WINNIPEG – The Manitoba government outlined major spending increases on capital projects and a mix of tax measures Tuesday in a budget that projects a $794-million deficit.
The NDP government said the potential threat from tariffs imposed by United States President Donald Trump cannot be ignored, and new spending and tax changes will protect jobs.
“We didn’t start this fight, but we are not backing down,” Finance Minister Adrien Sala told reporters.
“We’re Trump-proofing our economy.”
The budget boosts capital spending by hundreds of millions of dollars, including a four per cent boost to the highway budget and awarding municipalities four per cent of fuel tax revenues for arenas, playgrounds and other projects.
In an attempt to boost business investment, the NDP government is reducing the payroll tax paid by employers.
Starting in January, the threshold at which companies start paying the tax is to rise to $2.5 million of annual payroll, up from the current $2.25 million.
The threshold at which another rate kicks in is to rise to $5 million from $4.5 million.
In terms of tariff retaliation, cars manufactured in China and Tesla automobiles will no longer qualify for the provincial rebate on electric vehicles.
“It’s part of our government’s commitment to be elbows up,” Sala said.
The budget projects total spending at almost $26 billion. It offers a range of cost savings, tax cuts and tax increases for Manitobans.
The provincial free birth control program, currently limited to prescription items, is being expanded to include the morning-after pill.
Entry fees to provincial parks are being waived for one year, although fees for camping and other activities will continue.
A new security system rebate for small and medium-sized businesses, worth up to $2,500 per business, will be offered to reduce crime.
A tax credit for homeowners will rise by $100 to $1,600, although the government will take in $182 million more than under a rebate system enacted by the former Progressive Conservative government and cut by the NDP.
Wage earners will feel an impact. Starting this year, income tax brackets and the basic personal exemption will be frozen and no longer rise along with inflation. Someone earning more than $100,000 a year will pay an extra $87 this year.
The budget continues a series of deficits that stretch back to 2009, with the exception of surpluses in two years. It projects a deficit of $794 million this year on total spending of $25.8 billion.
If U.S. tariffs are imposed broadly and maintained, the deficit could rise to almost $1.9 billion.
The budget envisions hundreds of millions of dollars for supports for businesses, agricultural producers and individuals. There were few details, but the aid could include loans, money for worker retraining and more.
Sala said the government remains committed to balancing the budget before the next election, expected in 2027. This year’s projected deficit is already well above the amount contained in last year’s long-term forecast.
A political analyst said the NDP government has shown little sign of containing spending in order to balance the budget.
“At some point in time, tough choices will definitely have to be made,” said Paul Thomas, professor emeritus of political studies at the University of Manitoba.
This report by The Canadian Press was first published March 20, 2025.
