Budget 2025: What It Means for Tourism

Sector Impact Summary

Tourism is one of the few sectors in Budget 2025 that faces an operating budget decline. The Ministry of Tourism and Sport operating expense falls $8 million to $118 million in 2025-26, and continues declining to $111 million by 2027-28 as temporary tourism initiatives and one-time sport event funding conclude. Total expense drops from $136 million in 2024-25 to $133 million and continues downward to $121 million by 2027-28.

This comes at an inopportune time. Alberta's tourism sector is navigating the aftermath of the 2024 Jasper wildfire, which damaged one of the province's most iconic tourism destinations. Canada-U.S. trade tensions threaten cross-border travel flows. Consumer spending is softening as unemployment rises to 7.4%. And yet, the underlying indicators suggest resilience: tourism levy revenue is growing from $122 million to $129 million by 2027-28, driven by rising accommodation activity and population growth.

The budget's tourism-related support is largely indirect. Travel Alberta receives $80 million for destination marketing. The Alberta Indigenous Opportunities Corporation has expanded its loan guarantee program to include Indigenous-led tourism. The weak Canadian dollar (69.6 US cents) makes Alberta a more affordable destination for international visitors. And the broader capital plan investments in event centres, parks, and recreation infrastructure create tourism assets even though they are not counted in the Tourism and Sport ministry budget.

Key Budget Measures

Travel Alberta Corporation

Travel Alberta, the province's destination marketing agency, receives $80 million in 2025-26. As the primary vehicle for marketing Alberta as a visitor destination, this budget supports domestic and international marketing campaigns, digital promotion, and industry partnerships. The budget does not specify increases or decreases from the prior year for Travel Alberta specifically.

Tourism Levy Revenue

The tourism levy generates $122 million in 2025-26, growing to $129 million by 2027-28. This dedicated revenue stream is driven by accommodation sector activity and indicates underlying sector health despite the declining ministry budget. The levy provides a self-sustaining funding base for tourism development that is somewhat insulated from discretionary budget decisions.

Alberta Indigenous Opportunities Corporation

The AIOC, with expense of $9 million in 2025-26, expanded its loan guarantee mandate in 2024 to include Indigenous-led tourism initiatives. The corporation has provided over $720 million in loan guarantees for projects valued at over $3.4 billion since its inception. The tourism expansion creates pathways for Indigenous communities to develop culturally-based tourism products and experiences.

Active Communities Initiative

The $30 million Active Communities Initiative over three years ($10 million per year) funds recreation and sport infrastructure that supports both residents and visitors. This is the largest capital allocation within the Tourism and Sport ministry.

Calgary River District and Event Centre

While technically in the Transportation and Economic Corridors capital budget, the $173 million Calgary River District and Event Centre project over three years is a significant tourism infrastructure investment that will attract major events, concerts, and sports tourism to Calgary.

Edmonton Event Park

The $52 million Edmonton Event Park project (through Municipal Affairs capital) similarly supports event-driven tourism in the provincial capital.

Funding Changes

Category	2024-25 Forecast	2025-26 Estimate	Change
Tourism and Sport Total Expense	$136M	$133M	-$3M (-2.2%)
Tourism and Sport Operating	$126M	$118M	-$8M (-6.3%)

Source: Fiscal Plan 2025-28, Expense, p. 87.

The declining trajectory continues through the plan period, with total expense reaching $121 million by 2027-28. This reflects the wind-down of temporary tourism programs and one-time sport event funding rather than a policy decision to reduce ongoing tourism support.

Capital Investment

The Tourism and Sport capital plan is modest at $35 million over three years:

• Active Communities Initiative: $30 million ($10 million per year)
• Strathmore Event Centre: $5 million (2025-26 only)

Tourism-adjacent capital investments in other ministry budgets are significantly larger:

• Calgary River District and Event Centre: $173 million (Transportation and Economic Corridors)
• Edmonton Event Park: $52 million (Municipal Affairs)
• Forestry and Parks capital (campgrounds, trails, facilities): $293 million
• Arts Commons and Olympic Plaza Transformation (Calgary): $26 million (Arts, Culture and Status of Women)
• Community Facility Enhancement Program: $100 million (Arts, Culture and Status of Women)

When these tourism-adjacent investments are included, the effective capital investment supporting tourism activity exceeds $600 million over three years.

