Alberta Budget 2025: Environmental NGO Stakeholder Brief

Executive Summary

Alberta Budget 2025 allocates $514 million in operating expense to Environment and Protected Areas, a $106 million increase from 2024-25, and $231 million in three-year capital investment. The TIER Fund accounts for much of the operating increase, with $646 million in cross-ministry spending over three years supporting emissions reduction and clean technology. However, TIER revenue is declining as regulated facilities choose performance credits over cash payments, falling from $409 million in 2025-26 to $271 million in 2026-27. The conclusion of carbon capture funding agreements for Quest and ACTL in 2025-26, combined with no announced successor program, creates a gap in Alberta's most visible climate technology support. The budget invests $75 million in flood and drought mitigation but does not announce new protected area designations or comprehensive climate adaptation programming.

Top 5 Relevant Budget Measures

1. TIER Fund: $646 million in three-year spending -- Cross-ministry emissions reduction spending including $40 million for carbon capture in Energy and Minerals, $10 million for the Clean Hydrogen Centre of Excellence in Technology and Innovation, $11 million for Coal Workforce Transition in Jobs, Economy and Trade, and significant spending through Environment and Protected Areas on climate technology, monitoring, and adaptation.

2. Environment and Protected Areas Operating: $514 million -- A $106 million increase from 2024-25, primarily driven by revised TIER revenue forecasts that shift expense into 2025-26. Also includes $25 million per year for surface rights compensation payments now budgeted for the first time.

Flood and Drought Mitigation: $75 million over three years -- Renewed capital funding at $25 million per year for infrastructure projects that reduce flood and drought risk. Supplemented by the $62 million Springbank Off-Stream Reservoir (SR1) project and $164 million in water management infrastructure through Transportation.

Alberta Carbon Capture Incentive Program: $173 million forecast -- Available from TIER Fund by end of 2024-25, with additional allocations over the next three years. This program provides grants for future carbon capture projects after the Quest and ACTL agreements conclude.

Designated Industrial Zone Pilot: $38 million over three years -- A new capital initiative ($18 million in 2025-26) that concentrates industrial development in designated zones with integrated environmental management. This could improve environmental oversight in industrial areas or enable new development in sensitive regions.

Risks

TIER Fund revenue is structurally declining. Revenue is forecast at $409 million in 2025-26, dropping to $271 million in 2026-27 before partially recovering to $313 million in 2027-28. The decline is driven by regulated facilities choosing to use accumulated performance credits rather than make cash compliance payments. While credit use is a design feature of the TIER system, it reduces available revenue for emissions reduction programming. The fiscal plan notes that the approaching expiration date of credits may reverse this trend, but the timing and magnitude are uncertain.

The conclusion of CCS funding agreements for Quest and ACTL represents the end of Alberta's most visible carbon capture partnerships. These projects have stored more than 15.6 million tons of CO2 since 2015. While the Alberta Carbon Capture Incentive Program provides a potential successor mechanism, the transition creates uncertainty about the pace and scale of new CCS investment.

The Designated Industrial Zone pilot ($38 million) warrants careful monitoring. While integrated environmental management within industrial zones can improve oversight, the concentration of industrial activity in designated areas may reduce environmental review requirements or enable development in areas with sensitive ecosystems or water resources.

No new protected area designations or expansions are announced in the budget. With Alberta's population growing at 2.5% and recreational demand increasing, the pressure on natural landscapes continues to grow without corresponding expansion of protected areas.

The $26 million reduction in Forestry and Parks innovation, education, and research over three years removes funding that supported environmental education, sustainable land management research, and conservation-focused extension activities.

Opportunities

The $646 million in TIER Fund spending over three years represents the largest pool of dedicated environmental and climate funding in the budget. Environmental NGOs should engage actively in TIER allocation decisions, advocating for spending priorities that maximize genuine emissions reductions rather than industry cost minimization.

The $75 million flood and drought mitigation program, combined with the Springbank Off-Stream Reservoir ($62 million) and water management infrastructure ($164 million), represents more than $300 million in water management investment. These investments are climate adaptation measures that protect communities and ecosystems from increasingly volatile precipitation patterns.

The $15 million Alberta Land Trust Grant Program over three years supports land conservation through trust partnerships. Environmental NGOs with land conservation mandates can access this funding for conservation easements and habitat protection.

