Put fairness at centre of Manitoba budget

The thousands of Manitobans struggling to pay their rent and put food on the table are looking for relief in Manitoba’s upcoming spring budget. The wealthy are benefiting from the status quo; political leadership is needed to stop rising poverty and act on the gap between the rich and the rest of us. The Manitoba government must rise to the occasion and deliver strong policy responses to provide help and relief. Inaction will only let the income gap widen further.

Closing the gap between the rich and the rest of us is not only a moral and ethical imperative; it is also key to improving overall health, reducing crime, supporting labour force participation, and community well-being. Wealth concentration undermines democracy by enabling those with means to influence government in ways that benefit themselves to the disadvantage of the majority.

Recent Canadian data show income inequality at record levels, with the wealthiest households benefiting most. According to Statistics Canada, over the past year, those living in the lowest quarter have 0.5 per cent less disposable income. Those with the highest have 4.3 per cent more.

In the last budget, the Manitoba government took a promising step by clawing back the basic personal amount tax credit for those earning more than $200,000 a year. This is an important first step and should include more upper-class Manitobans.

The provincial government should also address excess income at the top end by introducing a high-income tax bracket. Manitoba is one of the only provinces without a fourth or higher tax bracket. Currently, Manitobans earning $100,000 or more are taxed at the same rate as those earning $150,000 or more. The sky will not fall if taxes on the rich are raised. Evidence shows that raising taxes on high earners does not cause an exodus of wealthy people.

By introducing one or more tax brackets just a few percentage points higher for the upper middle class and wealthy, Manitoba would raise the revenue needed to end the four-year freeze on welfare rates.

Nine out of 10 Canadians, across party lines, support increasing the tax rate on high incomes, according to recent polling.

But Manitoba is a laggard. We have worsened to the sixth-most unequal province after taxes and transfers, partly due to Manitoba’s below-average top marginal income tax rate. Manitoba’s tax and transfer system has room to be more progressive than other provinces in redistributing income and reducing inequality.

Manitoba should also catch up with federal measures and piggyback on the new Canada Groceries and Essentials Benefit. This is critical to maximize relief to low-income families, writes Canadian Centre for Policy Alternatives’ David Macdonald. This measure is a one-time payment for GST credit recipients and a top-up to the GST credit after this.

The GST credit is a tax-free, quarterly payment from the Canada Revenue Agency that helps low and modest-income families offset part of the GST paid on goods and services. Manitoba is the only province that charges PST but does not provide a credit for lower-income families. If Manitoba provided a sales tax benefit like Saskatchewan’s and matched it to the federal GST boost, eligible individuals would receive approximately $750 more per year, or a two-parent, two-child family would receive $2,093 per year — more money for groceries and other essentials. This measure would bring 8,000 people out of poverty. Manitoba can and should introduce a low-income PST tax credit to align with the federal effort and provide targeted affordability support for lower-income households.

Corporations and businesses in Manitoba should also pay their fair share for an educated and healthy population, and to address the root causes of crime — poverty and colonization. Manitoba is the only province that does not charge corporations on the first $500,000 of taxable income, and they pay a very low rate of tax thereafter. Corporations are still turning a profit, despite the tariff threats. A portion of this should be captured to fund public services that corporations and all of us rely upon.

There are additional ways to make the tax system more progressive and to provide a livable basic-needs benefit for low- and moderate-income Manitobans. The changes above are the first steps toward this goal.

Manitoba’s 2026 budget is a test of political will to act at a time when inequality is deepening, and too many families are falling behind. A more progressive tax system, stronger income supports, and fair contributions from those with the greatest means are practical, evidence-based tools that can reduce poverty, strengthen our economy and democracy.

Manitoba has the fiscal capacity and the public support to act. What is needed now is leadership that puts fairness at the centre of budget decisions and commits to building a province where everyone — not just those at the top — can live with dignity and security.

Molly McCracken is the Manitoba Director of the Canadian Centre for Policy Alternatives.