Source: Capital Plan Details by Ministry 2025-28.

Risks

Declining Operating Budget (High). The reduction from $126 million to $111 million by 2027-28 narrows the resources available for marketing, industry development, and destination management at a time when Alberta needs to rebuild its tourism brand following the Jasper wildfire and navigate cross-border travel uncertainty.

Cross-Border Travel Disruption (Medium). Canada-U.S. trade tensions and retaliatory tariff measures could dampen cross-border tourism in both directions. U.S. visitors may be deterred by negative bilateral sentiment, and Canadian travellers may reduce U.S. trips, redirecting some spending domestically but reducing overall tourism economic activity.

Jasper Wildfire Recovery (Medium). The 2024 Jasper wildfire damaged a major tourism destination. Recovery of accommodation, food service, and recreation infrastructure will take years. Visitor confidence in the region needs to be rebuilt through sustained marketing and communication.

Consumer Spending Weakness (Medium). Rising unemployment (7.4%), elevated household debt, and uncertainty about tariff impacts are expected to weigh on discretionary spending. Tourism and recreation are among the first categories consumers cut when budgets tighten.

Competition from Peer Jurisdictions (Low). British Columbia and other Canadian provinces continue to invest heavily in tourism marketing and infrastructure. Alberta must maintain competitive positioning despite a declining budget.

Opportunities

Weak Canadian Dollar. The exchange rate at 69.6 US cents per CAD makes Alberta significantly more affordable for international visitors. This is a meaningful competitive advantage for attracting American and overseas tourists, particularly for premium experiences like Rocky Mountain tourism, wildlife viewing, and adventure activities.

Indigenous Tourism Expansion. The AIOC's expanded mandate to include Indigenous-led tourism creates a new avenue for developing authentic cultural tourism products. Alberta's Indigenous communities offer unique experiences that appeal to growing demand for cultural and experiential tourism globally.

Population Growth Supporting Domestic Tourism. With 2.5% population growth, Alberta's domestic tourism market continues to expand. New residents explore their province, attend events, and visit parks and recreation facilities, providing a baseline of demand that supports the sector even when external conditions are challenging.

Event Infrastructure Investment. The Calgary Event Centre ($173 million), Edmonton Event Park ($52 million), and other facility investments will attract major events, sports tournaments, and cultural programming that drive visitor spending in accommodation, food service, and retail.

Parks and Campground Expansion. The $293 million Forestry and Parks capital plan includes $29 million for new campground development, $24 million for Crown Land trails, and $5 million each for Kananaskis trail upgrades and Big Island Provincial Park. These investments expand the outdoor recreation capacity that is central to Alberta's tourism identity.

What's Missing

Budget 2025 does not include a dedicated Jasper wildfire tourism recovery fund, despite the significance of the destination to Alberta's international brand. There is no specific cross-border tourism promotion strategy to address the bilateral tensions with the United States. Agritourism and culinary tourism, growing globally, receive no dedicated funding. The budget lacks a comprehensive digital tourism strategy for promoting Alberta as a destination through social media, content marketing, and online booking platforms. Winter tourism diversification, which could extend the traditionally summer-focused season, is not specifically addressed. There is no conference and convention bureau support increase despite growing competition for business events.

Net Assessment

Tourism receives a negative assessment in Budget 2025. The declining operating budget from $126 million to $111 million over three years sends a signal that tourism is not a budget priority in a year dominated by health restructuring, education growth, and tariff preparation. The $35 million ministry capital plan is minimal.

The mitigating factors are significant. Tourism levy revenue growth indicates underlying sector health. The weak Canadian dollar provides a natural competitive boost. The AIOC tourism expansion opens new Indigenous-led development. And tourism-adjacent capital investments, when totalled across ministries, exceed $600 million.

However, the timing of operating budget reductions is concerning. The Jasper wildfire recovery requires sustained investment in destination rebuilding. Cross-border tensions require proactive marketing to maintain U.S. visitor flows. And the global tourism market is intensely competitive, with peer jurisdictions increasing their marketing and development budgets. Alberta's tourism sector will need to rely on its natural advantages and private-sector dynamism more than government support over the next three years.