Winnipeg, MB – March 26, 2026 – The Canadian Federation of Independent Business (CFIB) is calling on the Manitoba government to urgently expand its new Provincial Sales Tax (PST) exemption on grocery items to include small retailers and restaurants, warning the current design creates an unfair two-tier system that disadvantages local businesses.
CFIB has formally written to Finance Minister Adrien Sala urging the province to make changes to the policy before it takes effect, saying the current approach means many small businesses will be forced to continue charging PST on the same or similar food items that will be tax-free at larger grocery stores.
“This is not just a technical gap in policy, it is a fundamental fairness issue,” said Tyler Slobogian, Senior Policy Analyst for Prairies & Northern Canada at CFIB. “By limiting the exemption to larger grocery stores, the government is effectively picking winners and losers in the food sector. Small retailers and restaurants are being put at a clear and avoidable disadvantage.”
Under the current design, small independent grocers, convenience stores, and restaurants will remain subject to charging the PST on food and prepared items, while identical products sold at larger grocery stores (greater than 280 square meters in size) will be exempt. CFIB says this will distort consumer behaviour and shift sales away from small local businesses that are already operating under significant cost pressures.
“There is nothing fair about a system where a rotisserie chicken is tax-free in one store but taxed in another, or taxed at a restaurant,” Slobogian added. “Customers will naturally follow the tax advantage, and it will be small, community-based businesses and their employees that lose out.”
Recent data from CFIB’s October 2025 Your Voice Survey shows that 70% of Manitoba small business owners do not believe the provincial government has a plan to support them. Policies like this reinforce that perception.
“This policy reinforces the belief that small businesses are an afterthought in provincial decision-making rather than partners in the economy.”
CFIB has urged the Manitoba government to take immediate corrective action by:
- Extending the PST exemption to all retailers and food establishments selling eligible food items, regardless of size or format;
- Eliminating the PST on restaurant meals (dine-in and takeout) to ensure fair and consistent treatment across the food sector; and
- Ensuring affordability measures do not come at the expense of small, community-based businesses.
For media enquiries or interviews, please contact:
Tyler Slobogian, CFIB
204-979-1787
Tyler.Slobogian@cfib.ca
About CFIB
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 103,000 members across every industry and region. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.
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