NDP government ‘Trump-proofing our economy’ in provincial budget Prepares one plan for tariffs, another without By: Chris Kitching and Carol Sanders Posted: 3:02 PM CDT Thursday, Mar. 20, 2025 Last Modified: 6:55 PM CDT Thursday, Mar. 20, 2025 Updates

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The NDP government’s second budget aims to soften the blow of U.S. and Chinese tariffs with contingency plans and a record $3.7 billion in capital spending intended to spur economic growth and create jobs in the face of uncertainty.

But the cost of “Trump-proofing” Manitoba’s economy could result in a whopping $1.9 billion deficit, the provincial budget released Thursday said.

Finance Minister Adrien Sala said the province’s defence plan in the face of a trade war is to launch a $3.7 billion capital spending program — the largest ever — to spur economic growth and create jobs in the face of uncertainty.

“This budget meets the moment that Manitoba and our country is in right now,” Sala told reporters Thursday. “We didn’t start this fight, but we are not backing down. We are building up our province. We are Trump-proofing our economy.”

The 2025 fiscal blueprint prepared two plans — one without tariffs and one if U.S. President Donald Trump imposes sweeping 25 per cent tariffs on April 2.

The document includes a forecast “baseline” deficit of $794 million that could increase to nearly $1.9 billion in response to U.S. and Chinese tariffs.

While Sala hopes Trump cancels the proposed tariffs, the “contingency budget” is ready if the president presses ahead.

A $1.1-billion tariff relief plan would include up to $200 million to help businesses, up to $100 million for farmers and $100 million for families. It includes $85 million to train workers or students. The province already announced payroll and retail sales tax deferrals for businesses.

The budget doesn’t come close to “meeting the moment,” said Progressive Conservative finance critic Lauren Stone.

“What this tells me is we are headed into an economic recession and there is still no tax relief for Manitobans or businesses in the immediate term,” she said after Sala tabled the budget. It included increasing the payroll tax exemption threshold from $2.25 million to $2.5 million starting Jan. 1, 2026, and raising the reduced-rate threshold. That would benefit an estimated 875 employers and would exempt close to 150 from having to pay the tax, the budget said.

“Manitobans are feeling the pressures today,” Stone said. “Who knows if businesses are even going to be in place in a year from now?” the finance critic asked. “The government has talked a lot, promised a lot, but not actually pulled the trigger on what Manitobans need.”

Manitoba’s newest retaliatory measures include removing Tesla vehicles — the manufacturer run by Trump ally Elon Musk — and Chinese-made vehicles from an electric vehicle rebate program.

“It’s part of our government’s commitment to be ‘elbows up’,” said Sala, using the hockey analogy/trade war cry.

The budget said U.S. tariffs, and retaliatory measures by Canada, would slash Manitoba incomes by $1,420 per capita and reduce the province’s GDP by up to $3.6 billion, or 3.8 per cent, in a “worst-case scenario” comparable to the 2009 recession.

The NDP’s plan to counter the impact of tariffs includes multimillion-dollar infrastructure projects — many of which were previously announced initiatives.

Sala said nearly 18,000 jobs will be created via large-scale projects, including the second phase of Winnipeg’s North End Water Pollution Control Centre, the Port of Churchill and Hudson Bay Rail Line, the Lake St. Martin and Lake Manitoba outlet channels, a new gold mine near Lynn Lake and a new airport for Wasagamack First Nation.

“We are going to build, build, build over the next many years to make sure our economy keeps humming,” Sala said, listing funding for new schools and health-care facilities announced previously, including the centre that’s part of the Portage Place redevelopment.

What Manitoba needs is a trade strategy, and that’s not in the budget, the PC finance critic said.

“The cost of living and U.S. and Chinese tariffs are the No. 1 issue that Manitobans care about right now.”

Stone said other provinces have come up with strong trade strategies, pointing to Saskatchewan Premier Scott Moe announcing funding for a trade export program with international officers.

“They’re making very strong investments in trade and looking at external markets other than the U.S., and we’re not seeing that in Manitoba today,” Stone said.

Sala said the province’s economy is expected to grow at a steady pace and that the budget will return to balance by 2027-28, at the end of the government’s first term.

Stone doesn’t see how that’s possible.

“I’ll believe it when I see it. They are placing a lot of faith in federal transfers increasing this year.”

The province is expecting a $639 million increase in federal transfers in 2025-26.

“It’s part of our government’s commitment to be ‘elbows up.’”–Finance Minister Adrien Sala

Budget 2025 outlines $25.8 billion in spending, an increase of $1.7 billion from 2024 that is largely due to wage increases for health-care workers and capital projects. Revenue is expected to drop by $70 million, largely because of Manitoba Hydro’s drought-related losses.

The province’s debt is expected to climb to $36.5 billion this year, with $2.3 billion allocated to service that debt. Its debt-to-GDP ratio is forecast at 36.9 per cent and would climb to 38 per cent if the province posts a $1.9 billion deficit.

Four per cent of gas tax revenue will go toward a new One Manitoba Growth Revenue Fund to help municipalities build hockey rinks, playgrounds and community centres. The tax was cut to 12.5 cents a litre from 14 cents on Jan. 1, after it was suspended for all of 2024. The fund is part of $424.3 million in cash for municipalities, including $240.4 million for Winnipeg alone, which is an extra two per cent from 2024.

chris.kitching@freepress.mb.ca

carol.sanders@freepress.mb.ca

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Manitoba 2025 budget

Chris Kitching
Reporter

As a general assignment reporter, Chris covers a little bit of everything for the Free Press.

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Carol Sanders
Legislature reporter

In 1997, Carol started at the Free Press working nights as a copy editor. In 2000, she jumped at a chance to return to reporting. In early 2020 — before a global pandemic was declared — she agreed to pitch in, temporarily, at the Free Press legislature bureau. She’s been there ever since.

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