Manitoba budget banks on federal transfers to promise steep deficit cut, tax-free soda, chips
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 Iook 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.”
Budget 2026-27 projects a deficit of $498 million — roughly $1.2 billion less than the 2025-26 deficit expected at the end of this month.
The 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 give you that room to spend more on health care and education, rather than think about development strategies.”
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.
That change will cost $32 million annually, according to budget documents.
Non-food grocery items like toilet paper and toothpaste will still be taxed, as will pet food.
Basic grocery items, such as fresh fruits and vegetables, canned soups and most frozen food, are already exempt.
Sala said the the grocery PST cut builds on other steps the NDP has taken to address grocery costs, including freezing the price of a one-litre jug of milk, announcing a study to find ways to reduce grocery costs, and recently introduced legislation to address predatory or differential pricing.
ER changes, free child care for some
The budget is promising steps to ease congestion in hospital emergency departments afflicted by long waits.
The government will create new zones, adjacent to ERs, where patients who would currently be in waiting rooms will be seen by specialists.
The province will start with a cardiac care zone at St. Boniface Hospital, and mental health zones at Health Sciences Centre and St. Boniface.
The government is also vowing $22.1 million to expand cardiac care services at St. Boniface Hospital.
The budget is also promising to make child care free for low income families “who need the most help.”
An existing subsidy for low-income families provides $2-a-day daycare to 5,000 children, the province said. Sala said the new measure will “wipe away those costs.” Providing free care to those 5,000 children will cost $3.5 million annually, a provincial spokesperson said.
Homeowner tax credit up
The government is aiming to blunt some of the public criticism around rising school taxes by increasing the homeowners’ affordability tax credit to $1,700 a year from $1,600, starting in 2027.
However, homes with an assessed value over $1 million will receive a reduced credit starting the same year. That amount will be cut at a rate of $3.40 per $1,000 in assessed value. Homes valued at $1.5 million or more will no longer receive a credit.
For renters, the province will boost the tax credit to $675, up from $625, as part of the NDP’s four-year effort to restore the credit to $700, which was cut by the former Progressive Conservative government.
The budget also forecasts $20 million in new tax revenue from changes to the land transfer tax. The changes will keep people from avoiding the tax by using legal strucutres that separate the legal and beneficial ownership of a property, the budget says. It promises future legislation to make that happen.
Other affordability measures
Other affordability measures include a continuation of the rebate program for people buying electric vehicles, which was set to expire in March, and removing the tax on prenatal vitamins as of July.
The province is still evaluating whether to extend price controls to milk beyond one-litre containers, the budget says.
As well, the budget promises free transit for children and youth, but offers few specific details, saying the province “will work with the City of Winnipeg and other municipalities” to roll out the new program.
The budget also commits to hiring 19 more wildfire fighters, boosting staff with the emergency management office and upgrading fire mapping abilities. The budget also says government is planning to build a new “initial attack and fire base” in the Thompson, but offers no specifics on that.
“We’re working to ensure that Manitobans are protected,” Sala said.
