Budget 2025: What It Means for Innovation / Tech
Alberta Budget 2025 invests $698M in tech capital led by broadband, $834M in operating for innovation, but spending drops sharply after 2025-26.
Technology & Innovation Operating
$834M
+$42M (+5.3%)
Tech Capital Plan (3yr)
$698M
Front-loaded
Alberta Broadband Strategy
$301M
3-year investment
Innovation Employment Grant
$117.9M
R&D tax credit
Sector Impact Summary
Alberta's innovation and technology sector receives a layered investment in Budget 2025 that combines direct ministry spending, tax incentives, broadband infrastructure, and government digital modernization. The Ministry of Technology and Innovation has an operating budget of $834 million in 2025-26, up $42 million (5.3%) from the prior year, with total expense of $1,010 million. The capital plan allocates $698 million over three years, dominated by the Alberta Broadband Strategy and government IT modernization programs.
The budget's technology ambitions extend beyond the dedicated ministry. The $117.9 million Innovation Employment Grant provides tax credits for research and development. The Film and Television Tax Credit allocates $235 million over three years to attract creative industry production. Alberta Innovates, the province's research and innovation agency, has a budget of $604 million, though this faces reductions in subsequent years.
The most significant risk for the sector is that capital spending is heavily front-loaded: it drops from $282 million in 2025-26 to just $81 million by 2027-28 as broadband and digital programs wind down. This raises questions about the sustainability of the technology investment beyond the initial push.
Key Budget Measures
Alberta Broadband Strategy
The largest single technology capital investment is the $301 million Alberta Broadband Strategy, which will expand high-speed internet access to rural and underserved communities across the province. This investment is concentrated in the first two years ($106 million in 2025-26 and $194 million in 2026-27), with no allocation in 2027-28. Broadband connectivity is foundational to enabling remote work, digital health services, precision agriculture, and economic participation in communities that currently lack reliable internet.
Innovation Employment Grant
The Innovation Employment Grant provides $117.9 million in tax credits to support research and development activities in Alberta. This is the province's primary incentive for private-sector R&D and is intended to attract and retain technology-intensive businesses.
Alberta Innovates Corporation
Alberta Innovates receives a budget of $604 million for 2025-26 to support the research and innovation ecosystem. However, this faces a reduction of approximately $53 million over the following two years, which could weaken the province's research pipeline and technology commercialization capacity.
Digital Accelerator Program
The $93 million Digital Accelerator Program (over three years) supports modernization of government digital service delivery and the adoption of cloud-based platforms across ministries.
Government IT Modernization
Several capital programs address government IT infrastructure needs:
- One IMT Enterprise Priorities: $118 million over three years
- One IMT Critical Infrastructure: $67 million over three years
- Mainframe Modernization: $22 million over three years
- Mental Health and Addiction Digital Infrastructure: $32 million over three years
- Justice Legacy Systems Replacement: $11 million over three years
These programs collectively address the government's aging IT systems, reduce cybersecurity vulnerabilities, and support the digital needs of the health system restructuring and other modernization initiatives.
Film and Television Tax Credit
The Film and Television Tax Credit receives $235 million over three years (approximately $95 million budgeted for 2025-26, decreasing by $10 million thereafter). This credit continues to attract production activity to Alberta, supporting both the creative economy and the broader technology and services ecosystem.
Alberta Enterprise Corporation
The Alberta Enterprise Corporation, which operates as a venture capital fund-of-funds supporting technology startups, receives $13 million in 2025-26.
Investment and Growth Fund
The $45 million Investment and Growth Fund over three years supports business investment and economic diversification efforts.
Funding Changes
| Category | 2024-25 Forecast | 2025-26 Estimate | Change |
|---|---|---|---|
| Technology and Innovation Total Expense | $930M | $1,010M | +$80M (+8.6%) |
| Technology and Innovation Operating | $792M | $834M | +$42M (+5.3%) |
Source: Fiscal Plan 2025-28, Expense, p. 91.
The total expense increase of $80 million is notable, but the trajectory reverses sharply: total expense declines to $917 million by 2027-28 as capital programs conclude.
