Manitoba government spending targets unrealistic, Opposition Tories say

WINNIPEG — The Manitoba government’s plan to balance the budget in two years will require tighter spending restraint — something the Opposition Progressive Conservatives say is unrealistic.

The provincial budget released this week fleshes out the NDP government’s promise to end a string of annual deficits that stretch back to 2009, with two exceptions, by the 2027-28 fiscal year.

To get there, annual spending growth is to be limited to 2.1 per cent next year and 1.9 the year after. That’s a smaller amount than in recent years, as this year’s budget predicts spending to rise seven per cent higher from what was originally predicted in last year’s spending plan.

“They’ve shown that they cannot rein in their spending and they cannot stick to their budget plans,” Tory finance critic Lauren Stone said Friday.

She also accused the NDP of being overly optimistic about future revenue growth compared to other provinces.

Finance Minister Adrien Sala largely attributed the increased spending to wage increases for public-sector workers, as some had seen wage freezes or very small increases under the former Tory government.

“We saw what happened in our health-care system under the last government, when workers were leaving because they weren’t being respected,” Sala said.

“So those fair wages that we’ve offered are being reflected in this budget. We’re not going to see that kind of a wage-related lift in next year or the following year’s budget.”

An analysis done Friday by RBC said the balanced-budget target “remains narrowly within reach” and controlling spending growth to two per cent in the next two years will be critical to achieve that goal.

Sala has already had to adjust his balanced-budget plan since the NDP won the 2023 election.

Last year, the government’s books predicted a deficit of $796 million. It now forecasts to be $1.2 billion in the red, according to the most recent fiscal update, driven largely by wage costs and other items in health care. Spending levels in this year’s budget are at the level projected for 2027 in last year’s plan.

In addition, the government faces economic uncertainty from the threat of tariffs imposed by the United States and China. This week’s budget promises hundreds of millions of dollars in aid for businesses, agricultural producers and others, if tariffs are sustained.

Sala told the Manitoba Chambers of Commerce that he remains committed to the balanced-budget target.

“As somebody who’s spent some time with bond-rating agencies and credit-rating agencies, showing that focus on sustainability has a significant impact on our cost of borrowing,” he said Friday at the business group’s breakfast meeting.

The government is to get some help on the revenue side of the equation from a change to personal income taxes announced in the budget. Tax brackets and the basic personal exemption are to be frozen instead of rising with inflation, which means the government will take in more money as people’s wages grow.

The move is predicted to garner an extra $82 million a year for the province.

This report by The Canadian Press was first published March 21, 2025.

Steve Lambert, The Canadian Press