News Canada

Flood fight results in bigger deficit

BY JAMES TURNER, WINNIPEG SUN

FIRST POSTED: THURSDAY, DECEMBER 15, 2011 08:49 AM CST | UPDATED: THURSDAY, DECEMBER 15, 2011 06:34 PM CST

The rising tide of flood-fighting costs will result in a larger-than-forecast provincial deficit for 2011, but Premier Greg Selinger says a plan to slay the deficit by 2014 remains his goal.

Currently, the cost of the flood sits at $841 million and will only go up, Selinger told more than 1,000 business and community leaders in his annual State of the Province address at the Winnipeg Convention Centre on Thursday.

"It does pose a very significant challenge to the province," he said. "It has affected our bottom line. It will raise the deficit this year."

This year's summary-budget deficit was previously pegged to be $438 million.

The bill might have been worse if the province hadn't acted as quickly as it did on flood-mitigation efforts, Selinger noted.

The federal government will cover a portion of disaster financial assistance and other costs, but just how much they'll contribute remains to be seen. To date, the province has received a $50 million advance from Ottawa.

"Nobody should be surprised it will be larger given the extent of the flood this year. Significantly larger," Selinger told reporters following his address.

He said his NDP government won't back off a long-term plan to return to balanced books by 2014.

Selinger wouldn't forecast cuts to government services as a result of the growing deficit.

"Every budget is a challenge and always has been," he said. "We're going to keep the focus on allowing Manitoba to grow the economy."

Without answers from the federal government as to flood funding, it's difficult for the government to make concrete financial plans, said Dave Angus, president and CEO of the Winnipeg Chamber of Commerce.

"We're sitting here not really knowing what the federal government contribution will be," he said.

"How do you do long-term fiscal planning when you really aren't sure completely what that amount is going to be?"

The flood costs marked the only overtly gloomy note of Selinger's 25-minute speech, which saw him laud Manitoba's place as a hot spot for immigration and efforts to revitalize downtown Winnipeg through housing projects partially-financed by tax programs.

Selinger also spoke briefly of fostering a municipal infrastructure strategy with the federal and local municipal governments, but didn't elaborate on what that might look like.


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