Council hears update on proposed Provincial Budget impacts

Following the recent announcement of the proposed 2026 Alberta Provincial Budget, Lethbridge residents may be wondering what changes within it may impact their local property taxes this year.

Darrell Mathews, Chief Financial Officer and Treasurer, provided a verbal update to Lethbridge City Council at Tuesday’s meeting including 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.

Provincial Education Tax increase

For Lethbridge, the proposed Provincial Education Property Tax amount will be going up by 12.9 per cent – meaning an increase of about $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 are currently estimating the Provincial education levy increase will represent,” says Mathews.

“On behalf of City Council, I just want to reiterate to our residents that this part of their property tax bill is not a municipal decision or a municipal tax,” says Mayor Blaine Hyggen. “The City simply collects the education property tax on behalf of the Province and remits it back to the Government of Alberta.”

Through the Municipal Government Act, the City of Lethbridge is legislated to collect and remit the education tax on behalf of the Province of Alberta and has no control over the amount. 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 on March 31. The proposed Provincial Education Tax 2026 increase to Lethbridge follows a 13.8 per cent increase in 2025 and a 6.1 per cent increase in 2024.

A further detailed visual explanation is here in our 2025 tax brochure, breaking down how your property tax dollar is allocated. A 2026 updated brochure will be available in late May to coincide with the release of 2026 property tax notices. For property owners, assessment notices were sent out in the first week of January. Tax notices will be sent out at the end of May and property taxes are due on the last business day of June.

Provincial Infrastructure Funding

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. 

“For Lethbridge, this dynamic is important because, unlike the Province, municipal governments are required to balance their budgets each year,” Mathews said. “Any increase in costs or reduction in Provincial support must ultimately be offset by increases in local revenues – such as 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. Administration expects 2026 numbers to be confirmed by the Province in April. 

“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,” says Hyggen.

Other Provincial Funding Impacts

Mathews spoke about impacts to Family and Community Support Services (FCSS), the Policing Support Grant and Government Property in Lieu of Taxes (GIPOT). His full presentation and Council’s discussion can be viewed on the City’s YouTube page here. 

In addition to the Provincial budget itself, the City is also experiencing operating pressures resulting from recent legislative and policy changes, including: 

• Changes to Traffic Safety Act enforcement revenues, which have resulted in an estimated $2.2 million annual budget pressure
• The implementation of body-worn cameras for police services, creating approximately $800,000 in annual costs
• Changes to election legislation requiring hand counting of ballots, which has significantly increased election administration costs 

For Public Inquiries:  

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