The Manitoba government says its deficit for the last fiscal year was $832 million, about half of what it projected in December. Premier Wab Kinew and Finance Minister Adrien Sala released the province’s audited public accounts for 2025-26 on Monday. The deficit is roughly half the $1.66 billion forecast in the third-quarter update but higher than the $794 million estimated in the spring budget. “This puts us on track to balance the budget next year, just like we promised,” Kinew said at a news conference. The NDP took office in October 2023, partway through a fiscal year that ended with a $1.97 billion deficit, which the government attributes to the previous Progressive Conservative (PC) government. It has promised to balance the budget by 2027-28. Sala said revenues came in $624 million higher than the third-quarter forecast. He said personal income tax was the biggest factor, up $378 million on a stronger labour market and higher incomes. Corporate income tax and retail sales tax revenues were also higher, he said. The government said tax revenue ended up $558 million above the spring budget. Those gains helped offset lower federal transfers and lower-than-expected profits from Manitoba Hydro, according to the report. It said the Crown corporation lost $446 million because of drought conditions, contrary to the $220 million profit originally budgeted. It also said federal transfers came in $250 million below budget. Sala said much of that was childcare money tied to infrastructure spending that didn’t happen in the fiscal year but is still coming. Health overspending reined in, Sala says Sala said expenses were $210 million lower than in the third-quarter update, driven largely by the Health, Seniors and Long-Term Care department, which he said effectively hit its budget target. He said the department had been trending toward an overspend as the province dealt with the wildfire season but brought spending back in line. The public accounts show health finished the year $65 million over its original budget. According to the report, health care is the largest share of provincial spending, at about 37 per cent, or roughly $10 billion, of total expenses. The report said the 2025 wildfire season, in which over 400 fires burned more than two million hectares, cost the province $321 million. It put the province’s net debt at $36.5 billion, or 36.4 per cent of GDP, with debt servicing costs of $2.3 billion. Sala said debt servicing has fallen to 8.9 cents of every revenue dollar, from 9.9 cents under the previous PC government. The government also announced a $600-million deposit into its fiscal stabilization fund, commonly known as the rainy-day fund. It is the first deposit in five years and the largest in more than 20 years, according to the province. Sala said the deposit more than doubles the fund’s balance and brings it to its target level for the first time since 2020-21. Tariffs, wildfires and drought Sala called the result a “significant improvement” from the forecast, particularly given the challenges the province faced. He pointed to U.S. tariffs, the worst wildfire season in 30 years, and significant drought. He said Budget 2025 had included a downside tariff scenario in which GDP could fall by $3.6 billion, adding that “the worst did not come to pass.” According to the report, real GDP grew 1.3 per cent in 2025, with agriculture and related industries up 8.8 per cent and construction up 5.2 per cent. “We have a lot to be proud of,” Sala said. Kinew, meanwhile, took aim at U.S. President Donald Trump. “Donald Trump really thought he was going to be the bully and push us around, but it turns out the Manitoba economy is a lot stronger,” Kinew said. When asked whether the results give the government room for tax breaks or big spending in an election year, Kinew pointed to global instability and rising borrowing costs. He said the government needs to “build up our fiscal firepower” in case of further shocks. Kinew also said Manitoba faces what he called a “major fiscal cliff” starting next spring, tied to federal health transfers and bilateral health agreements. He said the government wants to work with Ottawa to extend them. Progressive Conservative Leader Obby Khan called it “very convenient” for the premier and finance minister to paint a “rosy” picture of the province’s finances, arguing the numbers look very different for ordinary Manitobans. “Every Manitoban I’ve spoken to has said they are struggling with affordability. They’re struggling with paying the bills. They’re struggling with putting food on the table,” Khan said. Sala said the province’s first-quarter update is expected next week. The full report can be read online.
