Manitoba budget banks on federal funds to slash deficit

Manitoba is bucking a national trend by promising to slash its deficit, while boosting health care spending by nearly $1 billion and delivering modest affordability measures, including a PST cut that will save you money next time you buy a soda and bag of chips.

Free transit for kids and teens, free child care for some low-income parents and easing pressure on emergency departments through new specialized zones are among other pledges in the NDP government's 2026-27 budget, delivered at the legislature Tuesday.

"Good jobs, lower costs and better health [care] are what this budget is all about," Finance Minister Adrien Sala told reporters.

"As I look around the country, I see governments that are choosing to make cuts.... Here in Manitoba, we made different choices. We chose to make investments in health care."

The third budget from Premier Wab Kinew's government projects a deficit of $498 million — roughly $1.2 billion less than the 2025-26 deficit expected at the end of this month.

That comes after recent budgets in other provinces forecast much higher deficits, including an $819-million deficit projection in neighbouring Saskatchewan and multibillion-dollar deficits in both Alberta and British Columbia.

The Manitoba NDP government expects total spending to rise to $27.3 billion, up $1.4 billion, or roughly 5.4 per cent, from 2025-26.

That increase is possible partly due to equalization payments from Ottawa that have risen sharply for more than a decade. Next year's federal payment is expected to be about 70 per cent more than Manitoba received five years ago, rising to about $5 billion.

"If you depend on transfer, you don't have to think that seriously about economic growth issues," said University of Winnipeg economics professor Philippe Cyrenne.

"The transfer kind of gives you that room to spend more on health care and education, rather than think about development strategies."

Progressive Conservative Leader Obby Khan called the NDP's deficit projections "very rosy." The Opposition leader suggested the budget overall doesn't adequately address a need to grow Manitoba's economy to pay for services.

"Instead, it relies almost solely on transfers from the federal government," Khan said. "That is a major concern for all.... We will continue to be a have-not province under this NDP government."

In keeping with two of the top planks the NDP was elected on in 2023, the party is committing to spend more on health care and address affordability.

One affordability measure is the elimination of the provincial sales tax on all food at the grocery stores. That will mean as of July 1, Manitobans won't pay PST on hot-and-ready foods, like samosas and rotisserie chicken, or packaged foods like soda, candy, potato chips and more.