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Manitoba reports budget surplus for last year, but predicts COVID deficit this year

Manitoba Premier Brian Pallister speaks during the province's latest COVID-19 update at the Manitoba legislature in Winnipeg Monday, March 30, 2020. The Manitoba government is extending and expanding a wage-subsidy program to spur job creation during the COVID-19 pandemic.THE CANADIAN PRESS/John Woods

WINNIPEG – The Manitoba government registered its first budget surplus in more than a decade in the fiscal year that ended in March, although it is expected to be back in the red this year due to the COVID-19 pandemic.

Final budget figures released Tuesday show the province ended the 2019-20 fiscal year in March with a razor-thin surplus of $5 million on $17.6 billion in total spending. The government had originally predicted a $360-million deficit.

The surplus follows a string of deficits that started under the former NDP government in 2009, which led to credit rating downgrades by two international agencies.

Tuesday’s numbers show income tax revenues came in well above expected levels due to economic growth, and federal transfer payments were slightly higher than forecast.

On the spending side, the government paid out $200 million more than budgeted in health care, but spent $404 million less than expected on infrastructure.

The infrastructure savings were the result of delays in projects such as new health care information technology and a flood outlet on Lake St. Martin, the government said.

The province’s auditor general said the provincial surplus should actually be $43 million. The auditor general and the government have been at odds in recent years over how to account for losses and gains at the Workers’ Compensation Board and agricultural insurance trusts.

The balanced budget marks a milestone for Premier Brian Pallister, whose Progressive Conservative government promised to end annual deficits before the next election, slated for 2023.

The surplus is almost certainly temporary, however. The government has already warned that because of the COVID-19 pandemic, a deficit of $2.9 billion is expected for the current fiscal year. That number could grow if the economy does not rebound as quickly as expected from the pandemic shutdown in the spring, the government said.

This report by The Canadian Press was first published Sept. 29, 2020