The Government of Alberta has released Budget 2026 and the 2026-2029 Fiscal Plan.
RMA President Kara Westerlund’s initial reaction to Budget 2026 is as follows:
The Government of Alberta is facing a challenging fiscal situation. Budget 2026 reflects the shifting economic environment and demonstrates a provincial approach of continuing to contribute to infrastructure such as schools and hospitals. While such investments are needed, this budget missed a crucial opportunity to invest in rural infrastructure that provides proven economic returns, both locally and across the province. As rural municipalities wrestle with a $17 billion infrastructure deficit, it is disappointing to see a significant reduction in the Strategic Transportation Infrastructure Program. This, combined with a substantial increase in Education Property Tax rates, will reduce rural municipal capacity to maintain core infrastructure and provide essential services, resulting in increased risk of asset failure and missed opportunities for new investment and economic growth. These types of strategic investments are necessary for sectors such as oil and gas, agriculture, and forestry, as well as the ability of Alberta to attract emerging sectors such as data centres and value-added agriculture.
While municipal infrastructure funding levels will remain an issue, enhanced partnership in other areas can help. We continue to call on the Government of Alberta to collaborate with RMA and its members to develop a strategic approach to ensuring that existing funding is allocated in a way that reflects rural cost drivers, prioritizes assets that are strategically significant on a local and provincewide basis, and reflects the economic benefit of a safe and resilient rural infrastructure network. Budget 2026’s vision of growing the economy through attraction of data centres, increases in oil production, and investment incentives for new sectors provides optimism for rural Alberta. Rural municipalities are seeking partnership with the Government of Alberta to attract and provide services to these emerging and longstanding industries. Investment in local infrastructure is not just a secondary priority; it is the essential requirement without which industrial growth cannot move forward. Simply put, not investing in rural municipal infrastructure is a missed opportunity to build the province’s economic future.
For a full breakdown of the budget and estimates, visit the Government of Alberta’s Budget 2026 webpage.
The following are details of the 2026-2027 budget that will be important for RMA members:
- Alberta’s estimated revenue is $74.6 billion, a slight increase from last year’s budgeted $74.1 billion, but much lower than the $82.5 billion recorded in 2024-2025.
- Budget 2026’s Three-year Capital Plan is forecast at $28.3 billion, which is a $2.2 billion increase from Budget 2025. For 2026-27, capital spending is forecast at $8.7 billion; $48 million more than estimated in Budget 2025.
- In 2024-25, Alberta recorded an $8.3 billion surplus. Last year’s budget projected a $5.2 billion deficit, and the 2026 budget now anticipates a $9.4 billion deficit in 2026-27, followed by $7.6 billion in 2027-28 and $6.9 billion in 2028-29.
- Education property tax (EPT) rates will increase in 2026, rising to $2.84 per $1,000 of equalized assessment for residential/farmland property and $4.17 per $1,000 for non‑residential property. This reflects a 7.2% increase in education‑related operating costs, with government indicating that EPT will be raised to cover one‑third of these expenses. As a result, the amount of EPT collected is projected to grow from last year’s $3.1 billion to $3.6 billion in 2026-27, further increasing to $3.8 billion in both 2027-28 and 2028-29.
- $265.6 million is allocated over three years (2026-27 to 2028-29) under the Strategic Transportation Infrastructure Program and dedicated grants to municipalities toward road and bridge improvements and airport upgrades. This is a significant decrease from Budget 2025, which allocated $344.9 million over three years. Budget 2026 allocates only $29.3 million to STIP in 2026-2027 – almost $10 million less than the amount allocated in Budget 2025.
- $860 million is allocated in 2026-2027 for the Local Government Fiscal Framework (LGFF), representing a decrease from $880 million in 2025-2026:
- The LGFF capital component declines from $820 million to $799.7 million.
- LGFF operating component remains at $60 million.
- Total LGFF funding is expected to increase to $955 million in 2026-2027, in line with changes to provincial revenues as per the Local Government Fiscal Framework Act.
- Grants in Place of Taxes (GIPOT) increased from $55.3 million in 2025-26 to $75.3 million in 2026-27, reflecting the province’s shift to resume GIPOT coverage for 100% of the eligible property tax amounts. GIPOT is expected to remain at 100% in 2027-28 and 2028-29, with funding projected at $79.3 million in both years.
- $60 million is designated for the Rural Hospital Enhancement Program over two years, a significant increase from previous years. This is likely a replacement for the recently-eliminated Rural Health Facilities Revitalization Program.
- Municipal water infrastructure grant programs are increasing from $121 million to over $175 million:
- Funding for the Municipal Water and Wastewater Program has increased from $44.6 million in 2025-26 to over $63 million in 2026-27. However, this still remains far less than Budget 2023, which provided the program with $85.7 million.
- Funding for Water for Life is estimated to be $97.6 million in 2026-27, which represents a significant increase from the 2025-26 amount of $51.3 million.
- Funding for the First Nations Water Tie-in Program has more than doubled, from $7.5 million in 2025-26 to over $15 million in 2026-27.
- The Disaster Recovery Program (DRP) has been renamed to the Hazard Assistance and Resilience Program (HARP), and remains under the administration of Public Safety and Emergency Services. However, there are no line items in Budget 2026 regarding this updated program, with DRP funding ending in 2025-26.
- In 2026-27, $530,000 is allocated to support nuclear energy engagement activities and education initiatives to advance broader public engagement and awareness.
The backgrounder provides more budget highlights that may affect rural Alberta. The RMA will provide additional details and analysis through member bulletins as they become available. You can view the complete budget and its supporting documents online.
Wyatt Skovron
General Manager of Policy & Advocacy
780.955.4096
wyatt@RMAlberta.com