Capital Investment
The Technology and Innovation capital plan totals $698 million over three years, but the year-by-year profile reveals a steep decline:
| Year | Capital Spending |
|---|---|
| 2025-26 | $282M |
| 2026-27 | $335M |
| 2027-28 | $81M |
This front-loaded pattern reflects the time-limited nature of the broadband strategy and digital accelerator programs. Key capital allocations:
- Alberta Broadband Strategy: $301 million (2 years)
- One IMT Enterprise Priorities: $118 million (3 years)
- Digital Accelerator Program: $93 million (3 years)
- One IMT Critical Infrastructure: $67 million (3 years)
- Mental Health and Addiction Digital Infrastructure: $32 million (2 years)
- Mainframe Modernization: $22 million (3 years)
- Innovation Infrastructure Maintenance: $16 million (3 years)
- SUCH Sector Self-Financed: $28 million (3 years)
Source: Capital Plan Details by Ministry 2025-28.
Risks
Capital Spending Cliff (High). The drop from $282 million to $81 million by 2027-28 means that technology capital investment effectively shrinks by 71% over the plan period. This raises concerns about sustained investment in digital infrastructure, particularly if broadband deployment encounters delays and needs to be extended.
Alberta Innovates Funding Reduction (Medium). The approximately $53 million reduction in Alberta Innovates funding over two years could weaken the province's research and innovation ecosystem at a time when other jurisdictions are increasing their technology investments. This affects everything from basic research to commercialization support.
Tariff Impacts on Technology Supply Chains (Medium). U.S. tariffs of 15% on goods could increase costs for imported technology equipment and components, affecting both government IT modernization and private sector technology investments. Data centre equipment, networking hardware, and semiconductor-dependent products are particularly exposed.
Cybersecurity Vulnerabilities (Medium). The budget acknowledges the need to reduce government vulnerability to cyberattacks through IT modernization, but the declining capital trajectory after 2025-26 could leave cybersecurity investments incomplete.
Brain Drain Risk (Medium). Alberta competes nationally and globally for technology talent. If the innovation ecosystem is perceived as underfunded relative to peer jurisdictions (Ontario, British Columbia), the province risks losing the talent pipeline it has been building.
Opportunities
Rural Broadband Transformation. The $301 million broadband strategy is a generational investment for rural and underserved communities. High-speed internet access enables remote work, telemedicine, digital education, precision agriculture, and e-commerce participation. Five Indigenous communities are among the beneficiaries.
Government Digital Modernization. The combined investment in digital accelerator, IMT platforms, mainframe modernization, and mental health digital infrastructure positions the government to deliver more efficient and accessible services. Cloud-based platforms reduce long-term IT costs and improve resilience.
Clean Technology via TIER. The $10 million over two years for the Clean Hydrogen Centre of Excellence through Technology and Innovation complements broader TIER-funded clean technology development, an area where Alberta has natural advantages in carbon capture and hydrogen production.
Film and Television Industry Growth. The $235 million Film and Television Tax Credit continues to attract production activity, supporting a growing creative economy that employs thousands and brings international investment to Alberta communities.
Tax Competitiveness for Innovation. The Innovation Employment Grant ($117.9 million) combined with Alberta's absence of a provincial sales tax and low corporate income tax rate maintains the province's attractiveness for R&D-intensive businesses looking for cost-competitive jurisdictions.
What's Missing
Budget 2025 does not include a dedicated artificial intelligence strategy despite the rapid growth of AI applications and Alberta's existing academic strengths at the University of Alberta and Amii. There is no specific allocation for quantum computing, semiconductor development, or other frontier technologies that peer jurisdictions are actively funding. The Alberta Enterprise Corporation's $13 million budget is modest relative to venture capital ecosystems in Ontario and British Columbia. There is no tech talent attraction or retention program specific to the innovation sector. Post-2027-28 broadband maintenance and expansion funding is not identified, raising questions about sustainability of the connectivity investment.
Net Assessment
The innovation and technology sector in Budget 2025 receives a mixed assessment. The $301 million broadband strategy is a significant, transformational investment for rural connectivity. The $117.9 million Innovation Employment Grant and $235 million Film and Television Tax Credit maintain Alberta's incentive framework for private-sector innovation and creative industries. Government IT modernization addresses real infrastructure debt and cybersecurity risks.
However, the capital spending cliff from $335 million to $81 million by 2027-28 is a material concern. The Alberta Innovates funding reduction sends a contradictory signal about the province's commitment to its innovation ecosystem. And the absence of a forward-looking strategy for AI, quantum computing, or other emerging technologies leaves Alberta without a clear position in the technology areas most likely to drive economic growth over the next decade.
The sector's trajectory suggests a budget focused on addressing immediate infrastructure needs (broadband, legacy IT systems) rather than building the long-term innovation capacity that would diversify Alberta's economy beyond its traditional resource base.