Manitoba deficit expected to shrink by $346M, to less than half of spring projection

A new forecast suggests the Manitoba budget shortfall will improve by $346 million by the end of the current fiscal year.

In its first-quarter financial report, released on Thursday, the provincial government projects a deficit of $202 million by March 2023.

That’s down from the $548 million forecast in the budget back in spring.

The province largely attributes the rosier forecast to a significant increase in projected year-end Manitoba Hydro revenues, from $120 million at the time of the spring budget to a new forecast of $585 million.

High water levels have permitted the Crown corporation to export more energy to other jurisdictions.

The financial books have also been improved by a one-time federal transfer increase of $72 million to address the surgical backlog, and continued growth in tax revenue.

The gains are offset by an extra $191 million in expenses, mainly the result of higher health-care spending and inflationary support for seniors and families with children, the province said.

While finance officials say the economic indicators have been encouraging, the province is bracing for a slowdown resulting from several factors, including inflationary pressures, rising interest rates and continued supply chain disruptions.

It projects that Manitoba’s real GDP will grow by 1.9 per cent in 2023, compared to 4.1 per cent growth in 2022.

Officials said they’ve accounted for those economic challenges in the first-quarter forecast.

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