Budget 2025: What It Means for Post-Secondary

Sector Impact Summary

Post-secondary education in Alberta presents a study in contrasts under Budget 2025. On the capital side, the government is investing $1,529 million over three years in campus expansions, new facilities, and maintenance, one of the largest post-secondary capital commitments in recent Alberta budgets. On the operating side, Advanced Education expense increases just $7 million (0.1%) to $6,635 million, a figure that is effectively flat and remains at approximately $6,629 million through 2027-28.

This divergence reflects a strategic choice: build the physical capacity for future growth while expecting institutions to manage current operating costs through own-source revenues, which now fund 58% of post-secondary operating expense, up from 53% in 2022-23. Tuition fees are estimated at $2,133 million in 2025-26.

The government's priority investment in the sector is skilled trades, with $135 million annually dedicated to apprenticeship delivery, grants, and adult learning programs that directly address Alberta's labour market shortages. An Expert Panel on Post-secondary System Funding and Competitiveness, appointed in December 2024, will report for Budget 2026, making this a bridge year before potentially significant changes to the funding model.

Key Budget Measures

Skilled Trades Programs

Annual funding of $135 million for skilled trades programs is the standout operating investment. Over the three-year plan, an additional $271 million is allocated in the following two years. This includes apprenticeship delivery, trades grants, and adult learning initiatives, directly targeting the construction, health care, and technology labour shortages that constrain Alberta's growth.

Post-Secondary Operations

Post-secondary institutional operations funding totals $6,021 million in 2025-26. Of this, approximately $2.5 billion comes through government grants, with the remaining $3.5 billion (58%) generated from institutional own-source revenue including tuition, fees, and ancillary services.

First Nations Colleges

The grant to five First Nations colleges in rural and remote Indigenous communities increases by $0.5 million to $4 million per year. While modest in absolute terms, this represents an important commitment to Indigenous post-secondary access, funding additional seats and supporting cultural preservation in community-based settings.

Scholarships and Student Aid

Total scholarships are budgeted at $113 million, with up to $60 million funded from the Alberta Heritage Scholarship Fund. The Alberta Student Grant is increasing by $5 million. At the same time, student aid cost reductions of $117 million are expected over three years from academic progress policies and changes to private career college programming.

Independent Academic Institutions

Grants to independent academic institutions increase by $9 million in 2025-26 with another $17 million over two years, working to close the funding gap between independent and public post-secondary institutions.

Expert Panel on Funding

The Expert Panel on Post-secondary System Funding and Competitiveness was appointed in December 2024 and will provide recommendations for Budget 2026. The panel is expected to benchmark Alberta's post-secondary system against international standards and recommend a more competitive and sustainable funding model. Until its report, the sector operates in a holding pattern.

Funding Changes

Category	2024-25 Forecast	2025-26 Estimate	Change
Advanced Education Total Expense	$7,285M	$7,362M	+$77M (+1.1%)
Advanced Education Operating	$6,628M	$6,635M	+$7M (+0.1%)
Independent Institutions Grants	-	+$9M	New increase
Alberta Student Grant	-	+$5M	Increase

Source: Fiscal Plan 2025-28, Expense, pp. 76-77.

The $77 million increase in total expense is driven primarily by amortization and inventory consumption associated with new capital projects, not operating program expansion. The effectively flat operating budget is the most significant fiscal signal for the sector.

Capital Investment

Post-secondary receives the fifth-largest capital allocation in the budget at $1,529 million over three years. Major projects include:

• SUCH Sector Self-Financed: $561 million over three years for institution-funded capital projects
• Post-Secondary Facilities Capital Maintenance and Renewal: $439 million over three years ($144-148 million per year)
• University of Calgary Multidisciplinary Hub: $125 million over three years
• MacEwan University School of Business (Edmonton): $110 million over three years
• University of Alberta Biological Sciences Centre: $100 million over three years
• Olds College WJ Elliot Expansion and Renovation: $50 million over three years
• NAIT Advanced Skills Centre Planning (Edmonton): $41 million over three years
• University of Lethbridge Rural Medical Teaching School: $39 million over three years
• SAIT Campus Centre Redevelopment (Calgary): $30 million in 2025-26
• Red Deer Polytechnic CIM-TAC East Campus Expansion: $10 million over three years

The capital investment is broadly distributed across the province, with projects in Edmonton, Calgary, Red Deer, Olds, Grande Prairie, Lethbridge, and Fort McMurray. The emphasis on polytechnic and trades-oriented facilities (NAIT, SAIT, Olds, Northwestern, Red Deer) aligns with the skilled trades investment on the operating side.

