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Crowns, tighter spending reduce Man. deficit

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An extra $215 million from Manitoba's Crown corporations and tighter government spending have reduced the size of the province's budget deficit by $86 million, the province reports.

The reduction would've been higher if the Selinger government this week had not set aside $100 million to help four Interlake First Nations hit by flooding in 2011 to rebuild homes and infrastructure, the province said Thursday in the release of the third-quarter results for the 2013-14 budget year.

Last April, the NDP called for a deficit of $518 million, but because of higher-than-anticipated revenue from the Crown corporations -- a colder winter has boosted Manitoba Hydro's bottom line -- and less government spending, the summary deficit is forecast to decline to $432 million.

Up to Dec. 31, the province has spent $194 million less than budgeted on core government services such as hospitals, schools and child welfare.

"We have seen a real effort in all those departments to manage expenditures, to try to find more efficient ways to provide services," Finance Minister Jennifer Howard said.

Howard said by budget year-end on March 31, she expects to see spending rise above budget in Justice and Family Services as they deal with escalating jail costs and the challenges of looking after the almost 10,000 children in care.

She said overall, the report reflects a government trying to manage its affairs more wisely and on track to balance the books. The NDP has set a target date of 2017 to do that. The new budget will be delivered March 6 when the legislature comes back into session.

Howard said working against the government is $37 million less in federal transfer payments in 2013-14 due to the ongoing squabble with Statistics Canada over its alleged underestimate of Manitoba's population by 18,000 people. Statistics Canada maintains its methodology is sound.

The third-quarter report says the province has not seen the forecast additional revenue from the July 1 one-point increase to the PST, bringing it to eight per cent. Total PST revenue is about $11 million shy of the $1.59 billion forecast.

Howard said that's because total PST revenue from Christmas sales is not included in the report.

Progressive Conservative finance critic Cameron Friesen said part of what's helping government is the sale of the province's property registry to Ontario-based Teranet for a one-time injection of $75 million.

"They are not substantially closer to balancing the books," Friesen said. "It seems to be the progress they're reporting is only based on the performance of government entities like Manitoba Hydro and the sale of Crown assets. That skews the result right there."

Friesen said the NDP is still collecting an additional $400 million a year in tax increases, both in the PST hike and the expansion the year before of what goods and services fall under the PST.

He added the province says infrastructure spending this year will be $1.5 billion, $300 million lower than budgeted.

"Why would a government that says it's all about infrastructure spending be under-spending on infrastructure?" he said. "It means their key rationale for the PST hike is flimsy."

bruce.owen@freepress.mb.ca

Republished from the Winnipeg Free Press print edition February 21, 2014 A7

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