Manitoba's deficit skyrockets- Politics

Manitoba's deficit skyrockets By PAUL TURENNE, QMI Agency The Winnipeg Sun

WINNIPEG -- The NDP government is projecting a core budgetary deficit nearly seven times higher than originally expected for this year.

In a second-quarter financial statement released yesterday, Manitoba Finance projects a $602-million deficit in core government spending -- the difference between what the government collects in taxes, fees, transfer payments and other revenue and what it spends on programs, services, and infrastructure in a given year.

The figures are projections for the fiscal year that will end March 31, 2010.

If the actual deficit come March mirrors the $602-million estimate, it will be the largest in Manitoba's history in absolute dollars, although some budgets in the 1980s and early 1990s had core deficits of more than $500 million on budgets half the size.

'Economic downturn'

"We've been saying for some time that we're in an economic downturn around the world and Manitoba is not immune," said Finance Minister Rosann Wowchuk. "But we made a decision that we were not going to reduce services to people during this economic downturn."

When this year's budget was originally introduced last spring, the government had projected a core deficit of $88 million, but yesterday's report shows the government expects to bring in $137 million less than it anticipated and spend $379 million more than it thought.

Much of that increase -- about $150 million -- is due to unanticipated costs related to H1N1 and the spring flood, the report states.

The revenue drop is attributed to corporate income taxes that are expected to bring in about $93 million less than had been anticipated due to struggling export and manufacturing sectors, as well as federal transfer payments for infrastructure projects not expected to come in on time.

Rick Borotsik, the Tory finance critic, suggested the government ought to have seen this coming and planned poorly for it, but did not blame Wowchuk, who only took over the finance portfolio this fall.

"The architect of our fiscal mismanagement is a fellow by the name of Greg Selinger, who was the finance minister for 10 years," Borotsik said.

Despite the deficit, the budget is still projected to be technically balanced, as the NDP government changed the balanced-budget legislation in 2008 to allow the government to balance its budgets on a four-year average.

paul.turenne@sunmedia.ca

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PROJECTIONS SHOW THE PAIN

Family Services, Health, Justice lead over-budget list

Department Over/under budget

Top five over budget

Family Services + $93.4 million

Health + $82.3 million

Justice + $23.1 million

Infrastructure/Transport + $7.4 million

Advanced Education + $1.5 million

Top five under budget