Manitoba Budget 2026: Lower Grocery Costs, Bigger Tax Credits, and a Path to Balance
Grocery bills, rent, and property taxes — for many Manitoba families, these are the costs that eat into every paycheque. Manitoba’s Finance Minister delivered Budget 2026 on March 24, with a clear theme: “Good Jobs, Lower Costs, Better Health Care.” The budget proposes a mix of tax relief, healthcare investments, and affordability measures aimed at easing everyday expenses for individuals, families, and businesses across the province.
Here is a closer look at what is changing and what it could mean for your household and your business.
PST Removed on More Grocery Store Foods
One of the biggest proposed changes is the removal of the provincial retail sales tax (RST) on additional food and beverages for human consumption sold at grocery stores, effective July 1, 2026. Basic groceries like bread, milk, and fresh produce were already exempt. This expansion covers items that were previously taxed, including ready-to-eat prepared foods like rotisserie chickens, sandwiches, soups, sushi platters, and cold cuts, as well as snack foods, candy, and food and beverages containing 1% alcohol or less.
Prenatal vitamins would also become RST-exempt starting the same date.
The RST will still apply to beverages with more than 1% alcohol, dietary supplements, and non-food items sold in grocery stores. Restaurant meals are not included in this change. The government estimates these savings at up to roughly $100 per year for many families, depending on shopping patterns.
Bigger Tax Credits for Renters and Homeowners
Budget 2026 proposes increases to two affordability tax credits that directly reduce housing costs for Manitobans.
The Renters Affordability Tax Credit is proposed to rise to a maximum of $675, up from $625. Seniors with a family net income below $40,000 would also see their top-up increase to $385.71, up from $357.14. These changes would apply starting with the 2027 tax year.
For homeowners, the Homeowners Affordability Tax Credit is proposed to increase to $1,700, up from $1,600, for the 2027 property tax year. Starting in 2027, however, the credit would begin to be reduced for properties with an assessed value above $1 million, at a rate of $3.40 per $1,000 of assessed value over that threshold. Properties assessed at $1.5 million or more would no longer qualify for the credit.
Free Transit for Youth
The budget proposes $10 million to make public transit free for children and youth. This measure could make a real difference for families with school-aged kids who rely on buses to get to school, activities, and after-school jobs.
Healthcare Gets Another Boost
For the third year in a row, the provincial government is proposing increased healthcare spending. According to the government, more than 4,000 net new healthcare workers have been added to front-line roles since it took office. Budget 2026 builds on that momentum with several new investments.
A proposed $22.1 million is earmarked to re-establish a Cardiac Centre of Excellence at St. Boniface Hospital, now called Heart Care Manitoba. The budget also proposes funding for 200 additional hip and knee surgeries at the Selkirk Regional Health Centre and 3,250 more MRIs across the province. On the infrastructure side, $71.8 million is proposed for new personal care homes in Lac du Bonnet, Arborg, and Transcona, along with $36.1 million for new emergency rooms at Victoria and Eriksdale hospitals.
These investments are designed to reduce wait times and expand access to care closer to home — something that matters whether you live in Winnipeg or in a rural community.
Education and Workforce Training
Budget 2026 proposes $118 million to build four new schools across the province. Adult literacy programs would receive an additional $2.5 million in funding to help more Manitobans complete their education.
For the skilled trades, the budget includes a commitment to train 40% more apprentices. A new $10-million Churchill Catalyst Fund is proposed to attract private-sector investment in an energy corridor, with the goal of creating long-term jobs in northern Manitoba. The province is also proposing to make child care free for families who need the most support.
What Is Not Changing for Businesses
The budget does not propose any changes to Manitoba’s corporate income tax rates. The general rate stays at 12%, manufacturing and processing stays at 12%, and the small business rate remains at 0% on the first $500,000 of active business income. Combined federal and provincial rates remain at 27% for general and M&P income, and 9% for small business income.
The Film and Video Production Tax Credit will see administrative improvements, including a new mandatory pre-certification process and the ability to include eligible non-resident labour costs on advanced certificates. These changes are designed to strengthen the credit while reducing the potential for fraud.
Starting January 1, 2028, all businesses registered to collect RST will be required to file, remit, and pay the tax electronically. This is a change worth planning for now if your business currently files on paper.
Land Transfer Tax Rules Tightening
Manitoba is proposing legislative amendments to prevent the avoidance of land transfer tax through certain legal structures where legal and beneficial ownership are separated. These changes are planned for January 1, 2027, and are aimed at closing loopholes rather than increasing rates.
The Bigger Fiscal Picture
The province is projecting a deficit of $1.7 billion for 2025–26, largely due to wildfire costs and lower-than-expected Manitoba Hydro net income. Budget 2026 proposes to cut that deficit sharply to $498 million in 2026–27, with a projected surplus of $8 million by 2027–28.
Revenue is expected to grow roughly 10% year over year, driven by a rebound in Hydro income, higher federal transfers, and growth in income tax revenue. On the spending side, total expenditure growth is pegged at 4.6% for 2026–27. Strategic infrastructure spending is proposed at $3.7 billion for the fiscal year and is expected to average over $4.3 billion annually over the next five years.
Manitoba currently holds one of the smallest deficit-to-GDP ratios among Canadian provinces and remains one of the few charting a clear path back to balance. That said, spending pressures and economic uncertainty could test these projections in the years ahead.
Budget 2026 covers a lot of ground — from everyday savings at the grocery store to major healthcare expansions and a tightening fiscal path. Many of these measures take effect at different times, so it is worth reviewing which changes apply to your situation and when they kick in.
Sources
[Province of Manitoba Budget 2026] – Government of Manitoba – https://www.gov.mb.ca/budget2026/index.html
This content is provided for general informational purposes only. It is not intended to provide investment, tax, or legal advice, and should not be relied upon as such.