Manitoba pulls U.S. booze, offers tax deferrals to businesses in wake of tariffs

WINNIPEG — The Manitoba government offered tax deferrals to businesses and pulled American products from liquor stores Tuesday in response to tariffs imposed by U.S. President Donald Trump.

Businesses affected by the tariffs will have the option of deferring payments of both the provincial sales tax and the health and post-secondary education tax levy — commonly called the payroll tax — for at least three months.

“These deferrals … will mean that businesses can keep cash on hand to keep people working,” Kinew said outside the legislative building, where a giant Canadian flag hung above the main entrance.

The payroll tax charges employers a percentage of their payroll. Businesses with payroll of less than $2.25 million a year are exempt.

The ban on U.S. liquor is expected to affect about six per cent of products sold by Crown-owned Manitoba Liquor and Lotteries, including 409 spirits, 341 wines and many beers and other products. The ban only applies to products made in the U.S., not to U.S.-based brands such as Budweiser that are brewed in Canada.

It’s not only government-run stores that will see American products removed. Private wine stores have been asked to follow suit and the province will stop offering American products to private beer vendors through its wholesale channel, Kinew said.

Kinew hinted at other retaliatory measures in the days ahead, such as not allowing U.S. companies from bidding on Manitoba government contracts and cutting exports of hydroelectricity.

“If these tariffs persist, we will continue to roll out additional non-tariff countermeasures to stick up for Manitobans and to stick up for Canada,” the premier said.

Keystone Agricultural Producers, a major agricultural group, said the U.S. tariffs will harm farmers and consumers on both sides of the border.

Manitoba’s agri-food exports were $9.28 billion last year, with 46 per cent going to the U.S., it said.

“These tariffs will not only add costs and threaten Manitoba farmers’ ability to operate but will impact the livelihoods and purchasing power of countless individuals and businesses on both sides of the border, resulting in increased food costs for U.S. consumers,” the group’s general manager, Colin Hornby, said in a news release.

The Manitoba Chambers of Commerce said its members face a lot of uncertainty about the extent of the impact of the U.S. tariffs.

“Some of the companies that I’ve talked to do 70 to 80 per cent of their business south of the border,” chamber president Chuck Davidson said.

“How big of an impact is that going to be? Are those U.S. customers simply going to go away?”

One Winnipeg-based craft brewery said it would like to see the province act to remove interprovincial trade barriers.

The Nova Scotia government recently introduced a bill aimed at reducing those barriers. Provisions in the bill would only be extended to provinces or territories that adopt similar legislation.

Kevin Selch, founder of Little Brown Jug Brewing Co., said he’s “perplexed” why more premiers haven’t moved forward with similar legislation.

“Not only would it make an impact on the economy, it would create business confidence that the political class can actually address some of these issues,” he said.

Kinew said he’d like to see fewer restrictions on direct-to-consumer alcohol sales across provincial boundaries and that some type of agreement between governments is expected soon.

— With files from Brittany Hobson

This report by The Canadian Press was first published March 4, 2025.

Steve Lambert, The Canadian Press