Steven Sukkau
Local Journalism Initiative Reporter
Winnipeg Sun
The Canadian Taxpayers Federation is warning that Manitoba has become the most heavily taxed province in Western Canada for middle–income families, and is urging Premier Wab Kinew to use Budget 2026 to “rein in spending,” cut the sales tax and scrap what it calls a “sneaky” income-tax hike.
In a new pre-budget proposal released this week, the CTF says a family earning $75,000 in Winnipeg now pays more in provincial taxes than the same family in Regina, Calgary, Vancouver, Toronto or Montreal and it’s blaming both high sales tax and the government’s decision to quietly end inflation indexation on income-tax brackets.
“Manitoba families pay more in provincial taxes than anywhere else in Western Canada,” said Gage Haubrich, Prairie Director for the CTF. “Premier Wab Kinew needs to end his sneaky bracket creep tax hike and cut the sales tax to provide Manitoba taxpayers with much-needed relief.”
The pitch: $500M in tax cuts, $2.7B in spending reductions
The CTF’s 2026 blueprint, titled Keeping Promises and Delivering Relief, lays out a two-part strategy:
- Roughly $500 million in annual tax relief, and
- About $2.7 billion in spending cuts and savings, which the group says would be enough to stop new borrowing and start paying down provincial debt.
Key recommendations include cutting the Retail Sales Tax from 7 to 6 per cent, which the CTF estimates would provide $418 million in annual tax relief and save the “average Manitoban family” about $315 a year, and ending “bracket creep” by re-indexing income tax brackets to inflation. The organization says restoring indexation would deliver $82 million in immediate tax relief this year and prevent automatic tax hikes when wages merely keep pace with inflation.
On the spending side, the group argues that Manitoba can find at least $2.2 billion in savings by bringing government compensation more in line with the private sector, which they estimate would save about $508 million; eliminating corporate subsidies and other “corporate welfare” programs, projected to save roughly $523 million annually; and rolling back overall spending growth to pre-pandemic trends, adjusted for inflation and population, a move they say could save approximately $1.7 billion.
Taken together, the CTF says its package would have a net positive budget impact of roughly $2.2 billion, allowing Manitoba to stop increasing the debt and begin paying it down.
One of the sharpest shots in the report is aimed at the government’s 2025 decision to stop indexing Manitoba’s income-tax brackets to inflation.
When brackets are indexed, the income thresholds rise with inflation each year, so people who only get small cost-of-living raises don’t get pushed into higher tax brackets.
When tax brackets aren’t indexed to inflation, rising prices can push taxpayers into higher brackets even when their real purchasing power hasn’t actually changed, effectively increasing the amount of tax they pay without any explicit decision or vote to raise rates.
The CTF calls that “sneaky bracket creep” and pegs the cost to Manitobans at $82 million this year alone, warning that the hidden tax take grows every year if inflation persists.
“Taxpayers shouldn’t be punished for receiving a cost-of-living pay raise,” the report argues, calling bracket creep “one of the least transparent ways” to hike taxes.
The group notes that Manitoba originally scrapped bracket creep in 2017, before reversing course in Budget 2025. It points out that other provinces such as Saskatchewan, Nova Scotia and P.E.I. have recently moved to protect taxpayers by indexing, or re-indexing, their tax brackets.
Manitoba’s tax gap with other cities
To illustrate its point about competitiveness, the CTF leans on numbers from Saskatchewan’s 2025 budget comparing provincial tax bills for a representative $75,000-income family in major Canadian cities. According to that data:
- Winnipeg: $5,830 in provincial taxes
- Regina: $3,490
- Calgary: $2,468
- Vancouver: $1,638
- Toronto: $2,720
- Montreal: $3,379
The CTF argues that cutting the sales tax and ending bracket creep would help close that gap and make Manitoba more competitive at a time when governments are trying to attract workers and investment.
“Stop the spending spree”: debt, interest and wage cuts
The other half of the CTF plan zeroes in on the province’s debt and operating costs.
