Manitoba: Budget 2026–27

Highlights

• Manitoba’s Budget 2026 marks a weaker fiscal starting position, projecting a deeper deficit of $1.7B (1.7% of nominal GDP) in fiscal year 2025–26 (FY2026), narrowing quickly to a shortfall of $498M (0.5%) in FY2027 on the back of a revenue rebound (graph 1). The FY2028 return‑to‑balance target remains intact. 
• The deterioration in FY2026 largely reflects a temporary revenue dip, with a rebound expected on stronger federal transfers and improving Manitoba Hydro results, bringing the revenue outlook back in line with the prior plan.
• The government modestly loosened its spending restraint and introduced targeted tax relief in Budget 2026, with the removal of PST on grocery food and new health‑care investments as the headline measures. Relative to last year’s budget, cumulative program spending was raised by $2.2B over FY2027–FY2028, absorbing the $2.0B in revenue gains projected since Budget 2025.
• Reflecting higher projected capital spending and wider deficits, near‑term provincial borrowing requirements have been revised up to $4.2B in FY2027, $6.4B in FY2028, and $6.6B in FY2029—a combined $873M increase over three years. 
• Manitoba forecasts that its net debt will rise from 37.9% of GDP in FY2026 to a peak of 38.2% in FY2027, then ease in the ensuing two years—on a slightly higher trajectory than in the previous plan and still among the highest of its peers.
• While most provinces are signalling fiscal deteriorations, Manitoba stands out by keeping its consolidation path largely intact despite a challenging year marked by softer revenues. The province’s FY2027 deficit is projected to be the smallest as a share of output among its peers. That said, margin for error has narrowed, as a deeper‑than‑expected near‑term deficit and a modest uptick in the debt‑to‑GDP trajectory introduce some near‑term risk that markets are likely to monitor.