WINNIPEG — Manitoba's deficit has come in much lower than expected, thanks to a rebounding economy and higher-than-expected federal transfer payments.
New figures from the province show the deficit for the fiscal year that ended in March came in at $704 million — less than half the $1.6 billion originally predicted in the budget.
The Finance Department says the economy grew last year by more than nine per cent as COVID-19 restrictions were lifted. That drove up income tax revenues from individuals and businesses.
Federal transfer payments were up, including a special one-time $145-million transfer to address surgical backlogs and other health issues.
On the downside, last year's drought saw production in several Manitoba crops drop sharply. It also turned an expected profit at Manitoba Hydro into a $248-million loss.
Manitoba has been running deficits since 2009, with the exception of a $5-million surplus the year before the pandemic started.
The governing Progressive Conservatives have promised to balance the budget by 2028, and another set of figures released Thursday suggest they are heading in that direction.
The first-quarter fiscal update estimates the deficit for the current fiscal year will be $202 million — less than half the $548 million predicted in the budget in April.
The Finance Department says the improvement is partly based on wet weather, which has allowed Crown-owned Manitoba Hydro to export more electricity. A continued economic rebound and strong federal transfer payments are also factors.
The ongoing red ink is forecast to increase Manitoba's net debt to $29.5 billion.
This report by The Canadian Press was first published Sept. 29, 2022.
The Canadian Press