Source: Capital Plan Details by Ministry 2025-28.

Risks

Flat Operating Expense Growth (High). The 0.1% increase in operating expense does not keep pace with inflation (2.6%) or enrolment growth. Institutions are effectively being asked to absorb cost increases through own-source revenue or internal efficiencies. This creates fiscal pressure that could lead to program reductions, increased class sizes, or further reliance on sessional and contract faculty.

Increasing Reliance on Own-Source Revenue (Medium). With 58% of operating costs funded from own-source revenue (up from 53% in 2022-23), the cost burden is shifting increasingly to students through tuition and fees. International student enrolment, a key revenue source for many institutions, faces headwinds from federal immigration policy changes and the competitive global market.

Expert Panel Uncertainty (Medium). The Expert Panel on Funding and Competitiveness will report for Budget 2026, creating a year of uncertainty about the future funding model. Institutions must plan and invest without knowing whether the funding framework will change significantly, complicating medium-term decision making.

Student Aid Reductions (Low). The $117 million in student aid cost reductions over three years from academic progress policies and private career college changes could affect access for some students, particularly those in non-traditional educational pathways.

Opportunities

Skilled Trades Expansion. The $135 million annual investment in skilled trades programs is one of the most clearly purpose-driven allocations in the budget. Alberta faces documented shortages of electricians, plumbers, carpenters, and other tradespeople needed for the housing, infrastructure, and energy projects in the capital plan. Expanding apprenticeship and training capacity is a direct response.

Campus Facility Modernization. The $1.5 billion capital investment is transformational for several campuses. The University of Calgary Multidisciplinary Hub, MacEwan School of Business, and U of A Biological Sciences Centre will expand capacity in high-demand programs including business, science, and technology. The U of Lethbridge Rural Medical Teaching School addresses the physician shortage in southern Alberta.

First Nations College Strengthening. The grant increase to $4 million per year for five First Nations colleges, while modest, supports Indigenous community-based education and cultural preservation. The post-secondary sector has a role to play in Indigenous economic development that this investment acknowledges.

System Funding Review. The Expert Panel creates an opportunity for transformative reform of Alberta's post-secondary funding model. If the panel recommends a performance-based or outcomes-linked framework benchmarked to international best practices, it could strengthen both competitiveness and sustainability.

What's Missing

Budget 2025 does not include tuition policy changes or tuition caps, leaving affordability concerns unaddressed beyond the modest student grant increase. There is no dedicated research funding increase outside of capital projects and Alberta Innovates allocations. Mental health supports for post-secondary students, an issue that gained prominence during and after the pandemic, receive no specific allocation. There is no comprehensive strategy for addressing the faculty recruitment and retention challenges that are becoming acute at some institutions. The budget also lacks clarity on how institutions are expected to manage effectively flat operating funding while absorbing inflationary cost pressures.

Net Assessment

Post-secondary education in Budget 2025 receives a mixed assessment. The capital investment is genuinely significant at $1.5 billion, with projects that will expand capacity, modernize campuses, and build trades training infrastructure across the province. The $135 million annual skilled trades investment is well-targeted and economically relevant.

However, the essentially flat operating budget is a cause for concern. Institutions are being asked to absorb inflationary pressures and enrolment growth through own-source revenue and efficiencies, a model that works until it does not. The increasing reliance on tuition (58% of operating costs) raises access and affordability questions that the modest $5 million student grant increase does not fully address.

The Expert Panel represents both a risk and an opportunity. Until it reports, the sector is in a holding pattern. If its recommendations lead to a more competitive and sustainable model, this budget will be seen as a bridge year. If they do not, the flat funding trajectory will compound into a structural challenge for Alberta's post-secondary system.