Winnipeg Free Press - PRINT EDITION

Last year's deficit just shy of $1B, province reports

'Unprecedented' flood's price tag reaches $975M

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The province closed the books Friday on a year its finance minister would rather forget.

The final tally on last year's record deficit is now pegged at $999 million, which is a $121-million improvement over what was feared in third-quarter projections.

Finance Minister Stan Struthers said the difference was due to a "more accurate reflection" of the cost of the 2011 flood. However, the flood tally continued to be the biggest contributor to what grew to be a sea of red ink. It came in at a whopping $975 million.

"The flood was unprecedented, with an unprecedented price tag," Struthers said.

The $999 million shortfall was more than double the $438 million deficit the province originally predicted. The year before, the government ended the year $179 million in the red.

In April, Struthers projected a deficit of $460 million for the current fiscal year. On Monday, he will report on how the province did in its first quarter (April 1 to June 30).

At the same time, Struthers will report on the government's progress in reducing program spending. A target of $128 million in cuts was set this spring.

The minister said Friday the government is more than halfway to that goal.

"We've undertaken a review of our expenditures and we're moving along very well with that," he said, while vowing basic services such as health, education and programs affecting kids will not be targeted.

Acting Progressive Conservative finance critic Reg Helwer said the year-end results prove the NDP is running the province into the ground.

"Obviously, they have no concept of what management means or how to go about it," Helwer said. "A billion dollars added to Manitoba's debt is just unforgivable for Manitobans."

Helwer said despite higher revenue from taxes and fees and high transfer payments in 2011-12, the NDP is no closer to reducing its debt.

He also said he takes no stock in Struthers' claim the government is halfway through identifying $128 million in savings in the current budget.

"Can we depend on that?" he said. "We haven't been able to depend on anything they've said so far other than they're going to miss their targets."

The final spending and revenue numbers were audited by provincial auditor general Carol Bellringer.

The Finance Department's final reporting on the 2011-12 fiscal year consisted of three volumes packed with numbers, including a record of salaries, benefits and other compensation exceeding $50,000 paid to individuals.

Of note were the benefits paid to a pair of high-ranking officials who parted ways with the government last year.

Dr. Joel Kettner, the province's former chief public health officer, was paid $702,789 last year compared with $385,058 the year before. Kettner was let go this past January, despite having two years remaining on his contract.

Meanwhile, the premier's former chief of staff, Michael Balagus, who left his position during the year, earned $346,869 in 2011-12, up considerably from the $159,872 he pulled in the previous year, suggesting he received a six-figure severance package.

larry.kusch@freepress.mb.ca bruce.owen@freepress.mb.ca

Republished from the Winnipeg Free Press print edition September 29, 2012 A13

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