Introduction

The Summary Budget includes an overview of the financial plan for the Manitoba government reporting entity, which includes the services of the government generally associated with the Legislative Assembly (voted and statutory appropriations and non-voted expenses), government business enterprises (GBEs) (such as Manitoba Hydro and Manitoba Public Insurance), and other reporting entities that are indirectly controlled by the Manitoba government, such as health authorities, post-secondary institutions and school divisions. In the Summary Budget, the voted and statutory appropriations and non-voted expenses are consolidated with the high level projections of other reporting entities and GBEs, according to the standards set by the Public Sector Accounting Board (PSAB). The Summary Budget fully reflects Generally Accepted Accounting Principles (GAAP).

Summary Budget

For the Fiscal Year Ending March 31

Summary Budget Detail

For the Fiscal Year Ending March 31

Summary Budget 2023/24

Revenue

Budget 2023 includes a projected revenue increase of $2,161-million or 11.2 per cent increase from Budget 2022.

Income tax revenue is projected to increase by $574-million from Budget 2022, with a $332-million increase in Individual income tax revenue and a $242-million increase in Corporation income tax revenue. Increase in income tax revenue reflects higher personal and corporate taxable income offset by the fiscal impact of the increase to the basic personal amount in 2023 and the change to the personal income tax bracket thresholds in 2024.

Retail Sales Tax is projected to increase by $192-million reflecting higher consumer spending and higher prices.

Education Property Taxes is projected to decrease by $52-million reflecting the increase to the School Tax Rebate to 50% in 2023.

Other Taxes are projected to decrease overall by $24-million from Budget 2022 reflecting volume decreases in tobacco taxes, fuel taxes and land transfer taxes, offset by increases to corporations taxes and Levy for Health and Education.

Tuition fees are projected to increase $27-million.

Fees and other revenue are projected to decrease by a net of $12-million from Budget 2022 mainly related to the recently announced reduction to the water power rental rates paid by Manitoba Hydro, which is offset by a proportionate increase in Manitoba Hydro’s net income.

Federal transfers are projected to increase $1,049-million, or 16.8 per cent from Budget 2022 reflecting increases in Equalization, the new federal health-care funding proposal and other major transfers and bi-lateral agreements.

Net income of Government Business Enterprises is projected to increase by $347-million mainly reflecting an increase in Manitoba Hydro due to a reduction in water power rental rates and the debt guarantee fee paid to the province and an increase in Manitoba Liquor and Lotteries Corporation revenues through return to full operations. These higher projections are offset by a decline in net revenue from Manitoba Public Insurance due to reductions in basic premium rates.

Sinking funds and other earnings are projected to increase by $60-million compared to Budget 2022 due to an increase in investment earnings offset by a reduction in the guarantee fees paid by Manitoba Hydro.

Expenditure

Expenditures in 2023/24 are projected to increase $1,976-million overall, or 9.9 per cent from Budget 2022.

Significant changes in departmental expenditures include a $469-million or 7.0 per cent increase in Health due to increases in front-line health care provider remuneration and price and volume increases in Pharmacare.

Education and Early Childhood Learning has projected an increase of $113-million largely due to increased operational requirements to strengthen the education system with a focus on literacy, numeracy, student presence and engagement.

Advanced Education and Training has projected an increase of $169-million mainly due to higher personnel expenses and inflationary increases in operational costs at post-secondary institutions.

Families has projected an increase of $221-million as a result of sector wage increases for the Community Living disABILITY Services, Homelessness strategy initiatives, as well as price and volume increases to Employment, Income and Health Supports.

Agriculture has projected a $117-million increase primarily due to higher insurance indemnities and increased contributions to the reserves for the AgriInsurance program after a high claim year in 2021/22.

Consumer Protection and Government Services has projected an increase of $242-million primarily due to higher projected expenditures for cost-shared projects under the Investing in Canada Infrastructure Program (ICIP) being delivered to municipalities.

Enabling Appropriations is projected to increase by $116-million largely due to an increase in funding to advance various initiatives such as the Surgical and Diagnostic Backlog, Health Human Resource Action Plan, Homelessness Strategy and the federal programs under the Low Carbon Economy Fund.

Debt Servicing is projected to increase by $263-million due to higher interest rates.

2022/23 Forecast

Revenue

Overall, revenue is forecast at $1,230-million higher compared to budget for 2022/23. The majority of the increase is comprised of $474-million increase from own source revenue and $549-million increase in net income from government business enterprises.

