2025 Manitoba budget forecasts deficit as high as $1.9B if tariffs continue

In a new detailed article, Manitoba is facing an uncertain economic future as the province forecasts a deficit that could range from around $800 million to as high as $1.9 billion. The ongoing tariff wars and trade tensions with the U.S. and China are clouding the economic outlook, according to the NDP government’s latest budget.

The second budget from Premier Wab Kinew’s government, released on Thursday, outlines the potential impact of a continuing 25 per cent tariff on U.S. imports and the retaliation from the Canadian government. This could drag down economic activity and reduce incomes in Manitoba by $1,420 on a per capita basis.

To address the potential economic hit, the province is prepared to spend up to half a billion dollars to support tariff-affected businesses and workers. Additionally, the government plans to launch a range of new major infrastructure projects, including schools and hospital emergency departments, to cushion the impact of the economic uncertainty.

Finance Minister Adrien Sala emphasized that Manitoba is as prepared as possible for any economic turbulence. He described the budget as one that “meets the moment” the province is facing. However, University of Winnipeg economist Philippe Cyrenne expressed skepticism about the budget’s revenue projections during turbulent economic times.

The budget outlines two scenarios for the deficit: if trade tensions ease, the deficit will be $794 million, but if the tariffs continue, the deficit could reach $1.9 billion. The government has set aside $500 million for a tariff response contingency and $600 million for a revenue contingency to address the potential economic challenges.

In addition to supporting businesses affected by tariffs, the budget includes funding for post-secondary institutions to retrain workers, increased student loans, and grants. Manitoba’s total debt is $36.6 billion, up $1.4 billion from the previous year.

The government plans to boost infrastructure spending, with a focus on building new schools, hospital beds, and primary care clinics. The budget also includes funding for a new personal care home, health-care centres, and a strategy to move people living in tent encampments into permanent housing.

Other measures in the budget include reducing payroll taxes for businesses, expanding the free prescription birth control program, and providing rebates for homeowners and municipalities. The province also plans to end its contract with a U.S. firm for online park pass purchasing and make park entry free of charge this year.

Overall, the budget aims to address the economic challenges posed by ongoing tariff wars and trade tensions while investing in infrastructure and supporting businesses and workers in Manitoba. Despite the uncertainty, Finance Minister Adrien Sala remains confident that the government will achieve a balanced budget by 2027.