The expanded Aquatic Invasive Species program ($4 million annually) addresses a direct threat to Alberta's freshwater ecosystems, with expanded watercraft inspection stations and conservation K9 units. This program has strong scientific justification and public support.

The $48 million Raven Creek Brood Trout Station investment supports fisheries conservation and represents a significant commitment to aquatic habitat maintenance. The $4 million Fish Culture Capital Maintenance and Renewal Program supplements this investment.

Likely Government Intent

The government is maintaining the TIER regulatory framework as its primary climate policy instrument while transitioning from direct project-level CCS funding to a market-based carbon management system. The government views emissions reduction as an industry responsibility funded through compliance payments, with government's role focused on regulatory design and strategic grant allocation.

Environmental spending increases in 2025-26 are largely technical (TIER revenue timing) and regulatory (surface rights compensation budgeting) rather than programmatic expansions. The government is investing in water management and flood/drought resilience as concrete, visible projects with broad public support, while avoiding new protected area designations or climate-specific policy commitments that carry political risk.

Immediate Questions to Ask Ministries

1. What is the detailed allocation of TIER Fund spending across programs for 2025-26? What criteria determine spending priorities?

2. What is the environmental assessment framework for the Designated Industrial Zone pilot? How will cumulative environmental effects be managed?

3. What successor program or incentive mechanism will replace the Quest and ACTL CCS funding agreements? What is the Alberta Carbon Capture Incentive Program's application process?

4. How will the $75 million flood and drought mitigation program allocate funds across the province? What role will watershed planning play?

5. Is the government considering new protected area designations or expansions? What is the status of regional land-use plan implementation?

48-Hour Action Checklist

• Analyze TIER Fund spending allocations across ministries for alignment with genuine emissions reduction outcomes
• Assess the Designated Industrial Zone pilot project for environmental impact implications and monitoring requirements
• Prepare a public statement on the adequacy of environmental spending relative to climate risk and conservation needs
• Request details on the renewed flood and drought mitigation program criteria and project selection
• Review the Alberta Carbon Capture Incentive Program pipeline and assess implications of Quest/ACTL conclusion

30-Day Monitoring Checklist

• Submit formal input on TIER Fund allocation priorities for the 2025-26 compliance cycle
• Engage with Environment and Protected Areas on the Southern Alberta Groundwater Evaluation methodology
• Monitor AER mineral strategy development for environmental assessment requirements
• Track Emissions Reduction Alberta funding decisions and project approvals for environmental effectiveness
• Coordinate with water conservation organizations on the flood/drought mitigation program
• Assess the Raven Creek Brood Trout Station and fisheries conservation investment priorities
• Monitor land-use planning decisions related to the Designated Industrial Zone pilot

Suggested Message Frames

Frame 1 -- TIER Accountability: "TIER Fund revenue is declining as facilities choose credits over cash payments. Alberta must ensure the emissions reduction investments funded by TIER continue to drive real climate outcomes, not just industry cost avoidance."

Frame 2 -- Climate Adaptation: "The $75 million flood and drought mitigation investment acknowledges our changing climate reality. Alberta needs to build on this with comprehensive climate adaptation planning across all ministries."

Frame 3 -- CCS Continuity: "Carbon capture funding is ending with no clear replacement. Alberta cannot credibly claim climate leadership while winding down its most visible emissions reduction partnerships."

Opposition Narratives to Anticipate

Industry groups will argue that TIER compliance costs are already too high and that declining revenue reflects efficient facility performance rather than a problem. Government supporters will point to the $646 million in TIER spending as evidence of climate commitment. Opposition parties will argue the budget's environmental spending is insufficient given wildfire, drought, and flood risks that cost billions annually. National and international climate advocates will scrutinize the CCS funding conclusion as evidence of declining ambition.

Environmental NGOs should maintain a constructive but evidence-based approach, acknowledging investments like flood mitigation and aquatic invasive species management while clearly articulating gaps in protected area expansion, climate adaptation planning, and TIER revenue sustainability.

Data Points to Monitor

• TIER compliance payment revenue versus credit use data quarterly
• TIER Fund grant allocation decisions and project-level outcomes
• Designated Industrial Zone pilot environmental monitoring data
• Flood and drought mitigation project announcements and watershed assessments
• Alberta Carbon Capture Incentive Program applications and grant awards
• Protected areas acreage data and any new designation announcements
• Wildfire hectares burned and climate-related disaster costs
• Water quality and quantity monitoring data across major watersheds