WINNIPEG — The Selinger government is now projecting a smaller deficit this year than it originally anticipated.
Finance Minister Jennifer Howard said Friday the province is expected to run a $485-million deficit for 2013-14, $33 million less than it predicted in the April budget.
Higher revenues and solid performances at some Crown agencies are behind the improved outlook.
Core government spending is projected to be $41 million higher than budgeted this year, due mainly to increased justice and family services costs.
The improved deficit outlook was contained in the Finance Department’s second-quarter report, released on Friday. It comes despite the fact the province has to return
$37 million in federal transfer payments this fiscal year due to a dispute over the size of the provincial population. The provincial government continues to argue that Ottawa is under-counting the Manitoba population by 18,000 people, a contention that Statistics Canada disputes.
Last year, Manitoba incurred a $580-million deficit. The government has promised to post balanced budgets by the 2016-17 fiscal year.
Retail sales tax revenues for the first six months of the fiscal year — to Sept. 30 — were $50.2 million higher than budgeted. That was mainly due to greater sales, since the July 1 PST hike was factored into the original forecast.
Howard said the public may have responded to sales pitches to buy before the tax hike took effect, although she noted that retail sales have generally been strong in Manitoba.
“That’s been helpful for the economy, but it’s also good on the revenue side,” she said.
Howard said greater program efficiencies are needed in the Justice and Family Services departments, which provide necessary services but chronically spend more than budgeted. However, she was pleased that the Health Department, which accounts for 38 per cent of all government spending, continues to live within its cash allotment.
Meanwhile, Howard has asked Manitoba Liquor and Lotteries to investigate a drop in gaming revenues. Gambling profits were down $17.2 million in the first six months of the operating year, including a slide of $10.8 million from VLTs and $600,000 from casinos. The drop in VLT profits comes despite substantial investments in the machines.
“It just may be that we’re at the point where people’s appetite for gambling is satiated,” Howard said. “If that is happening then we have to adjust our (revenue) projections.”
» Winnipeg Free Press
Republished from the Brandon Sun print edition December 21, 2013