2025 Manitoba budget forecasts deficit as high as $1.9B if tariffs continue

Manitoba is forecasting a deficit that could range from around $800 million to as high as $1.9 billion, as the uncertainty of of ongoing tariff wars clouds the province's economic future, according to the NDP government's latest budget.

The second budget from Premier Wab Kinew's government, released Thursday, forecasts that a continuing 25 per cent tariff on U.S. imports, along with retaliation from the Canadian government, could drag down economic activity and reduce incomes in Manitoba by $1,420 on a per capita basis.

The province says it's prepared to spend up to half a billion dollars to support tariff-affected businesses and workers, while also launching a range of new major infrastructure projects, including schools and hospital emergency departments, to cushion what the budget says could be an economic hit comparable the recession Manitoba saw in 2009.

Finance Minister Adrien Sala asserted Manitoba is as ready as possible for any economic turbulence.

"We're starting from a place of strength," he said during a briefing with reporters at the legislature Thursday, calling the budget one that "meets the moment" Manitoba is facing.

If current trade tensions with both the U.S. and China recede, the forecast deficit will be $794 million, but even that target is based on the assumption Manitoba will rake in more revenues than ever.

University of Winnipeg economist Philippe Cyrenne says it's unrealistic to expect provincial sales tax and income tax revenues to significantly rise during turbulent economic times.

"Would you take this document to a bank and try to get a loan? I think it would be difficult," Cyrenne said.

He said it's clear much of the budget was prepared before tariff threats materialized.

"This looks like it was put together a month ago," he said.

"Trying to put together a budget in these times is very challenging."

Sala maintained Thursday the government will still achieve a balanced budget by 2027. Achieving that goal in its first term was one of the NDP's promises during the 2023 provincial election campaign.

However, the Opposition Progressive Conservatives say that target is becoming lofty.

"They're certainly putting a lot of faith in a lot of federal transfers coming this year," said finance critic Lauren Stone, noting the province is forecasting an $639 million increase in transfers from Ottawa.