Hey there, time traveller!
This article was published 20/12/2012 (1346 days ago), so information in it may no longer be current.
The Selinger government is now projected to run a deficit of $567 million in the current fiscal year, up from $460 million projected in April.
The sobering news came as Finance Minister Stan Struthers released his department’s Quarterly Financial Report today.
A higher-than-projected deficit for 2012-2013 was anticipated after the government last week postponed the target date for balancing the province’s books to 2016-2017 from the once-promised 2014-2015.
Last year, the government posted a record $999-million deficit, due in large part to flood fighting and recovery costs.
Manitoba is falling deeper into debt despite the fact that revenues this year are higher than expected. Government spending, though, is exceeding budget at an even faster clip.
Core government spending is projected to be higher than budget because of "significant pressures" in the areas of law enforcement ($38 million higher than expected), disability programs ($28 million), child protection ($24 million) and forest fire fighting ($10 million), the Finance Department said in its report.
In the first six months of the fiscal year, the government took in $107 million more in income tax revenue than it first projected. Corporate income tax revenues were also higher than anticipated, although revenue from fees and other taxes were down.
Health spending was $30 million higher than budgeted over the first six months of the fiscal year, while education spending was down $15 million.
"Manitoba’s economic growth continues to progress at a stable pace as the economy continues to recover from the global recession," the Finance Department said.
"Over the last five years, the economy has expanded on average by 1.9 per cent annually, above the Canadian average rate of 1.2 per cent."
Progressive Conservative Party Leader Brian Pallister said he is concerned by the fact that the NDP government is now projected to exceed budgeted spending for a 13th consecutive year.
"Let’s understand, this is happening at a time when interest rates have not yet risen. Yet no one is predicting they will drop. So what happens to government expenditures when interest rates rise?" he said.
"This government’s got a spending problem," Pallister said, adding he fears further tax hikes down the road to pay for that increased spending.
Struthers defended the province’s fiscal performance, saying the government has identified $115 million in spending cuts this fiscal year and recovered an additional $75 million from asset sales.
He also noted that spending in 15 of 18 government departments are currently under budget.
"I would wonder what services Mr. Pallister is suggesting we should cut," Struthers said in an interview.