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Winnipeg Free Press - PRINT EDITION

Flood bill $632M so far, may rise

By: Larry Kusch

Posted: 08/19/2011 1:00 AM | Comments: 0 (including replies)

THE province is on the hook for at least $154 million in unbudgeted flood costs this year, but Finance Minister Rosann Wowchuk said that shouldn't derail the NDP government's five-year plan to balance the books.

In a report released Thursday, the Finance department said the cost of flood-fighting and compensation programs has climbed to $632 million, but Manitoba expects to recover $478 million of it from Ottawa.

Flood Fight

Flood Fight

The latest news about flooding in southern Manitoba this spring.

The unbudgeted spending includes repairs to damaged infrastructure, disaster financial assistance payments and flood-related support to farmers.

Wowchuk said Thursday she expects the flood bill to grow. "There is still work being done, there are still people being flooded."

The Finance department released its first-quarter report Thursday for the 2011-2012 fiscal year (April 1 to June 30).

The numbers show the government is doing better than initially projected, but the flood bills have yet to come in. Three months into its fiscal year, the province was running a $491-million deficit compared to a first-quarter projection of more than $593 million.

In her April budget, Wowchuk predicted the government would wind up with a $438-million deficit this year. Budget revenues and costs do not flow evenly throughout the year, so it's too early to determine how accurate the initial projections are. The Finance department is expected to revise its annual budget projections in its next quarterly report.

Under the NDP's five-year economic plan introduced last year in response to the global recession, Manitoba will balance its books by 2014-2015. Wowchuk said Thursday she is confident the one-time flood costs incurred this year would not derail that plan.

She said it's too early to assume the $154 million in unplanned flood costs will mean her prediction of a $438-million deficit might have to be revised upwards "That depends. It may not. Our economy is growing steady. There's lots of activity in the province. People are working."

Conservative Leader Hugh McFadyen was skeptical about the department's numbers so close to an election.

"I don't think that anybody believes that these pre-election numbers are a true picture of the province's finances," he said.

larry.kusch@freepress.mb.ca

Finance report highlights

$632 million -- total unbudgeted flood-fighting and flood-compensation costs projected so far.

$154 million -- total unbudgeted flood costs expected to be borne by provincial taxpayers. (This assumes Ottawa will pick up the other $478 million.)

$491 million -- provincial deficit in the first quarter, $103 million better than predicted.

$20 million -- the amount by which revenues exceeded expectations in the first quarter

$83 million -- the amount by which expenses trailed expectations in the first quarter

$438 million -- projected annual deficit on budget day, April 12

Source: 2011/12 quarterly financial report, April to June 2011, Department of Finance

Republished from the Winnipeg Free Press print edition August 19, 2011 A4

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