The Alberta government is reversing past cuts to the Grants in Place of Taxes (GIPOT) program, committing to full restoration by 2026.
Budget 2025 increases GIPOT funding from $38 million to $55.3 million, covering 75 per cent of eligible provincial properties' municipal property tax value. In 2026, payments will rise to $75.3 million, covering the full amount that municipalities would receive if the properties were taxable. By 2027, funding is projected to increase to $79.3 million.
The GIPOT program provides discretionary grants to municipalities in place of property taxes on provincially owned buildings such as courthouses, remand centres and administrative offices. Like other provinces, Alberta does not pay municipal property taxes on government-owned buildings but compensates municipalities through these grants.
Municipalities have long called for full reinstatement of GIPOT after years of reductions. Alberta Municipalities (ABmunis), representing 264 communities, welcomed the funding increase.
"We appreciate the increased funding and the commitment to pre-2019 levels," ABmunis said in a statement. "We advocated for this, and the government listened."
Municipal Affairs Minister Ric McIver said the increase responds directly to municipal concerns.
"We heard clearly that stable funding is needed to deliver local services while avoiding property tax hikes," he said.
Finance Minister Nate Horner framed the funding boost as part of a broader effort to support municipalities while keeping Albertan taxes low.
"Municipalities will get more funding while their residents pay less in income taxes, thanks to Budget 2025," Horner said.
The Rural Municipalities of Alberta and the Alberta Mid-Sized Mayors’ Caucus also backed the move, calling it necessary to stabilize municipal finances.
"This increase helps us continue to make critical investments that support residents in growing communities," said Jeff Genung, chair of the Mid-Sized Mayors’ Caucus.
GIPOT is paid to 167 municipalities across Alberta. In 2025, some priority applications will continue to be fully funded.