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Under reporting of population could cost Manitoba hundreds of millions

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A fight between the Selinger government and Ottawa over how many people live in Manitoba could cost the province a half billion in federal transfer payments over the next few years and scuttle a pledge to slay the deficit in two years.

"It is a huge challenge for us," Finance Minister Jennifer Howard said Monday after she met with federal Finance Minister Jim Flaherty.

Howard said the root of the dispute is that the province believes Statistics Canada underestimated Manitoba’s population by 18,000 people in the last census in 2011, the year of record flooding in southern Manitoba and the Interlake.

"What’s most unfair about that is we know those people exist. We know from the number of people filing income tax in Manitoba that’s it’s grown at a faster rate than Stats Can says the population is growing. We know because in the census year we had the flood and it would stand to reason you’d miss more people in a flood year."

She said because federal payments to the province are for the most part calculated on a per capita basis, the province will lose $37 million in federal funding the current fiscal year—the budget year ends March 31.

"They’re clawing back money now for the past couple of years, but we have to pay it all this year," Howard said.

Going into the next budget, Howard said the population "underaccounting" will cost the province about $100 million in federal payments.

"That is a big hole in the 2014-15 budget," she said. "With a few months left to put it together we’re going to have to find ways to address it if we can’t get this corrected with Stats Canada."

A year ago Premier Greg Selinger said his government would need until 2016-17 to balance the province’s books. Until then, the government had stuck to a more than two-year-old pledge to balance the books by 2014-15.

Howard said the 2016-17 target to be out of deficit is now at a stake.

"The long and short of it is that they’ve deleted 18,000 Manitobans and we still have to provide health care and education to those people," Howard said. "When you look forward, the numbers that we had been counting on in our medium-term forecast, that shows us in coming into balance in 2016-17, the revenue is going to be at least $100 million down next year.

"It’s reasonable to expect that it would be $100 million down in future years. Over the next five years, that’s half a billion dollars that we’re going to have to find. Getting to balance in 2016-17 is going to be extraordinarily challenging if we don’t have the revenue to do that."

Opposition Progressive Conservative finance critic Cameron Friesen said the NDP’s population miscount excuse is beyond belief.

"No one in Manitoba should have a lot of faith in the power of the NDP government to forecast anything," Friesen said.

Friesen said the NDP is mired in red ink because it can’t rein in its spending—not because of anything Ottawa decides.

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