TAMRMS#: B06
6.1
Information Item Only
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Government of Alberta 2026 Budget Analysis
Presented by: Monty Killoh, Government Relations Advisor, Government/Indigenous Relations & Environment
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SUMMARY
This report reviews impacts and opportunities for the City of St. Albert related to the Government of Alberta’s 2026-2029 Budget that was tabled on February 26, 2026, titled “Focused on What Matters” (herein referenced as Budget 2026).
City Administration intends to highlight impacts, notwithstanding additional budget announcements may be forthcoming.
ALIGNMENT TO COUNCIL DIRECTION OR MANDATORY STATUTORY PROVISION
N/A
BACKGROUND AND DISCUSSION
Partnership and collaboration across all orders of government is a core aspect of delivering the services needed by residents and businesses. Municipalities play a critical role in the direct provision of many public services as well as the construction and maintenance of public infrastructure.
Figure 1: Government Roles and Responsibilities in Canada
At the same time, municipalities primarily rely on property taxes, user fees, and grants (government transfers) to fund the delivery of these services and infrastructure. Therefore, grants/government transfers play a vital role in allowing municipalities to fulfill their mandate and satisfy the expectations of their residents and businesses in the delivery of infrastructure and services.
Various factors influence the Provincial Budget, from economic conditions to government objectives to geopolitical factors. The following are examples of factors influencing Budget 2026:
• Lower estimated oil prices resulting in less royalty and overall revenue ($60.5/barrel forecast in 2026 compared to $77.83/barrel in 2023). This circumstance has changed since the Budget was first tabled;
• A fragmented and unstable trade and geopolitical landscape, combined with lowering immigration levels, is anticipated to contribute to a dampening of economic activity; and,
• Large investments in Education and Healthcare (both capital and operating).
Together, these factors are driving forces behind the Government’s projected $9.4 B deficit. However, it should be noted that the projected deficit is based on economic assumptions. Finance Minister Horner has been quoted as stating that an average price of $74 per barrel would generate enough additional revenue to balance the deficit.
Provincial revenue is also critical in a municipal context, as it is directly tied to the primary infrastructure funding envelope provided to municipalities: the Local Government Fiscal Framework (LGFF). LGFF is indexed to Government of Alberta revenues (not inclusive of expenses or the deficit) from three years prior, therefore, if provincial revenues decrease by ~10% in 2026 compared to 2025, then St. Albert’s 2029 LGFF allocation will similarly decrease by ~10% compared to 2028.
High-Level Summary of Budget 2026 Impacts to City of St. Albert
Figure 2 below identifies some of the specific impacts to the City of St. Albert, at a high level.
Figure 2: 2026 Provincial Budget Impacts to City of St. Albert
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Successes |
Challenges |
Future Opportunities |
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- Ray Gibbon Drive cost-sharing agreement fully-funded. - Full restoration of Grants in Place of Taxes. - 3 School investments for St. Albert: o New Chérot K-9 (Public) o New Riverside K-9 (Catholic) o Leo Nickerson Modernization (Public) |
- Continued increase of Provincial Education Property Tax rates, which municipalities collect on behalf of the Province. - Static FCSS funding - Reduction of several municipal grant programs and forecasted additional cuts in the future. |
- Potential expansion of grant eligibility for Water/Wastewater infrastructure funding for mid-sized cities. |
Municipal/City of St. Albert Items of Note within Budget 2026
1. Ray Gibbon Drive Funding
a. Budget 2026 indicates the Province has fully funded their portion of the Ray Gibbon Drive twinning project through to 2029.
2. New School Construction Funding
a. Budget 2026 has allocated $4.1B in capital investments over three years to maintain, enhance, plan, and build new schools.
i. The three school projects announced for St. Albert will receive funding through this allocation. Exact funding amounts have not been publicized as of the drafting of this report.
3. Provincial Education Property Tax
a. The Province is raising Education Property Tax rates, to attain their objective of the tax funding 33% of Education expenses.
i. This means that future increases or decreases to the Education Property Tax should be somewhat aligned to Government expenditures on Education increasing or decreasing.
ii. The Education Property Tax represents approximately 23% of a total tax bill in St. Albert.
b. Residential:
i. An 11.5% increase to St. Albert’s overall residential requisition. The net effect, after adjusting for growth, will be an $18 increase per $100,000 of assessed value to the education portion of a typical residential property tax bill.
c. Non-Residential:
i. A 7.8% increase to St. Albert’s overall non-residential requisition. The net effect, after adjusting for growth, will be a $23 increase per $100,000 of assessed value to the education portion of a typical non-residential property tax bill.
4. Local Government Fiscal Framework (LGFF)
a. $820M of capital and $50M of operational funding has been allocated to LGFF.
i. St. Albert’s 2026 LGFF allocation for capital is $9,222,073 - this is very similar to St. Albert’s 2025 allocation of $9,257,152.
ii. St. Albert’s 2027 LGFF allocation for capital will increase to $10,985,372.
iii. As LGFF allocations are indexed to increases and decrease in provincial revenue, it is expected that the LGFF allocation for 2028 will decrease by ~10%, as this was the approximate revenue decrease between Budget 2024 and Budget 2025.
iv. 2026 LGFF operational funding allocations have not yet been publicized, however it is expected that St. Albert will receive a similar allocation to 2025 ($984,262).