According to the organization’s analysis of recent public accounts and budget documents, Manitoba is increasing the provincial debt by about $2.2 billion this year, has grown total debt by roughly 61 per cent since 2016 to a projected $37.4 billion by the end of 2025–26, and plans to spend about $2.3 billion this year on interest alone, which the CTF calculates amounts to approximately $1,550 per Manitoban.
“Manitoba taxpayers can’t afford to keep wasting billions of dollars every year on debt interest payments,” Haubrich said. “The Manitoba government needs to find savings and rein in spending in Budget 2026 to start paying down debt.”
The group argues that if Manitoba didn’t have to spend over $2 billion a year on interest, the province would be projecting a sizable surplus rather than more red ink, money that could otherwise fund services or tax relief.
Targeting public-sector pay and pensions
The report calls personnel services, salaries, benefits and pensions for government employees, “the largest line item in Manitoba’s budget,” pegging it at $10.6 billion, or about 101% of all tax revenue collected.
Citing a recent Fraser Institute comparison, the CTF says government workers in Manitoba enjoy a 4.8 per cent wage premium over comparable private-sector workers, are more likely to have defined-benefit pensions, and tend to retire earlier while also having higher job security.
To “promote fairness” and free up money for tax relief, the group is urging a 4.8 per cent reduction in total employee compensation costs, achieved not only through wage restraint but also by not replacing what it considers unnecessary positions when employees leave or retire, encouraging early retirement, and moving applicable staff from defined-benefit to defined-contribution pension plans.
The report also takes aim at transition allowances for departing MLAs, noting that after the last election, defeated or retiring members were eligible for $1.8 million in so-called “golden parachutes.”
“Corporate welfare” in the crosshairs
On top of public-sector compensation, the CTF is calling for a full stop to what it labels “corporate welfare,” subsidies, loans and funds aimed at specific sectors or companies.
The report tallies up $95 million in new business supports introduced in Budget 2023, including $50 million for a venture capital fund, $35 million in economic development loans, and $10 million for the Manitoba Mineral Development Fund, followed by $50 million for a new Strategic Innovation Fund in Budget 2024, an additional $23.4-million grant to a bus company for a new facility, and another $50 million added to the Strategic Innovation Fund in Budget 2025.
Drawing on research from think-tanks and economists, the CTF argues that such subsidies have “little impact” on growth or jobs and mostly reward companies with the best lobbyists, not the best business plans. It points out that from 2011 to 2021, Manitoba spent about $5.8 billion on business subsidies, an average of $523 million per year.
“Corporate welfare doesn’t work,” the report states. “Handouts only result in single companies getting payouts, while broad-based tax relief allows all businesses to retain more money to hire new workers and invest in new equipment.”
Call to resurrect “real” balanced budget laws
Beyond the 2026 budget, the CTF wants Manitoba to resurrect what it calls “real balanced budget legislation” with teeth.
The group points back to a 1995 Gary Filmon–era law that required cabinet ministers to take pay cuts if the province ran a deficit, including a 20 per cent reduction to their ministerial top-up pay after one deficit and a 40 per cent cut if the deficit continued for a second year.
In today’s dollars, with cabinet ministers earning nearly $59,800 extra for their roles, that would mean losing up to $24,000 a year.
The current law is far weaker, the CTF argues, because ministers are exempt in their first year, can avoid penalties simply by reducing rather than eliminating the deficit, and can even have docked pay repaid once the budget is eventually balanced.
The report notes that as Opposition leader in 2018, Wab Kinew himself criticized those changes, famously asking:
“Why wouldn’t they just pass a law that says if you run a deficit, you take a pay cut?”
The CTF now wants the premier to follow through on that rhetorical challenge and restore the tougher 1995 rules.
What happens next
The Manitoba government’s pre-budget consultation process runs until Feb. 21, 2026, giving individuals and organizations a window to respond to proposals like the CTF’s before Finance Minister and Premier Wab Kinew finalize Budget 2026.
