WINNIPEG

Manitoba deficit now forecast to jump from $107M to $567M

By Steve Lambert The Canadian Press
Published Thursday, December 20, 2012 11:40AM CST Last Updated Friday, December 21, 2012 5:06AM CST

The government's second-quarter update says costs are rising in family services, public safety and other areas. (file image)

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WINNIPEG -- The Manitoba government revised its deficit forecast Thursday, adding another $107 million in planned red ink for the fiscal year that ends March 31.

The deficit is now projected to reach $567 million, not the $460 million initially forecast in the spring budget, according to the second-quarter fiscal update released by Finance Minister Stan Struthers.

"The costs are really being driven by family services pressures -- kids in protection issues -- public safety costs ... (and) we had some challenges in terms of forest fires this year," Struthers said.

The report shows the government is set to take in a little more money than expected -- $45 million more, mostly from corporate and individual income taxes. But the extra cash is being dwarfed by $123 million in extra spending, most of it on front-line programs that the NDP says it will not sacrifice.

"Some have suggested that we should be cutting deeply into services in order to balance the budget quickly. We prefer to take a more balanced approach to that."

The government has found $115 million in savings this year by putting off some construction projects, reducing advertising campaigns and taking other measures. It also recently sold off the provincial property registry to a private firm for $75 million.

Opposition Leader Brian Pallister accused the NDP of avoiding making tough choices to rein in spending.

"This government's got a spending problem ... it's got a debt problem. But that's our debt problem and most importantly, it's our children's debt problem."

The NDP is in the midst of a string of annual deficits, and had promised before last year's election to balance the books by 2015. Last week, Premier Greg Selinger announced the target date was being pushed back to 2017. He said the sluggish global economy has made all governments revise their budget plans.

The quarterly report shows Manitoba's export sales decreased by 3.4 per cent in the first 10 months of 2012. Exports to the United States were actually up by 5.1 per cent, but exports to all other countries dropped by 17 per cent.