Alberta Budget 2025: Mining Company Stakeholder Brief

Executive Summary

Alberta Budget 2025 allocates $892 million in operating expense and $387 million in three-year capital investment to the Energy and Minerals ministry. The capital plan is dominated by the Alberta Petrochemicals Incentive Program ($311 million) and carbon capture and storage initiatives ($36 million), with limited direct mining-specific capital allocation. However, the Alberta Energy Regulator is actively developing a mineral strategy and updating unconventional resource reserves assessments, signalling growing government interest in diversifying beyond hydrocarbons. The TIER Fund's $646 million in three-year spending provides potential access to clean technology funding for mining operations. U.S. tariffs at 10% on energy products and 15% on mineral goods create export headwinds.

Top 5 Relevant Budget Measures

1. Energy and Minerals Operating Expense: $892 million -- A $12 million increase from 2024-25, primarily driven by AER expense growth. The Alberta Energy Regulator receives $270 million, up $14 million, with activities including mineral strategy development and unconventional reserves assessment updates.

2. Alberta Petrochemicals Incentive Program: $311 million over three years -- Capital grant funding of $181 million in 2025-26, declining to $61 million and $69 million in subsequent years, primarily supporting the Heartland Petrochemical Complex. This represents the government's most significant resource processing incentive model.

Carbon Capture and Storage: $36 million in 2025-26 -- Final year funding for the Quest and Alberta Carbon Trunk Line CCS projects, which have stored more than 15.6 million tons of carbon dioxide since 2015. Funding agreements end in 2025-26, creating uncertainty about future CCS support.

TIER Fund: $646 million over three years -- Cross-ministry spending on emissions reduction, clean technology, and climate adaptation. Includes $40 million through Energy and Minerals for two CCS projects. The TIER Regulation covers about 60% of Alberta's total carbon emissions across roughly 600 regulated facilities.

Orphan Well Association: $145 million in 2025-26 -- Growing to $166 million by 2027-28, with an updated reclamation cost model indicating levy increases are necessary. While focused on oil and gas, this regulatory approach could foreshadow similar frameworks for mining site reclamation.

Risks

The tariff environment creates a layered risk for mining operations. Energy products face a 10% U.S. tariff, while mineral goods fall under the broader 15% tariff on all other goods. For mining companies exporting both energy-related minerals (coal, oil sands) and non-energy minerals (potash, lithium, rare earths) to U.S. markets, the combined effect reduces competitiveness. Canadian retaliatory tariffs may also increase costs for imported mining equipment and supplies sourced from U.S. manufacturers.

The lower oil price forecast (US$68/bbl, down from US$74/bbl) reduces overall resource sector activity and investment sentiment, even though mining and hydrocarbon extraction are distinct industries. The wider light-heavy oil price differential ($17.10/bbl) signals broader market volatility that can spill over into mining sector financing and investment decisions.

The AER expense increase of $14 million to $270 million signals heightened regulatory activity. While the mineral strategy development is a positive signal, the additional enterprise projects and staffing costs suggest more complex regulatory processes that could increase compliance timelines and costs for mining operations.

The conclusion of CCS funding agreements for Quest and ACTL in 2025-26 creates uncertainty about the government's future commitment to carbon management technology support. Mining operations considering CCS integration need clarity on whether new incentive programs will replace the expiring agreements.

The Orphan Well Association model, where industry levy increases are driven by updated reclamation cost models, could foreshadow similar cost-recovery frameworks for mining reclamation. The explicit statement that levy increases are necessary represents a fiscal philosophy of industry-funded environmental liability management.

Opportunities

The mineral strategy development at the AER is the most significant strategic opportunity. This process allows mining companies to shape the regulatory framework, permitting processes, and potentially incentive structures for Alberta's minerals sector. Early and substantive engagement in this development process is essential.

The TIER Fund's $646 million three-year spending envelope provides meaningful access to clean technology funding. Mining operations investing in electrification, emissions reduction, water treatment, or energy efficiency improvements should assess TIER eligibility. The fact that TIER spending is distributed across multiple ministries means mining companies may need to engage with both Energy and Minerals and Environment and Protected Areas.

The Alberta Petrochemicals Incentive Program model demonstrates the government's willingness to provide significant capital incentives ($311 million) for resource processing investment. Mining companies should advocate for a parallel incentive structure for critical mineral processing, leveraging the same economic diversification and supply chain security arguments.

