Province’s deficit climbs to $1.1 billion

The provincial government’s deficit is projected to be higher than expected due partly to surging costs from this summer’s wildfires.

The province ran a $1.1-billion deficit last fiscal year and is expected to have a net loss of $890 million this year, according to its first-quarter report, which ended in June, Finance Minister Adrien Sala said at a press conference Friday.

The 2024-25 fiscal year finished at the end of March.

“I think Manitobans can see that we’re making the progress that they’re expecting us to make,” Sala told media during a fiscal update at the legislative building in Winnipeg.

The $890-million loss is $96 million more than the province originally projected. The province attributes that primarily to the costs of this year’s busy wildfire season.

The provincial government is currently at $179 million for the cost of the wildfires across the province, with that number “likely to increase” as invoices roll in, Sala said.

“We are expecting that number to go higher, because the wildfire season, unfortunately, does continue to impact us,” Sala said. “We’re sparing no expense in investing in making sure that we take care of Manitobans through this challenging period. That was priority No. 1.”

Last week, Education Minister Tracy Schmidt promised school divisions would be reimbursed for costs taken on while hosting evacuees. It originally told the Brandon School Division there was no guarantee of money coming at all, according to the division’s vice-chair.

The division last week gave a “very rough” estimate of $100,000 for the extra cost of hosting as many as 69 student evacuees.

All students have since withdrawn to return home, according to communications co-ordinator Terri Curtis.

The province didn’t provide an estimated cost for other divisions hosting evacuees in Winnipeg, Thompson and The Pas.

Sala said an updated cost will be given at a future fiscal update and that wildfire costs “will be offset through revenues we’ll be obtaining through the Disaster Financial Assistance program.”

Other losses came from Manitoba Hydro, which posted a $63 million loss for its fiscal year that also ended in March.

A Hydro news release said a significant part of its losses is due to drought. Hydro CEO Allan Danroth said in a press release more energy had to be imported than expected to meet Manitobans’ needs. The $63 million in losses compares to $157 million the previous year.

The Canadian Press reported yesterday that the higher deficit was in part driven by overspending in health care and “anticipated legal liabilities in the Families department” that Sala did not provide details on.

After being asked repeatedly by reporters about how specifically the NDP government intends to reduce its deficit, Sala said it will continue with the same approach it has been taking.

“What Manitobans can expect from us is this continued effective balancing that we’ve been doing, which is showing that we can both be fiscally responsible while we continue to invest, and I think we’re showing that over and over,” he said.

Last year’s deficit was $90 million lower than the third-quarter projection, which “shows the work that we’re doing that we can both find ways of reducing costs, while we continue to invest in the things that matter,” he said.

Sala said the province is reducing the size of the deficit, while also investing in the province.

“The final year-end deficit in public accounts is higher than what we originally forecast when we released Budget 2024,” he said. “We are making headway in reducing the large deficit that was left to us by the PCs,” he said.

The deficits come after the province was earmarked to receive $1.1 billion over 20 years through a landmark settlement with large tobacco companies earlier this year. Sala said the province is only expecting the first five years of money to actually be paid at this point, which counts for only a portion of the total settlement.

The NDP promised to deliver a balanced budget by the scheduled October 2027 general election. Sala reiterated that commitment on Friday.

“We made a firm commitment to deliver a balanced budget in the final year of our mandate, and we’re still committed to doing that.”

The Sun reached out to Opposition Leader Obby Khan for comment, as well as a Brandon University professor in the department of political science, but didn’t hear back by press time from either of them.

The Sun also requested an interview from an economics professor at BU, but multiple professors declined to comment.

» alambert@brandonsun.com