Credit rating agency says Manitoba’s recent tax changes outweigh affordability offers

WINNIPEG — The Manitoba government is expected to use more “revenue levers,” similar to its recent income and property tax changes, as part of its plan to reduce the deficit, a credit-rating agency report says.

S&P Global Ratings has affirmed the Manitoba government’s existing short-term and long-term credit ratings and says the outlook for the province is stable, based in part on expected revenue changes and spending control.

“The stable outlook reflects our expectation that, despite economic growth and trade uncertainty, Manitoba will deploy revenue levers and expenditure management to generate stronger fiscal outcomes in the next two years,” the report, issued May 26, said.

The NDP government, elected in 2023, has promised to reduce costs for Manitobans. It has taken out advertising to promote its cut to the provincial fuel tax, an increase to a tax credit for renters and other measures.

But the money forgone by the province for those measures is outweighed by recent tax changes that are boosting provincial revenues, a director with S&P said. That includes a change in this year’s budget that will no longer see income tax brackets automatically rise in line with inflation.

“That alone is enough to offset all the affordability measures that they’re putting in,” Bhavini Patel, director in S&P’s Canadian international public finance group, said in an interview.

The NDP government has promised to balance the budget before the next election, slated for 2027. That would end a string of annual deficits that stretches back almost continuously to 2009, with the exception of two surpluses.

Part of the province’s revenue growth has come from recent changes that will see many property owners and income-earners pay more.

In last year’s budget, the government changed the way education tax credits on property are calculated.

The government estimated the change would net the province an extra $148 million a year, although that number is likely to grow due to recent increases in property assessments and taxes levied by school divisions.

In this year’s budget, the government stopped indexing income tax brackets and the basic personal exemption to inflation. By keeping the brackets and exemption constant as wages increase, unlike most provinces, the government is forecasting an extra $82 million in revenue.

Finance Minister Adrien Sala said he’s not looking at future tax changes aimed at garnering more money, and is expecting an economic boost to increase revenue.

“I think the biggest driver of new revenues will be economic growth,” he said in an interview. He pointed to the recent start of construction of the Alamos gold mine near Lynn Lake as an example.

The government is also looking at keeping annual spending growth in check in order to balance the budget, he said.

This report by The Canadian Press was first published June 10, 2025.

Steve Lambert, The Canadian Press