Alberta Budget 2025: Big City Municipality Stakeholder Brief

Executive Summary

Budget 2025 delivers transformative capital investment for Alberta's big cities, headlined by $2.86B for Edmonton and Calgary LRT projects, $485M for Deerfoot Trail upgrades in Calgary, and $100M for Edmonton and Calgary Ring Roads. The $655M Affordable Housing Partnership Program and $220M in homelessness support address urgent housing challenges. However, big cities must contend with education property tax rates increasing after the 2024-25 freeze, rising unemployment driving social service demand, and tariff-driven construction cost inflation that reduces the purchasing power of capital grants. The combined LGFF allocation of $2.49B over three years and grants in place of taxes increasing to 100% by 2026-27 provide important revenue support.

Top 5 Relevant Budget Measures

1. Edmonton and Calgary LRT at $2,863M over three years -- $772M in 2025-26, $1.095B in 2026-27, $996M in 2027-28. This combined provincial and federal investment supports the largest transit infrastructure projects in Alberta history and enables transit-oriented development.

2. Deerfoot Trail Upgrades at $485M -- $197M in 2025-26, $139M in 2026-27, $149M in 2027-28. This addresses the most congested highway corridor in Calgary, improving safety and mobility for hundreds of thousands of daily users.

Education property tax at $3,124M -- an increase after the 2024-25 freeze, with rates adjusted so EPT covers 31.6% of Education's operating expense in 2025-26 and moves toward one-third. EPT is forecast to reach $3,576M by 2027-28, growing faster than the underlying assessment base.

Affordable Housing Partnership at $655M over three years -- with accelerating investment from $157M in 2025-26 to $293M in 2027-28. Combined with ASHC operating programs at $343M including rental assistance and the Indigenous Housing Capital Program at $92M.

Homelessness and outreach support at $220M -- a decrease of $4M from the 2024-25 forecast of $224M. In the context of rising unemployment (7.4%) and continued population growth, this allocation may be insufficient for the demand in Calgary and Edmonton.

Risks

Education property tax escalation. EPT rates are increasing after the 2024-25 freeze, with revenue rising from $2.73B to $3.12B in 2025-26 and $3.58B by 2027-28. This limits the tax room available to municipalities and may create political resistance to municipal property tax increases.

Homelessness service demand. Rising unemployment to 7.4%, tariff-driven economic disruption, and continued population growth create increased demand for homelessness services precisely when the budget allocation is flat or declining. The $38M added for income support in anticipation of tariff impacts may not flow through to municipal service providers.

LRT cost escalation. Major transit projects are vulnerable to construction cost inflation from tariffs, labour shortages, and supply chain disruptions. If LRT project costs exceed budget, the provincial-municipal cost-sharing framework may require additional municipal contribution.

Social housing wait lists. Despite the $655M Affordable Housing Partnership, the pace of new unit delivery may not keep pace with growing wait lists. Construction timelines, tariff-driven cost increases, and land availability in big cities constrain delivery speed.

Transit ridership recovery. LRT investment assumes ridership growth that justifies the capital expenditure. If remote work patterns persist or economic conditions reduce commuting, the ridership and revenue projections may not materialize as quickly as projected.

Opportunities

Transit-oriented development. LRT construction at $2.86B creates station areas and corridors suitable for higher-density, mixed-use development. Cities can leverage transit investment to attract private development, increase assessment values, and create complete communities along transit lines.

Deerfoot Trail transformation. The $485M Deerfoot Trail investment addresses Calgary's most congested corridor. Improved traffic flow benefits economic productivity, reduces commute times, and opens adjacent land for development.

Affordable housing delivery. The $655M Affordable Housing Partnership creates opportunities for cities to lead development of mixed-income, transit-connected housing. When combined with municipal land contributions and zoning flexibility, this program can deliver units more efficiently than government-only approaches.

Grants in place of taxes. Edmonton and Calgary host significant provincial government properties. The increase to 75% in 2025-26 and 100% by 2026-27 provides meaningful new revenue -- potentially tens of millions annually for cities with major government campuses.

Event infrastructure. The Calgary River District and Event Centre at $173M and Edmonton Event Park at $52M support economic development, tourism, and community amenity investment in both cities.

