Spending on higher education plateaus

Budget 2025 sees Alberta’s spending slow down as shrinking oil prices, and looming tariff threats are expected to deflate revenue. 

Ahead of the budget announcement, U.S. President Trump once again changed his mind on when 25 per cent tariffs on all Canadian goods would start. The date is now set for March 4.

“Budget 2025 takes a cautious approach,” Minister of Finance Nate Horner said to reporters at Thursday’s budget conference.

For higher education, this means that operating grants for public universities and colleges will stay steady at 2024 levels. These grants, which make up a bulk of the money schools spend on running their programs, had been on an incline since 2023, after years of heavy cuts began in 2019. 

In 2024, MacEwan University’s base operating grant was $104.36 million.

While the dollar amount won’t change, the ratio of funding will. Public universities will foot more of the bill than last year — having to cover 58 per cent of their budgets compared to 53 per cent. 

On top of that, inflation is projected to go down to 2.6 per cent and the province is expecting a $5.2 billion deficit with this budget. With a surplus still forecasted for the current fiscal year, and three more consecutive surpluses in the rear-view, this planned deficit marks a major shift in Alberta’s economy. 

Horner said the reasoning behind the deficit is due to declining revenues and uncertainties around tariffs, as well as a choice to spend more to speed up construction on K-12 schools. Horner said the province is still catching up with rapid population growth seen over the last few years.

This budget comes at a time when students and industry-watchers in higher education are concerned about funding matching a rising tide of students, and rising cost of living. 

Higher Education Strategy Associates, a Toronto-based education consultant group, predicts a 40 per cent increase in university-aged Albertans in the next ten years leading to a high demand for post-secondary seats. 

Earlier this month, student associations from 25 post-secondary institutions asked the government to return funding to 2019 levels in a joint letter.

Responding to a question about what it might take to get back to 2019 levels of funding, Horner said, “a more optimistic forecast might help.”

While public degree-granting schools will see funding plateau, independent colleges and universities, like Burman, King’s College, and Makami College will get more money this year. The province pledged to spend an extra $27 million over the next three years split among the six different institutions.

When asked about how concerns on funding higher education affected the new budget, Horner said that advanced education still saw increased spending on capital projects, despite some other ministries’ spending being flattened. 

These projects include redeveloping a biological sciences building at the U of A, and the continued funding of MacEwan’s new business building. 

“I know everybody wants more, but the real question going forward is going to be a lot harder,” Horner said. He wouldn’t say how an increase in inflation, and increased spending on the side of schools could affect tuition caps. 

Budget 2025 may be a momentum shift in post-secondary spending, but the biggest changes might be yet to come. 

A panel, led by economist Jack Mintz, began a complete review of how the sector is funded in November, and its findings will inform what’s likely to be a very different budget of higher education in 2026.

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Photos by Amanda Erickson