The Alberta Carbon Capture Incentive Program, forecast to receive $173 million in new TIER-funded grants over the next three years, represents potential funding for mining operations incorporating carbon management into their processes.

The global shift toward critical minerals for energy transition and supply chain security creates a favourable macro environment for Alberta mining investment. The government's stated commitment to promoting Alberta as a reliable resource partner internationally aligns with mining sector growth objectives.

Likely Government Intent

The government is maintaining the Energy and Minerals ministry as a revenue-generating and investment-attracting portfolio. The mineral strategy development signals an intent to diversify beyond hydrocarbons without abandoning the core oil and gas regulatory framework. The AER is being positioned as a comprehensive resource regulator, not just an oil and gas regulator.

The phase-out of CCS funding agreements for Quest and ACTL, combined with continued TIER Fund support, suggests a transition from direct project funding to a market-based carbon management system where industry bears more of the cost through compliance payments and credit trading.

The government's broader fiscal posture of restraint means that new mining-specific incentive programs are unlikely without sustained advocacy demonstrating the economic diversification value.

Immediate Questions to Ask Ministries

1. What is the timeline and consultation process for the Alberta mineral strategy development? When will draft regulatory frameworks be available for industry review?

2. How will TIER Fund spending be allocated to mining sector projects? What is the application process and timeline for TIER-funded clean technology grants?

3. Will the government introduce a successor incentive program for carbon capture and storage after the Quest and ACTL agreements conclude?

4. What does the AER's unconventional resource reserves assessment update mean for mineral rights and exploration permitting?

5. How is the government positioning Alberta's critical minerals in international trade diversification discussions?

48-Hour Action Checklist

• Request a briefing from Energy and Minerals on the mineral strategy development timeline and consultation process
• Assess the 10-15% tariff impact on mineral and energy exports to the United States
• Review TIER Fund eligibility criteria for mining sector emissions reduction and clean technology projects
• Prepare a statement positioning critical mineral development as central to Alberta's economic diversification
• Contact the AER regarding the scope and timeline of the unconventional resource reserves assessment update

30-Day Monitoring Checklist

• Submit formal input to the mineral strategy development process through the AER consultation framework
• Engage with Environment and Protected Areas on the Southern Alberta Groundwater Evaluation and implications for mining water use
• Monitor AER staffing and enterprise project timelines for regulatory process impacts on mining permits
• Track the evolution of carbon capture incentive programs post-Quest and ACTL funding completion
• Coordinate with Transportation and Economic Corridors on resource road infrastructure needs for mining operations
• Assess Innovation Employment Grant applicability for mining technology modernization projects
• Monitor TIER Fund revenue forecasts ($409 million in 2025-26) and their impact on available grant funding

Suggested Message Frames

Frame 1 -- Supply Chain Security: "Alberta's critical minerals are essential to North American supply chain security. Budget 2025's mineral strategy development is a step forward, but we need dedicated capital incentives to compete globally for mining investment."

Frame 2 -- Clean Technology Access: "The mining sector is ready to invest in clean technology. With $646 million in TIER Fund spending over three years, we need clear eligibility pathways for mining operations to access these funds."

Frame 3 -- Incentive Parity: "Alberta's proven incentive model for petrochemicals should be extended to critical minerals. The same logic that attracted billions in petrochemical investment applies to mining."

Opposition Narratives to Anticipate

Environmental critics will argue that expanding mining activity without robust environmental assessment creates new reclamation liabilities, pointing to the Orphan Well Association's increasing costs as evidence of what happens when industry grows faster than reclamation obligations. Opposition parties may argue the government is prioritizing hydrocarbon extraction over genuine economic diversification through mining and mineral processing. Climate advocates will scrutinize any TIER Fund spending on mining as potentially inconsistent with emissions reduction goals.

Mining companies should be prepared to demonstrate environmental leadership, commitment to reclamation, and alignment with clean technology objectives when engaging in public discourse about sector expansion.

Data Points to Monitor

• Mineral strategy development milestones and AER consultation schedule
• U.S. tariff implementation on mineral products, including any critical mineral exemptions
• TIER Fund revenue and grant allocation decisions
• AER permitting timelines and processing capacity for mineral exploration applications
• Carbon capture incentive program evolution after Quest and ACTL agreement conclusions
• Critical mineral commodity prices and global supply chain policy developments
• Orphan Well Association levy rate changes as a potential indicator for mining reclamation funding models
• Transportation corridor development decisions affecting mineral export logistics