This week, the City of Lethbridge’s Chief Financial Officer and Treasurer Darrell Mathews provided a verbal update to Council about the proposed 2026 Alberta Provincial Budget.
The update included explanations of the increase to the Provincial Education Tax, changes to infrastructure funding and other potential impacts that will place financial pressures on municipalities and local taxpayers.
For Lethbridge, the proposed provincial Education Property Tax amount will be going up by 12.9 per cent, which would be an increase of approximately $117 for the average single-family detached household, assessed at approximately $389,000.
“Although we have not completed the tax roll for 2026, based on the province’s proposed budget, this is what we’re currently estimating the provincial education levy increase will represent,” says Mathews.
“On behalf of City Council, I just want to reiterate to our residents this part of their property tax bill is not a municipal decision or a municipal tax,” adds Mayor Blaine Hyggen. “The City collects the education property tax on behalf of the province and remits it back to the Government of Alberta.”
Education property taxes are pooled in the Alberta School Foundation Fund and distributed to public and separate school boards on an equal per-student basis.
The Alberta Budget is anticipated to be passed Mar. 31.
Mathews also spoke about how municipalities across Alberta now receive roughly half the per-person provincial funding, to help support local services and infrastructure, that they did 15 years ago.
Mathews notes any increase in costs or reduction in provincial support must ultimately be offset by increases in local revenues, including property taxes, utility rates or user fees or through adjustments to service levels.
The City’s Capital Budget is directly impacted through the province’s Local Government Fiscal Framework (LGFF), which remains the primary provincial grant supporting municipal infrastructure and some operating needs.
“Council will need to consider these pressures, as part of upcoming discussions on the 2027 Operating Budget update, set for June, as well as the 2027–2036 Capital Improvement Program deliberation, which will be brought forward later this year,” adds Hyggen.
“We have some very tough decisions to make with the upcoming Operating and Capital Budgets. We have over $250 million of requests for different projects and definitely not nowhere near those dollars available — maybe 10 per cent or so. It’s going to be a challenge coming up to this budget. We just know there’s some frustration out there on how we’re going to try to keep taxes low,” Hyggen explains.
According to Hyggen, this is going to be one of those needs before wants budgets.
“Our needs are infrastructure. Our needs are things you may not see, but they’re important things to have. We saw north of us with a pipe burst in Calgary and what that had caused in that community. We’re trying to make sure we don’t have those issues here,” he says. “Those infrastructure projects are extremely important.”
Hyggen notes the province’s fiscal year ends at the end of the month, so the Alberta Provincial Budget could change. “It goes from April to March each year.”
“It’s my hope maybe there’s more that comes up before this is finalized, and decisions are made to alleviate some of the burdens we’ve seen as a community,” he adds.