Individual income tax revenue is $198-million higher than budget, while Corporation income tax revenue is $425-million higher than budget reflecting a total of $623-million increase based on higher than forecast economic growth boosted by stronger labour projections.

Retail Sales Tax is forecast to increase by $139-million over budget while Education Property Taxes are projected to decrease $78-million compared to budget.

Other taxes is forecast to decrease by $71-million compared to budget. The decrease reflects lower revenue projections from lower fuel consumption as well as lower tobacco sales.

Tuition fees are forecast to be $12-million under budget while fees and other revenues are forecast to be $149-million under budget. The decline in fees and other revenues includes the reduction to the water power rental rates paid by Manitoba Hydro, which is offset by a proportionate increase in Hydro net income.

Net changes in Federal transfers includes a $72-million one-time federal payment to the Canada Health Transfer to address the backlog of surgeries and procedures. Other net changes in federal transfers reflect a reduction in the forecast for federal transfers related to the Lake Manitoba and Lake St. Martin outlet channels due to delays in the federal environmental licensing process, which is partially offset by a one-time transfer of $27-million for public transit and school ventilation, which flows through the province to municipalities and school divisions.

Net income of Government Business Enterprises mainly reflects an increase in Manitoba Hydro’s forecast. Due to a combination of above-average water levels at generating stations, an upward forecast attributable to the export spot market prices, as well as a reduction in water power rental rates and the debt guarantee fee paid to the province, Hydro is now forecasting a $531-million improvement over budget. Manitoba Public Insurance is forecasting a lower net income compared to budget largely due to higher project and operating expenses. This is offset by an increase to Manitoba Liquor and Lotteries Corporation’s net income forecast driven by projected strong gaming revenues and higher than expected liquor sales.

Budget 2022 included a $200-million negative revenue contingency as a fiscal planning measure given the uncertain economic situation. This contingency has been removed in this forecast.

Expenditure

Expenditures in 2022/23 are forecast at $1,060-million over budget, which includes over $940-million in additional expenditure authority obtained through Special Warrants.

Health is forecasting an increase of $298-million over budget largely reflecting expenditure pressures in the regional health authorities and price and volume increases in Pharmacare. The variance also includes expenditures related to the implementation of the Health Human Resource Action Plan focused on retaining, training and recruiting health professionals.

Finance is forecasting a variance of $271-million over budget mainly due to the affordability measures that provided relief for families and seniors as well as the recently announced Carbon Tax Relief Fund.

Municipal Relations is forecasting an increase of $211-million over budget mainly due to the $140-million investment in nine municipal water and wastewater projects, $47-million operating grant increase for the 2023 municipal year, and $21-million of federal transit funding that will flow through the province to municipalities.

Consumer Protection and Government Services is forecasting an over expenditure of $115-million, primarily due to the distribution of pandemic related supplies that have been donated by the federal government as well as increased repairs and maintenance costs for older fleet vehicles as a result of vehicle supply chain issues affecting delivery of new units.

Agriculture is forecasting an under expenditure of $94-million largely due to a reduction in anticipated indemnity payments for both the AgriInsurance and Hail Insurance programs.

Economic Development, Investment and Trade is forecasting to be over budget due to a $50-million contribution to the Venture Capital Fund.

Emergency Expenditures is forecasting an increase of $117-million over budget, mainly related to the 2022 spring flood costs and higher than anticipated wildfire suppression expenditures.

Debt Servicing is forecast to be $88-million over budget reflecting the higher interest rates. The Bank of Canada has increased Canada’s target interest rate from 0.25 per cent in March 2022 to 4.50 per cent by January 2023.

Summary Revenue

For the Fiscal Year Ending March 31

Summary Expenditure

For the Fiscal Year Ending March 31

Total Revenue: $21,714

Note: a revenue contingency of $200-million used for
fiscal planning further reduces the projection to $21,514.

Total Expenditure: $21,877

Financial Updates

Summary Net Debt

Summary net debt is an important indicator of a government’s financial position, as this highlights the affordability of future government services. Summary net debt represents the difference between the Government Reporting Entity’s total liabilities, less financial assets; it reflects the residual liability that must be financed by future revenues. It is important to measure changes in net debt against the growth of the economy, as measured by nominal GDP.

In Budget 2023, the net debt to GDP ratio is forecast to be 34.6 per cent. This is a decrease from 35.9 per cent in Budget 2022.

