2025-2026 Budget | City of Medicine Hat

Balancing the needs of today with the requirements of tomorrow.

On December 16, 2024, City Council adopted the 2025 and 2026 Operating and Capital budgets for each of the four business units:

Municipal
Rate-based Utilities
Energy Production
Land Development and Real Estate

To see how the 2025-2026 budget was developed, view the project page on Shape Your City.

The 2025-2026 budget is designed to minimize the impact of tax and rate increases and make room for investing in new initiatives to meet the needs of the community.

Budget documents

Read the full budget:

2025-2026 Budget

Supporting documents:

The municipality is facing revenue pressures due to a historic budget gap, foregone property tax revenue during the pandemic, declining investment revenues, reduced fine revenues and development fees.

Rate-based utilities are showing increases to expenses related to the new residuals handling facility, gas transportation contracts, and salary related inflationary increases.

The historic level of earnings experienced over the past few years are not anticipated to continue into 2025-2026. Energy Production is experiencing increased levels of uncertainty related to Carbon Emissions Targets, Alberta's Restructured Energy Market, and the Energy Business Review. The City as a whole must respond to a new low earnings environment with looming costs related to abandonment obligations and energy transition.

Land Development and Real Estate expects favourable budget outcomes primarily due to anticipated sale of existing inventories and the decrease in costs to carry those properties.

Budget highlights

Budget 2025-2026 invests:

$28.8M

Growth Capital

Growth Capital refers to funds invested in major projects that expand our services, capacity, or capabilities. Growth Capital allows us to build more functionality.

$193M

Sustaining Capital

Sustaining Capital refers to the funds allocated to maintain and extend the life of existing assets, equipment, or infrastructure. Sustaining Capital keeps what we already have, running.

$10M

New Operating Initiatives

With significant cost-reduction efforts:

0%

Inflation

Departments absorbed inflation for all non-salary costs

$26.9M

Less Capital Requests

compared to the 2023-2024 budget despite significant inflation in construction costs

3

Less FTEs

An overall reduction in three full-time equivalent positions.

2025

$449.5M

2025 Operating Budget

The operating budget pays for everyday programs and services like police, fire, transit and road maintenance.

New spending in 2025 includes $5.6 million in one-time initiatives and $1.5 million for new ongoing initiatives.

*For 2025, the operating budget included $400,000 for the Municipal Election.

$99.4M

2025 Capital Budget

The capital budget pays for big projects or upgrades that help deliver important services, like building facilities or roads, and upgrading infrastructure like utilities, streetlights, or computer networks.

The 2025 Capital Budget includes $91.8M to sustain existing infrastructure, and $7.6M in growth capital.

2026

$459.9M

2026 Operating Budget

New operational spending in 2026 includes $794,000 in one-time expenses and $2.1 million in ongoing initiatives.

$112.9M

2026 Capital Budget

The 2026 budget includes $101.2 million in sustaining capital and $11.7 million in growth capital.

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This budget proposes a path to balance the municipal budget gap by 2028.

Financial Impact

Council approved a 5.6% increase to the revenue we get from taxes in 2025 and again in 2026.

Update April 2026: Council voted to reduce the 2026 tax rate increase to 4.9%, with any revenue shortfall to be funded through municipal cost savings and reserves.