Construction Accelerator Program (SCAP): Budget 2025 advances 22 school projects to the next construction stage with an additional $618 million over three years. Another $150 million expands the Modular Classroom Program for urgent needs. Planning and design for 30 new schools and eight modernization projects receives $62 million. Charter school expansion gets $12 million.

Operations and maintenance: Funding increases by $25 million in 2025-26, $34 million in 2026-27, and $31 million in 2027-28, covering rising costs of maintenance, insurance, and utilities to keep your school safe and operational.

Career education: $102 million over three years supports hands-on learning opportunities for students developing skills for daily application.

Mental health classrooms: Expanding from 20 to 60 locations, providing clinical support to students with complex mental health needs. This should give you access to more specialized support for students in crisis.

What's Missing

No specific teacher pay increase: With collective bargaining underway, the budget avoids announcing a figure. The $4 billion contingency provides room, but the actual outcome is uncertain. Total school jurisdiction compensation budgets grow by 5.3%, but this includes new hires to handle enrolment growth, not just pay increases for existing teachers.

Class size limits not addressed: Despite the classroom complexity funding, the budget does not mandate class size caps. The additional educational assistants and specialists are welcome, but the fundamental issue of student-to-teacher ratios is left to school boards.

Teacher recruitment and retention: While the budget funds enrolment growth, there is no dedicated recruitment or retention strategy for teachers. The focus on skilled trades and health care workforce development does not extend to a teacher-specific pipeline program.

Substitute teacher funding not specified: The budget does not break out funding for substitute teachers, which has been a persistent pressure point across the province.

Professional development: No new dedicated funding for teacher professional development is identified, beyond what is embedded in school board operating budgets.

Inflation erosion: The 4.5% operating expense increase modestly exceeds population growth plus the 2.6% CPI inflation projection, but rapid enrolment growth means per-student funding increases are more modest than the headline number suggests.

Key Dates

Date	What Happens
January 1, 2025	New 8% tax bracket takes effect
After July 1, 2025	Tax cut visible on teacher paycheques
April 1, 2025	New fiscal year; revised funding formula takes effect
2025-26	$55M classroom complexity funding begins
2025-26	$54M additional enrolment growth funding flows
2025-26 to 2027-28	$814M cumulative enrolment growth funding
2025-26 to 2027-28	$2.6B for school construction through SCAP
2025-26 to 2031-32	200,000+ new and modernized student spaces targeted

Where to Get Help

School board funding inquiries: Contact your local school board or the Alberta School Boards Association for details on how the revised formula affects your jurisdiction.

Collective bargaining updates: Contact the Alberta Teachers' Association for the latest on negotiations and compensation outcomes.

Income tax: The new bracket applies automatically. File your return to benefit. Contact Alberta Treasury Board and Finance at 780-427-5364 (toll-free: 310-0000 then 780-427-5364).

Classroom complexity supports: Ask your school administration about the additional educational assistants and specialists being funded in 2025-26 through the $55 million allocation.

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