Facts Matter: Navigating 2025 Budgets—Tax Breaks, Deficits, and Manitoba’s Bracket Creep

Ontario presented its budget on May 15, making sure that every province and territory in Canada has outlined their financial strategies for the 2025-26 period. Initially, Prime Minister Mark Carney had retreated from his administration’s commitment not to introduce a budget this year but has since announced that one will be released this autumn.

Nearly all provinces are operating at a deficit, with Ontario, Quebec, and Prince Edward Island anticipating historic shortfalls—primarily due to the economic repercussions of U.S. tariffs. In contrast, Saskatchewan anticipates a slight surplus; however, the Moe administration hasn’t allocated funds for potential contingencies related to these tariffs.

This tax season sees numerous reductions across various provinces. Residents of Ontario, Alberta, Newfoundland and Labrador, as well as Saskatchewan benefit from financial assistance measures. In Nova Scotia, they’re boosting their basic personal exemption to retain additional funds for individuals. However, British Columbia has revoked some anticipated cuts yet continues with limited benefits.

On the contrary, certain regions are opting to increase taxes. In Quebec, they are boosting insurance premiums and implementing various income-generating strategies. Meanwhile, Nunavut is raising taxes universally, and the territories are adjusting property taxes according to inflation rates.

In Manitoba, which stands as the sole additional region implementing a novel tax for the current fiscal period, we see an indirect rise rather than a straightforward one. Although it doesn’t directly boost taxes, the Kinew administration has brought back “bracket creep,” a mechanism that was abolished under previous governance. By ceasing adjustments of these brackets according to inflation rates, salary increments might propel employees into upper taxation categories, thereby inflating their financial obligations towards the state. While this isn’t classified strictly as increasing taxes, the outcome remains identical.

This adjustment will impact employees at the minimum wage level, with their earnings increasing from $15.80 to $16.00 this autumn. As stated by a certified Winnipeg-based accounting company: “For an employee making the current minimum wage of $15.80, which will go up to $16.00 in October, there will be a 1.2% boost in their total gross income. Nonetheless, assuming everything else remains constant and not factoring in additional elements like higher CPP/EI payments, the aforementioned worker will see a 2.4% hike in their provincial taxes.”

Just like usual, the big letters give with one hand, but the fine print takes back with both.