Manitoba reports $498M deficit in budget

Manitoba’s 2026 budget will eliminate the PST on all grocery items starting July 1. CTV's Jeff Keele has more.

The Kinew government is eliminating a tax on food as affordability continues to be a focus for Manitobans in their day-to-day lives.

The province unveiled its 2026 budget Tuesday, which is promising to save Manitobans money and provide better health care. It’s also earmarking funds to protect Manitoba from another significant wildfire season, with cash going toward more firefighters and a new fire base in Thompson.

The government is projecting a deficit of $498 million for 2026-27. Finance Minister Adrien Sala said they still plan on balancing the books by the end of their first term.

Affordability

The Manitoba government is doing away with the PST on all groceries, impacting items such as sandwiches, rotisserie chickens, prenatal vitamins, and junk food. This change is expected to cost the government $32.2 million per year. The PST will be removed starting July 1.

Staying at the grocery store, the province is also exploring the expansion of the price freeze for milk, which is currently only for one-litre cartons. The government is looking to expand the freeze to more sizes.

The provincial government is once again raising the school tax credit for homeowners from $1,600 to $1,700. This is expected to save Manitobans $28.6 million collectively for a full year.

However, new in this budget, homes valued at more than $1 million will see that number reduced on a sliding scale. It will be eliminated for homes worth more than $1.5 million.

Renters will also get a small boost as the Renters Affordability Tax Credit will see an incremental jump, going from $625 for 2026 to $675 in 2027. It will implement savings for people of just under $10 million a year.

Low-income families are receiving more help as the government is eliminating childcare fees. The change is expected to impact 3,500 families and around 5,000 kids.

The province is also going to be working with the City of Winnipeg and other municipalities to provide free transit rides for school-aged kids in Manitoba. The province is putting in $10 million to offset the cost.

Health care

The Manitoba government is building a cardiac centre at St. Boniface Hospital. Budget 2026 features $22.1 million for a clinic that will operate seven days a week at the hospital with a cardiac zone adjacent to the ER. As well, a cardiologist will be stationed in the ER. This will also allow for 18 more beds.

There will also be new specialized patient zones at emergency rooms, which will allow hospitals to sort patients based on their needs to ensure they see a doctor faster.

Siloam Mission is set to open up 32 new alternate care beds as the province is earmarking $2.3 million. These beds are for people who don’t need to be in hospital but still require care.

The previously announced supervised consumption site now has a dollar amount for how much it will cost to staff the facility. The province is setting aside $5.6 million to staff the site in Winnipeg’s downtown.

There is also a funding promise for food at personal care homes. The province is labelling $5 million to be spent on healthier, fresher foods for seniors.

Sala said the province also intends to open a new health care clinic in The Pas in honour of MLA Amanda Lathlin, who passed away last week. The finance minister said the facility is expected to open in 2030.

Infrastructure

The 2025 wildfire season was one of the worst in Manitoba’s history, and now the province is responding to try to prevent a similar situation in 2026 and for years to come. The government is working to get a new fire base built in the Thompson area that would cost $75 million.

As well, $1.2 million is being spent to add 19 more firefighters, $1 million to add 15 more staff at the Emergency Management Organization, and $1.2 million to improve weather information and fire mapping systems for the Manitoba Wildfire Service and $1.1 for aerial firefighting services.

Design work is underway to help improve highways in Manitoba. The province is working on the twinning of the Trans-Canada Highway to Ontario, improving PTH 2 in the southwest part of the province, and $4 million is being spent on the design of the Carberry overpass.

The design process for the overpass will start this summer. These and other projects are all part of a $3.8 billion commitment in capital projects.

The government is continuing to show support for the Churchill corridor by trying to bring more private-sector interest to the area with a new $10 million Churchill Catalyst Fund.

Additional budget details

Manitoba is working to add 12 new police officers at a price tag of $2.36 million. It is unknown where these officers will end up in the province.

The province also plans to launch an inquiry into the former PC government’s efforts to get an environmental licence for the Sio Silica project in 2023. There isn’t a price tag yet, but the government plans on naming a commissioner and terms of reference for the inquiry at some point this year.

Reaction to Budget 2026

Winnipeg Mayor Scott Gillingham said he was disappointed in this budget as there was no mention of the North End Sewage Treatment Plant.

The first phase of the upgrades to the treatment plant is nearly done and work on the second phase is expected to start in the back half of this year. The final phase is expected to cost $1.57 billion. Construction for that phase is scheduled to start in 2028.

Gillingham said it is the most important project in the province in his mind and is a driving force for the economy.

“If we don’t get that project built, fully funded and built, within the next few years, we’re going to have to put a complete stop on all future growth. There’ll be no more housing developed. There’ll be no more jobs created because no more businesses will be able to set up shop,” said Gillingham.

Progressive Conservative Leader Obby Khan said Manitoba is in trouble with a budget like this.

“There’s nothing in there for affordability. I’m shocked with the lack of announcements for businesses, for families, for economic growth. I’m shocked and I’m actually really disappointed by the lack of announcements or projects to grow our economy to pay for services in Manitoba,” said Khan.

“This budget fails to address the need of growing our economy to pay for services that we need in our economy. Instead, it relies almost solely on transfers from the federal government,” he said. “That is a major concern for all Manitobans, for us as a caucus as well…We will continue to be a have not province under this NDP government.”

PC MLA Kathleen Cook felt there wasn’t enough addressed to fix health care in the province.

“We’ve got some of the highest ER wait times in Canada. Record high ER wait times in Winnipeg. Three hospitals are grey-listed by the Manitoba Nurses Union. It’s unprecedented. Home care is in shambles. People are dying waiting for care. I don’t see a lot in this budget that’s intended to address that, and on ER wait times specifically, I expected to see a much bigger focus on reducing ER wait times. We didn’t see that in this budget. I think there’s a lot of questions about that,” said Cook.

Manitoba Chambers of Commerce president and CEO Chuck Davidson said the province’s priority in this budget is affordability for average Manitobans.

While he understands the approach, he said, from a business perspective, the budget did not address the challenges his members are seeing.

“They’re also challenged with increased costs,” Davidson said. “Trade and tariffs are an issue for them, as well as workforce.”

Davidson said he was looking for ways to address cost pressures for businesses and better support for businesses to reduce reliance on American customers.

Gina McKay, president of CUPE Manitoba, said there are a number of things to like on both the health care and childcare fronts.

“In health care we see some great commitments, addressing some core issues in health care. Mental health, addressing in the waiting rooms, looking at the ways we can build in beds so that we can help get Manitobans the care they need,” said McKay.

Noah Schulz, the provincial director of the Manitoba Health Coalition, said the increase in spending on health care is much needed, noting it’s a step toward restoring spending levels to what was seen in 2016-17.

“With this new injection of funding promised in the 2026 budget, we have hopes that this will get us to at least restoring that old funding level, which will certainly help us repair the health care system,” said Schulz.

Meanwhile, Social Planning Council executive director Kate Kehler worries cutting the PST on groceries will primarily benefit the wealthy, rather than lower-income Manitobans who need the assistance the most.

“We could have served low-income families better with a PST rebate cheque, and just targeted it better to low-income families,” she said.

However, Kehler praised the province’s plan to eliminate child care fees, saying it was something her organization advocated for.

Meanwhile, Churchill Mayor Mike Spence said this year’s budget showed the province’s commitment to the northern town, specifically,the Port of Churchill.

“Churchill is excited, and we’ll do it right,” he said.

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With files from CTV’s Rachel Lagacé and Kayla Rosen