On March 24, 2026, the Manitoba government unveiled its 2026-27 provincial budget, setting the stage for a series of sweeping affordability measures while making a bold promise to dramatically reduce the province’s deficit. The budget, delivered by NDP Finance Minister Adrien Sala at the legislature, signals a clear shift from the austerity and spending cuts seen in other provinces, instead placing its bets on federal transfers and targeted investments in health care, child care, and cost-of-living relief.
“Good jobs, lower costs and better health [care] are what this budget is all about,” Sala told reporters, emphasizing the government’s choice to invest rather than retrench. “As I look 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,” he said, according to CBC.
At the heart of the new budget is a projected deficit of $498 million—$1.2 billion less than the deficit expected for 2025-26. This reduction bucks a national trend: neighboring Saskatchewan is forecasting an $819-million deficit, while Alberta and British Columbia are grappling with multibillion-dollar shortfalls. Manitoba’s total spending is set to rise to $27.3 billion, up $1.4 billion or 5.4% from the previous year. The government expects to balance the books before the next provincial election, slated for October 2027, despite having missed such targets in the past.
How is Manitoba able to make these promises while other provinces are tightening their belts? A key factor is a sharp rise in federal equalization payments. Next year’s transfer from Ottawa is expected to reach about $5 billion—roughly 70% more than five years ago. University of Winnipeg economics professor Philippe Cyrenne told CBC, “If you depend on transfer, you don’t have to think that seriously about economic growth issues. The transfer kind of gives you that room to spend more on health care and education, rather than think about development strategies.”
This reliance on federal support has drawn criticism from the opposition. Progressive Conservative Leader Obby Khan called the NDP’s projections “very rosy,” warning, “Instead, it relies almost solely on transfers from the federal government. That is a major concern for all... We will continue to be a have-not province under this NDP government.”
Among the most headline-grabbing affordability measures is the elimination of the provincial sales tax (PST) on all food items sold in grocery stores, effective July 1, 2026. This move extends the PST exemption beyond basic groceries—milk, produce, meat, and bread, which were already exempt—to include candy, snack foods, hot-and-ready meals, soda, and more. Non-food grocery items like toilet paper, toothpaste, and pet food will still be taxed. The government estimates the change will cost $32 million annually.
“We’re making life a little bit easier for parents who are picking up that rotisserie chicken to feed their kids after hockey practice or workers who want to grab a prepared salad,” Sala said, as reported by The Canadian Press. “Getting ready for a birthday party, you’ve got to buy those cans of pop and the chips. That’s part of every family’s expenses.”
However, not everyone is convinced the PST cut is the best way to help those in need. Molly McCracken, Manitoba director of the Canadian Centre for Policy Alternatives, argued, “Upper-income folks don’t need that break on their PST on consumable groceries.” She suggested the money would be better spent boosting income assistance for the most vulnerable.
Health advocates have also expressed concerns. Doctors Manitoba, which represents physicians across the province, worries the move could make junk food more accessible, particularly in remote communities where healthy options are already scarce. “When I work in the emergency room and I see a kid with a sore ear that’s drinking Pepsi and eating Doritos, I don’t want that to be the easiest accessible option for them and their family,” said Dr. Nichelle Desilets, the group’s president. “We want to see healthy foods prioritized.”
On the other hand, the Retail Council of Canada has welcomed the move. John Graham, regional director for the council, said, “We know the government’s been looking at a number of strategies to address food affordability, as have grocery stores, and this is one that’s real tangible and will help Manitobans.” Graham also noted an increasing trend of people buying prepared meals for convenience.
For families with children, the budget pledges free transit for kids and teens—a $10 million commitment—with the province working alongside Winnipeg and other municipalities to roll out the program. Sala highlighted the environmental benefits, saying, “It’s not just about affordability. It’s about our path to net zero [emissions]. And I think really excitingly, it’s about creating a new generation of bus riders.” Winnipeg Mayor Scott Gillingham called the goal “a good one,” though he noted the province has not yet revealed all the cost details. “When we can get more people riding transit, that’s a good thing. We’ll just have to work with the province to make sure we can do all this within budget,” Gillingham added.
Another significant measure is free child care for low-income families. The plan eliminates fees for 5,000 children currently paying $2 a day, at an annual cost of $3.5 million. This builds on Manitoba’s existing subsidy system and is intended to “wipe away those costs” for families who need the most help, according to Sala.
The budget also raises the education property tax credit for homeowners by $100 to $1,700 starting in 2027. However, a new clawback will reduce the credit for homes assessed at over $1 million, with those valued above $1.5 million losing the credit entirely. About 1,700 homes will be affected by the partial clawback, and roughly 350 homes will lose the credit altogether. The Manitoba Real Estate Association’s president, Stewart Elston, called the $100 bump “a positive step forward,” while the opposition argued it won’t keep up with rising school taxes in many areas, pointing out that some Winnipeg school divisions have raised taxes by more than 20% over four years.
Renters, too, will see relief: the annual tax credit for renters will rise to $675 from $625, part of a multi-year effort to restore the credit to $700 after previous cuts by the former government.
Health care remains a central pillar of the NDP’s agenda. The budget allocates $22.1 million to expand cardiac care services at St. Boniface Hospital, including the creation of specialized zones adjacent to emergency departments for cardiac and mental health care. The plan includes 18 new beds and a cardiologist stationed in the ER, aiming to ease pressure on overcrowded emergency rooms.
Other noteworthy measures include extending the electric vehicle rebate program, removing the tax on prenatal vitamins, and considering further price controls on milk. The province will also hire 19 new wildfire fighters and invest in a new fire base in Thompson, responding to last year’s near-record wildfire season. The budget assumes a return to more normal weather and sets aside $50 million for emergency expenditures—down from the $224 million spent on wildfires last summer.
Despite the ambitious investments, Manitoba’s government is banking on economic growth to help balance the books. The budget forecasts real GDP growth of 1.3% in 2026 and 1.7% in 2027, projecting an $8 million surplus for 2027-28. Still, as the province moves forward, questions remain about the sustainability of relying on federal transfers and whether these measures will be enough to address both affordability and long-term economic challenges. For now, Manitobans can expect some relief at the grocery store—and perhaps a little less stress on their wallets in the year ahead.