UPDATE 1-Canadian province of Manitoba sees 7th straight deficit

Thu Apr 30, 2015 4:09pm EDT
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By Rod Nickel

WINNIPEG, Manitoba, April 30 (Reuters) - The western Canadian province of Manitoba forecast on Thursday a C$422 million ($349.80 million) deficit for its 2015-16 budget, its seventh straight shortfall, as the New Democratic government heads for an expected election next year.

To help narrow the deficit, the province raised its capital tax on banks and other lenders to 6 percent from 5 percent, making it the highest such rate among provinces and generating C$25.5 million this fiscal year.

"We've decided the big banks could afford to make a contribution to tax relief in other areas," such as small business taxes, said Finance Minister Greg Dewar.

Manitoba, a flood-prone province whose economy depends on farming, manufacturing and mining, projected spending at C$15.5 billion, up 1.9 percent from 2014-15.

Revenue looks to edge 1.2 percent higher to nearly C$15 billion. The budget includes a C$150 million favorable adjustment expected from an in-year increase in revenue or decrease in spending.

The left-leaning New Democratic Party (NDP) government has been in power since 1999 and is led by Premier Greg Selinger. In March, Selinger narrowly survived a revolt by restless party members, including some cabinet ministers.

The party trails the opposition Progressive Conservatives in polls by a wide margin.   Continued...