Federal equalization payments to Manitoba to rise by $355M next year

The flag of Manitoba flies on Monday, Nov. 1, 2021 in Ottawa. THE CANADIAN PRESS/Adrian Wyld

WINNIPEG — The Manitoba government is forecast to see its federal equalization payments jump by $355 million, or 7.5 per cent, in the next fiscal year as it continues to try to balance the provincial budget.

New figures from the federal finance ministry show Manitoba is set to receive a little more than $5 billion in equalization — up from $4.68 billion this year. Equalization payments to the province have risen steadily for more than a decade, and next year’s amount is double what Manitoba received in 2020.

Equalization is a federally funded program that gives money to poorer provinces so they can offer similar levels of services and tax rates as richer ones. Manitoba is the only western province that currently receives the funding, and equalization accounts for roughly 18 per cent of all Manitoba government revenues.

The equalization boost comes as Manitoba is dealing with ongoing deficits that stretch back, with the exception of two years, to 2009.

The NDP government has promised to balance the budget before the next election, slated for 2027, and has talked of reducing Manitoba’s dependance on equalization and becoming a “have” province by 2040.

Finance Minister Adrien Sala said both goals remain achievable and can be helped by growing the economy.

“I think the recent announcement about our economic development strategy, and the corresponding, for example, elimination of the (sales tax) on new equipment for manufacturing is the kind of action we need to take to spur more investment in our province,” Sala said Friday.

The Opposition Progressive Conservatives said the government is not making headway. The government finished the last fiscal year with a higher-than-expected deficit and, as of the last update in September, is heading to surpass its target this year as well.

“Despite some of the highest equalization increases, the NDP still cannot balance the books,” Tory finance critic Lauren Stone said.

The government is forecasting a deficit of $890 million for the current fiscal year that ends in March, up $96 million from the budget last spring.

Sala is scheduled to release his next fiscal update before the end of the month.

This report by The Canadian Press was first published Dec. 12, 2025.

Steve Lambert, The Canadian Press