Budget 2025: What It Means for Mining / Critical Minerals
Alberta Budget 2025 advances the Minerals Strategy with $56.6M for policy development, but dedicated mining capital remains minimal amid coal decline.
Energy and Minerals policy allocation
$56.6M
Supports minerals strategy
Coal royalty revenue
$138M
-$23M from 2024-25
Coal Workforce Transition Program
$11M
Ongoing
Sector Impact Summary
Alberta's mining and critical minerals sector occupies an unusual position in Budget 2025: significant policy momentum and strategic ambition are paired with limited direct financial commitments. The government is continuing to implement the Minerals Strategy and Action Plan to establish Alberta as a preferred producer and supplier of metallic and industrial minerals, with particular emphasis on lithium and other critical minerals needed for the global energy transition. The Alberta Energy Regulator is expanding to full lifecycle regulation of brine-hosted and rock-hosted minerals, signaling the government's seriousness about developing the province's untapped mineral potential.
However, the budget itself provides minimal dedicated capital for mining and critical minerals development. The sector shares the Energy and Minerals ministry's IT and general capital allocation of $40 million over three years, but there is no standalone mining capital program comparable to APIP for petrochemicals or the irrigation investment for agriculture. Department policy activities receive $56.6 million in 2025-26 for research, design, and development of energy, mineral, and subsurface policy, encompassing both traditional energy and emerging mineral resources.
Meanwhile, the coal mining sector continues its structural decline. Rentals, fees, and coal royalty revenue is forecast to fall to $138 million in 2025-26 from $161 million in the prior year, and continues declining to $136 million by 2027-28. The coal phase-out accretion expense of $13 million annually and the $11 million Coal Workforce Transition Program reflect the ongoing managed decline of this subsector. The contrast between coal's sunset and critical minerals' sunrise defines the sector's trajectory.
Key Budget Measures
Minerals Strategy and Action Plan implementation. The government continues implementing its comprehensive strategy to establish Alberta as a preferred producer and supplier of metallic and industrial minerals, unlocking untapped mineral resource potential to meet growing global demand. (Source: Ministry Business Plans 2025-28, Energy and Minerals)
Energy and Minerals policy activities: $56.6 million in 2025-26. Funds research, design, and development of energy, mineral, and subsurface policy, including Alberta's mineral strategy and the Southern Alberta Groundwater Evaluation. (Source: Ministry Business Plans 2025-28, Energy and Minerals)
Rentals, fees, and coal royalty revenue: $138 million in 2025-26. Declining from $161 million in 2024-25, reflecting the ongoing coal phase-out and structural decline in coal production. (Source: Fiscal Plan 2025-28, Revenue tables)
Coal phase-out accretion expense: $13 million annually. Compensation payments to affected coal-fired electricity generators, scheduled for completion by 2030. (Source: Fiscal Plan 2025-28, Expense, p.89)
Coal Workforce Transition Program: $11 million. Funded through Jobs, Economy and Trade to support workers transitioning from coal mining and coal-fired generation. (Source: Fiscal Plan 2025-28, Expense, p.85)
Designated Industrial Zone Pilot Project: $38 million over three years. While primarily positioned for petrochemical investment, the streamlined regulatory zones could also support minerals processing facilities. (Source: Capital Plan Details by Ministry 2025-28)
Funding Changes
| Item | 2024-25 Forecast | 2025-26 Estimate | Change |
|---|---|---|---|
| Coal royalty and rental revenue | $161M | $138M | -$23M |
| Energy and Minerals operating expense | $880M | $892M | +$12M |
| Coal phase-out accretion | ~$13M | ~$13M | Flat |
| Coal Workforce Transition | $11M | $11M | Flat |
(Source: Fiscal Plan 2025-28, Revenue and Expense tables)
Capital Investment
Mining and critical minerals do not have a standalone capital plan line item. Relevant capital allocations are embedded within the Energy and Minerals ministry:
- Energy and Minerals IT and general capital: $40 million over three years ($15M, $15M, $10M). Supports royalty system management, mineral resource assessment, and regulatory technology applicable to both energy and minerals oversight.
- Designated Industrial Zone Pilot Project: $38 million over three years ($18M, $10M, $10M). Could support minerals processing facilities alongside petrochemical operations.
The Alberta Energy Regulator's expanded mandate to regulate emerging resources (brine-hosted and rock-hosted minerals, geothermal) is funded through industry levies rather than direct government capital. (Source: Capital Plan Details by Ministry 2025-28)
Risks
Minimal dedicated capital funding. Unlike petrochemicals (APIP at $311 million) or irrigation ($152 million), mining and critical minerals receive no dedicated capital incentive program. The sector's development relies primarily on regulatory reform, private investment attraction, and the Alberta Energy Regulator's expanded mandate.
Coal royalty revenue structural decline. Rentals, fees, and coal royalty revenue is declining from $161 million to $138 million and forecast to continue falling to $136 million by 2027-28. This represents a permanent erosion of the traditional mining revenue base.
U.S. tariffs on coal and mineral exports. Coal and mineral products face 15% U.S. tariffs, which could reduce export demand for thermal and metallurgical coal products in the near term.
Emerging regulatory framework uncertainty. New regulatory frameworks for emerging resources including brine-hosted minerals, rock-hosted minerals, and geothermal are still being established. While the Alberta Energy Regulator is expanding its mandate, the regulatory details remain in development, creating some uncertainty for investors evaluating Alberta's mineral potential.
Global commodity price volatility. Critical mineral prices are subject to global supply-demand dynamics and geopolitical factors outside Alberta's control. Lithium prices in particular have experienced significant volatility.
Opportunities
Critical minerals development (lithium and others). Alberta's subsurface brines contain significant lithium resources that can potentially be extracted using existing oil and gas infrastructure and expertise. The government is creating a competitive regulatory environment for lithium and other critical minerals development.
Minerals Strategy and Action Plan. The comprehensive strategy aims to establish Alberta as a preferred producer and supplier of metallic and industrial minerals, leveraging the province's geological data, existing infrastructure, and skilled workforce from the oil and gas sector.
Geothermal resource development. New regulatory frameworks for geothermal energy create investment opportunities that leverage existing oil and gas drilling expertise, geological knowledge, and well infrastructure.
Designated Industrial Zones for minerals processing. The $38 million pilot could streamline regulatory processes for minerals processing facilities, reducing development timelines and attracting investment in value-added mineral products.
Oil and gas expertise transfer. Alberta's extensive oil and gas workforce, drilling expertise, and geological data provide a strong foundation for developing subsurface mineral resources, particularly brine-hosted lithium that shares extraction techniques with conventional energy production.
What's Missing
The budget lacks a dedicated critical minerals incentive program comparable to APIP for petrochemicals. There is no capital allocation for mineral exploration or geological survey work beyond general ministry policy activities. The budget does not include specific targets for critical mineral production volumes or timelines. There is no mention of partnerships with critical minerals end-users (battery manufacturers, EV companies) that could anchor demand for Alberta-produced minerals. The coal transition program at $11 million appears modest given the scale of workforce displacement as coal production declines.
Net Assessment
Mining and critical minerals is a sector of significant potential but limited immediate budget impact. The Minerals Strategy and regulatory expansion signal strong government intent, but the absence of dedicated capital funding means development depends primarily on private sector initiative and the pace of regulatory implementation. The sector is in an early-stage development phase where policy frameworks matter more than budget allocations, but competing jurisdictions with more aggressive financial incentives could capture investment that might otherwise flow to Alberta.