Capital Investment

Capital investment continues to be a priority across government. An investment made to construct or enhance capital assets is a benefit to Manitobans for the provision of services needed into the future. Tangible capital assets are assets with a useful life extending beyond one year, which are acquired, constructed or developed and held for use, not for resale. Net investment in tangible capital assets is projected to be $16.3-billion as at March 31, 2024.

Borrowing Requirements

Manitoba’s borrowing requirements with respect to both general and self-sustaining borrowings are estimated to total $4.7-billion in 2023/24, of which $2.4-billion is required for refinancing purposes. New cash requirements, net of estimated repayments, are $2.3-billion, which includes requirements for general government purposes and capital investments by departments. To date, approximately $1.8-billion of funding for 2023/24 has been pre-borrowed.

Manitoba will also pre-fund approximately $2.1-billion of borrowing requirements for fiscal 2024/25. This will reduce the amount that needs to be borrowed next fiscal year.

Special Accounts

Pension Assets Fund

The trust conditions of the funds held in the Pension Assets Fund are irrevocably restricted for pension purposes only. Net investment earnings of pension assets include the expected rate of return during the year, as well as adjustments to the market-related value. Market fluctuations of pension assets are not recorded in the year in which they occur, but are recognized over the employee average remaining service life.

The fund is expected to have a balance of $5,713-million by the end of the 2023/24 fiscal year.

Fiscal Stabilization Account

The Fiscal Stabilization Account, also known as the rainy day fund, currently has a balance of $585-million. Any draws or deposits for 2022/23 or 2023/24 will be announced closer to year end.

Entities Included in the Summary Budget

Legislative Assembly

Executive Council

Advanced Education and Training

Assiniboine Community College

Brandon University

Manitoba Institute of Trades and Technology

Red River College Polytechnic

Université de Saint-Boniface

University College of the North

University of Manitoba

University of Winnipeg

Agriculture

Manitoba Agricultural Services Corporation

Consumer Protection and Government Services

Entrepreneurship Manitoba

Manitoba Education, Research and Learning Information Networks (MERLIN)

Materials Distribution Agency

The Public Guardian and Trustee of Manitoba

Vehicle and Equipment Management Agency

Economic Development, Investment and Trade

Abandonment Reserve Fund

Communities Economic Development Fund

Economic Development Winnipeg Inc.*

Manitoba Development Corporation

Manitoba Opportunities Fund Ltd.

Manitoba Potash Corporation

Mining Rehabilitation Reserve Fund

Quarry Rehabilitation Reserve Fund

Research Manitoba

Rural Manitoba Economic Development Corporation

Education and Early Childhood Learning

Public School Divisions

Environment and Climate

Efficiency Manitoba Inc.

Manitoba Hazardous Waste Management Corporation

Families

General Child and Family Services Authority

Manitoba Housing and Renewal Corporation

Finance

Insurance Council of Manitoba

Manitoba Financial Services Agency

Pension Assets Fund

Health

CancerCare Manitoba

Not-for-Profit Personal Care Homes and Community Health Agencies

Regional Health Authorities (including controlled organizations)

Interlake-Eastern Regional Health Authority

Northern Regional Health Authority

Prairie Mountain Health

Southern Health-Santé Sud

Winnipeg Regional Health Authority

Rehabilitation Centre for Children, Inc.

Shared Health Inc.

St.Amant Inc.

Indigenous Reconciliation and Northern Relations

Justice

Legal Aid Manitoba

Liquor, Gaming and Cannabis Authority of Manitoba

Manitoba Law Reform Commission

Labour and Immigration

Mental Health and Community Wellness

Municipal Relations

Manitoba Water Services Board

North Portage Development Corporation**

Natural Resources and Northern Development

Public Service Commission

Seniors and Long-Term Care

Sport, Culture and Heritage

Le Centre culturel franco-manitobain

Manitoba Arts Council

Manitoba Centennial Centre Corporation

Manitoba Combative Sports Commission

Manitoba Film and Sound Recording Development Corporation

Sport Manitoba Inc.

Travel Manitoba

Transportation and Infrastructure

Government Business Enterprises

Deposit Guarantee Corporation of Manitoba

Manitoba Hydro-Electric Board

Manitoba Liquor and Lotteries Corporation

Manitoba Public Insurance Corporation

Special Accounts, not attached to a Department

Fiscal Stabilization Account (Rainy Day Fund)

Notes:

* Economic Development Winnipeg Inc. is a government partnership

** North Portage Development Corporation is a government business partnership