WINNIPEG, Manitoba (Reuters) - The western Canadian province of Manitoba on Tuesday forecast a C$911 million ($695 million) deficit for its 2016-17 budget, its eighth straight shortfall and the first since Brian Pallister’s Progressive Conservatives won last month’s election.
Manitoba, whose economy depends on farming, manufacturing and mining, projected spending at C$16.3 billion and revenue of C$15.2 billion, both up 3 percent. The budget includes a C$150 million cushion for unforeseen expenses.
Finance Minister Cameron Friesen said the government would balance its “principled and practical” budget in eight years, which would run into a second term in office.
“Sweeping austerity measures will not work given the significant demands of our province’s bottom-ranked results in health care, education and poverty reduction,” he said.
Manitoba’s fiscal year began April 1. The right-leaning Progressive Conservatives presented the budget later than usual after ousting Canada’s longest-serving provincial government, Greg Selinger’s New Democrats, in April.
For the 2015-16 fiscal year, which ended March 31, Manitoba ran a deficit of C$1 billion.
Friesen said over time the government will lower taxes and cut spending. Pallister has promised to eventually reduce the sales tax to 7 percent from 8 percent.
Manitoba’s gross domestic product is forecast to grow 2.3 percent in 2016, third-best among provinces, on rising manufacturing shipments and brisk retail sales, according to TD Economics.
The province’s net debt, not including government-owned corporations such as its power company, was an estimated C$21.4 billion on March 31, and is expected to rise to C$23.1 billion a year later.
Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Alan Crosby