At the end of June, the federal government stopped covering some health benefits for some privately-sponsored refugees.
But Manitoba's Health Minister Theresa Oswald said on Wednesday the province will provide the coverage and bill the feds.
Tom Denton at Hospitality House Refugee Ministry says it's a gutsy move.
"Well there is no doubt about that. This will be news right across the country," he said, adding that Manitoba will be a test case for the rest of Canada.
"I think it is a strong political move on the part of the province — it shows up an inherent meanness in the approach that Ottawa has taken.
"They were smart politically to do this."
It's not known how much the coverage will cost the province.
Denton says the province will now be covering benefits for 1,200 to 1,500 refugees in Manitoba.
His organization has filed a lawsuit against Ottawa for breach of contract in failing to pay for the benefits.