5. Municipal Infrastructure Funding
a. Budget 2026 allocates $443M over three years under the provincial Water for Life and Alberta Municipal Water/Wastewater Partnership programs, as well as other small investments into municipal water/wastewater projects.
i. Of note, Budget 2026 states that the funding is “to support small and mid-sized municipalities to build or enhance water and wastewater infrastructure grants.”
1. The above-referenced programs have historically been applicable only to municipalities with a population smaller than 45,000; given that the Government of Alberta suggested a potential expansion of these programs to be eligible for larger mid-sized cities during consultations that occurred in 2025, it is unclear if this statement is a commitment to implement such an expansion.
6. Grants in Place of Taxes (GIPOT)
a. As the Province does not pay municipal property taxes, it provides a yearly grant to municipalities meant to provide revenue on government-owned properties that utilize civic infrastructure and services, in lieu of taxes. In 2021, this grant received a 50% funding reduction, which resulted in an approximate $80,000 loss of annual revenue to the City.
b. Through Budget 2025, the Province announced that GIPOT will be restored to its original funding levels, with a 75% restoration in 2025 and a 100% restoration in 2026.
c. Budget 2026 confirms that GIPOT has been completely restored to its pre-2021 funding levels, which results in approximately $40,000 of restored revenue for the City in 2026.
7. Regional Collaboration and Alberta Community Partnership (ACP) Grant
a. Budget 2026 reduces funding for the ACP Grant from $13.4M to $10.6M.
b. The City of St. Albert and other regional municipalities have often applied to and received funding through this grant for inter-municipal initiatives. Recently, St. Albert led a regional application to this grant for the Edmonton Region Collaboration Framework project and was awarded $200,000 in February 2026, after Budget 2026 was tabled.
8. Housing
a. $217.5M has been allocated for homelessness programs and supports - this is a slight decrease from Budget 2025’s allocation of $220M.
b. $648M has been allocated to build, renew, maintain, and operate affordable housing. This is a slight increase from Budget 2025’s allocation of $641M.
9. Family and Community Support Services (FCSS), Culture, and Recreation Funding
a. FCSS funding remains static at $105 M through Budget 2026, which is challenging given inflationary economic pressures.
b. Provincial funding for FCSS has not increased since 2023, where it received a $5 million increase - prior to that increase, funding had remained static at $100 million since 2015.
i. Due to ongoing monetary inflation, this represents an effective funding decrease over the past decade; if funding kept pace with inflation, FCSS should have received a ~$130 million allocation for Budget 2026.
c. Library operating grant funding has been slightly increased to $40.1M from $39.0M.
d. Funding for the Alberta Foundation for the Arts has increased from $34.6M in 2025 to $38.1M million in 2026 - this program has supported numerous cultural initiatives in St. Albert, from Public Library events to the International Children’s Festival of the Arts.
10. Public Safety and Emergency Services
a. $24M is being allocated for the implementation of the Alberta Sheriffs Police Service (the new Provincial Police Service).
i. Budget 2026’s funding of this service coincides with an announcement from the Province a few days prior to the budget being tabled, that announced the transition of approximately 1,200 Alberta Sheriffs employees into the Alberta Sheriffs Police Service (inclusive of non-officer/administrative positions).
1. Budget 2026 states that the Alberta Sheriffs Police Service will augment and support police throughout Alberta, complement existing services, and advance the framework for delivering full community policing in smaller and rural communities.
b. Provincial fine and penalty revenue is expected to yield $167M in 2026, an increase from last year’s Budget actuals of $144M; however, there is no commitment in the Budget to allow municipalities to maintain a greater share of fine revenue, after the Province made the decision to retain a larger portion of this revenue in Budget 2020.
STAKEHOLDER COMMUNICATIONS OR ENGAGEMENT
Prior to Budget 2026 being tabled, the City engaged with relevant Provincial Ministries with regards to City Council’s priorities.
The City remains well-positioned to work with the Government of Alberta, particularly in the realms of Economic Prosperity, Community Well-Being, and Financial Sustainability.
Given the unknown impacts of ever-changing international trade policies on the provincial economy, combined with uncertainty over the price of oil, aspects of the budget may undergo changes to properly react to such impact. Administration will continue to monitor any municipal impacts and opportunities to advance Council’s priorities.
At the time of writing this report, it is suspected that the Government of Alberta will be introducing legislation that impacts municipalities in the Spring Legislative Sitting. Should this be the case by the time of this report being presented to Council, City Administration will provide a verbal update.
ALIGNMENT TO PRIORITIES IN COUNCIL’S STRATEGIC PLAN
None at this time.
ALIGNMENT TO LEVELS OF SERVICE DELIVERY
N/A
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Report Date: April 14, 2026
Author(s): Monty Killoh
Department: Government/Indigenous Relations & Environment - Office of the CAO
Department Director: Trevor Duley
Chief Administrative Officer: William Fletcher