Manitoba Premier Wab Kinew says his government’s second budget will focus on building up the province as it contends with tariff wars on two fronts.
“If we’re heading into a period where people are worried about the economy, what’s the tried and true way of supporting jobs? It’s putting people to work, building highways, building roads, building hospitals, building schools, building personal care homes,” Kinew said Tuesday, in advance of the Thursday unveiling of his government’s 2025-26 spending plan.
“There’s going to be a lot of projects to just build, build, build, while we try and stabilize these economic uncertainties we’re facing.”
Kinew said the budget will account for the U.S. tariffs Manitoba is now facing and additional levies that may follow.
The budget plan will include two financial scenarios: one where tariffs are removed, and another where they persist and the province steps up with new financial supports for the economy and businesses, Kinew said.
“We’ve got to be there with flexibility, but most importantly transparency, so people see the economic plan is one that’s real and it’s going to help you.”
Trade wars with U.S., China
The NDP government previously said businesses affected by the tariffs can choose to defer paying both the health and post-secondary education tax levy — commonly called the payroll tax — and the provincial sales tax for at least the next three months, starting with the February tax period.
The action is part of Manitoba’s response to the evolving tariff threat from the U.S. Last week, President Donald Trump hit Canada with 25 per cent tariffs on steel and aluminum. Trump plans to implement additional levies on April 2.
In response, Canada retaliated with 25 per cent tariffs on $29.8 billion worth of U.S. goods.
Meanwhile, China slapped 100 per cent tariffs on Canadian agricultural products — including canola — in retaliation for 100 per cent tariffs on Chinese-made electric vehicles and a 25 per cent levy on Chinese aluminum and steel products that Canada imposed in October to match similar U.S. levies.
The economic fallout from these trade wars will make Manitoba’s path to balance the budget by 2027 narrower. Balancing the budget in its first term was one of the NDP’s promises during the 2023 provincial election campaign.
Even before the tariffs, the province said in December its projected deficit for the current fiscal year had ballooned by half a billion dollars, to a total of $1.3 billion, which it said was largely the result of overspending on health care.
The government has pledged to limit spending increases in future years to balance its budget, but hasn’t articulated how it would do so, after overspending budget estimates in its first year, along with promising to hire more health-care workers and police officers and find homes for people living in encampments.
The province must also find money to boost Manitoba Hydro’s generating capacity, so the provincial Crown corporation can stave off a power shortage expected as soon as five winters from now. The utility faces billions in deferred maintenance costs and must make additional billions worth of investments in new power generation.
Kinew’s pledge of more infrastructure projects over the next year may also strain the province’s finances.
The province divulged some of the new infrastructure projects in the lead up to this week’s Transcona byelection: new kindergarten to Grade 8 schools in Devonshire Drive West and Prairie Pointe in Winnipeg, along with a K-8 school in West St. Paul. The Park Manor personal care home in Winnipeg’s Transcona neighbourhood is also set for a 90-bed expansion.
The province may make headway this year on one of Kinew’s top election promises: reopening three Winnipeg emergency departments.
When last year’s budget was released, Kinew said he expects “shovels in the ground” for a new emergency room at Victoria Hospital within two years. Construction on that expansion has yet to start.
New security rebate for businesses
Small- and medium-sized businesses can also expect support to protect their workplaces from vandalism and break-ins.
The budget will include $10 million for a new security rebate program specifically for businesses, an official in Kinew’s office said.
The rebate will offer these owners up to $2,500 to allow them to purchase security equipment, the official said.
A previous home security rebate created by the government that offered a maximum $300 rebate to businesses and homeowners was oversubscribed and quickly ran out of funds.
On the revenue side, Manitoba’s books are helped this fiscal year by the reinstatement of the provincial gas tax, albeit down to 12.5 cents a litre from 14 cents. The province surrendered around $340 million last year because of a break on that tax.
