Manitoba: Budget 2025 - A Tough Balancing Act with a Twist

Manitoba’s 2025 Budget maintains a largely intact consolidation path in its baseline, with an improved revenue outlook offsetting new spending. The deficit is projected to dwindle rapidly from $794M in fiscal year 2025–26 (FY2026) to achieve a surplus by FY2028, unchanged from the previous budget.

However, there’s a twist. The alternative scenario factoring in tariff impacts sees the deficit deepen to $1.9B in FY2026, under assumptions in line with our current forecast.

Spending has increased again but remains targeted, with a primary focus on healthcare and additional measures for cost-of-living and business support. The budget emphasizes capital spending to fund new and existing projects in healthcare and education, aiming to support growth and create jobs.

The net debt-to-GDP ratio is projected to rise, peaking at 37.1% in FY2027, though on a lower trajectory than previously planned. Manitoba continues to have one of the highest debt burdens among Canadian provinces.

Manitoba's updated budget is a pragmatic plan grounded in reasonable economic assumptions and deploys revenue gains to investments in key services, positioning the Keystone province well to brace against stronger economic headwinds in the near term. Although the government remains committed to balancing the budget, achieving a balanced book by FY2028 is contingent on maintaining spending restraint in the outer years and the absence of material impacts from tariffs.