Likely Government Intent

The government recognizes that Edmonton and Calgary drive the majority of Alberta's economic growth and absorb most population increases. The scale of LRT and highway investment reflects pragmatic acknowledgment that urban mobility is essential for economic productivity. The affordable housing investment responds to growing public concern about housing costs. The education property tax increase signals that the government expects municipalities and property taxpayers to share the cost of education funding growth. The government is balancing urban investment needs against deficit constraints, using a mix of capital grants and property tax revenue tools.

Immediate Questions to Ask Ministries

1. Transportation and Economic Corridors: What is the LRT funding flow schedule for 2025-26, and what reporting requirements apply to provincial capital grant disbursements?

2. Municipal Affairs: How will the LGFF formula adjustment affect allocations for Edmonton and Calgary relative to other municipalities?

3. Seniors, Community and Social Services: What are the application criteria and timelines for the Affordable Housing Partnership Program, and how are big city proposals evaluated?

4. Treasury Board and Finance: What is the methodology for increasing education property tax rates, and how will rate changes be communicated to municipalities and taxpayers?

5. Infrastructure: What provincial support is available if LRT project costs escalate beyond current estimates due to tariff-driven construction inflation?

48-Hour Action Checklist

• Model LGFF allocation and education property tax impact on 2025-26 municipal budget
• Review LRT project milestones and provincial funding flow requirements
• Assess Deerfoot Trail and Ring Road project impacts on municipal traffic management
• Contact Municipal Affairs and Transportation for post-budget briefings on urban programs
• Brief council on key budget measures including EPT increases and capital investment
• Identify priority projects for Affordable Housing Partnership applications
• Calculate grants in place of taxes revenue increase from 50% to 75% threshold

30-Day Monitoring Checklist

• Track education property tax rate announcements and requisition amounts
• Prepare Affordable Housing Partnership project applications with development partners
• Monitor LRT construction progress and cost status reports
• Engage AUMA big city caucus on collective advocacy priorities
• Assess homelessness service demand data against budget allocation
• Review transit ridership data for LRT investment justification
• Track event infrastructure project procurement for Calgary and Edmonton

Suggested Message Frames

Frame 1 -- Urban Growth Engine: Edmonton and Calgary are the engines of Alberta's economic growth, absorbing the majority of new residents and driving job creation. Provincial investment in LRT, housing, and infrastructure is investment in Alberta's economic capacity and competitiveness.

Frame 2 -- Transit-Oriented Development: The $2.86B LRT investment is a once-in-a-generation opportunity to reshape urban mobility, reduce congestion, and create transit-oriented communities. This investment generates returns through private development, increased property values, and reduced transportation costs.

Frame 3 -- Housing Partnerships: Alberta's big cities face the greatest housing affordability pressures and the largest wait lists. The Affordable Housing Partnership program enables cities to leverage their land, planning authority, and development expertise alongside provincial and private sector investment.

Opposition Narratives to Anticipate

"Big cities get too much of the capital plan." Counter that Edmonton and Calgary house the majority of Alberta's population and drive the majority of economic growth. Per-capita allocation actually leaves big cities underserved relative to their infrastructure needs and tax contribution.

"LRT projects are over-budget and behind schedule." Acknowledge the challenges of major infrastructure delivery while pointing to long-term economic and mobility benefits. Advocate for cost management improvements and transparent reporting.

"Education property tax increases are hidden taxes." Clarify the provincial-municipal tax relationship and advocate for transparent communication about EPT rate changes. Cities should not be blamed for provincial property tax decisions.

Data Points to Monitor

• LRT project cost reports and milestone tracking for Edmonton and Calgary
• Education property tax rate announcements and requisition calculations
• Affordable Housing Partnership program applications and approvals
• Homelessness service demand data and shelter utilization rates
• Transit ridership data for existing and planned LRT lines
• Construction cost indices for urban infrastructure projects
• LGFF allocation notices and formula details
• Grants in place of taxes implementation and revenue impact
• Event infrastructure project procurement milestones
• Population growth data for Edmonton and Calgary metropolitan areas