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WINNIPEG, Manitoba (Reuters) - Manitoba may have to dip into its rainy-day fund if the Western Canadian province hopes to post a budget surplus this year, its newly sworn-in premier said on Monday.
Even though the added costs of spring flooding and preparations to combat H1N1 flu will chop into Manitoba's slim surplus projection, the New Democratic Party government still has options to avoid a deficit, Premier Greg Selinger said.
Selinger, a former social worker who had been Manitoba's finance minister for 10 years, was chosen NDP leader on Saturday, becoming the province's 21st premier. He replaces Gary Doer, who stepped down to take over as Canada's ambassador to the United States, effective on Monday.
In March, the Manitoba government projected a thin C$48 million ($46.6 million) surplus in its C$12.68 billion budget for 2009-10. Then came spring flooding and an unbudgeted C$50 million flu preparation bill.
"Manitoba has a very healthy rainy-day fund which will be used as necessary to meet the needs of Manitobans," Selinger told reporters after his swearing-in ceremony, when asked if he could run a deficit.
Manitoba was one of only a few provinces to budget for a surplus this year as the recession took hold.
Asked if he would set debt-reduction targets as premier, Selinger was noncommittal, saying Manitoba already has a "very healthy" debt-to-GDP ratio of 23 percent.
"We're in good shape, but we're also committed to stimulating the economy during a time of recession with capital projects."
Provincial finance officials were unavailable Friday or Monday to give a current estimate of the debt's size.
Manitoba, one of Western Canada's key agriculture provinces, is known for its steady economic growth, unlike the commodity-fueled booms and busts of its western neighbors.
The U.S. ambassador to Canada, David Jacobson, briefly attended Selinger's swearing-in and will meet with the premier on Tuesday.
Selinger said he would raise Manitoba's concerns over U.S. country-of-origin food labeling, which has stalled the flow of Canadian livestock to the United States, as well as Washington's "Buy American" policy in stimulus spending.