Province Of Manitoba 18-K/A Annual report (foreign governments) (amended)

PROVINCE OF MANITOBA

2005/06 QUARTERLY FINANCIAL REPORT
APRIL TO JUNE 2005

NOTES TO THE QUARTERLY FINANCIAL REPORT

This report presents the unaudited financial results of the Province of Manitoba for the first quarter of the 2005/06 fiscal year.

The report is based on the organizational structure of departments established in the 2005/06 Estimates. The comparative data provided for the 2004/05 fiscal year has been restated to reflect the current organizational structure of departments.

FIRST QUARTER – ACTUAL TO ESTIMATE

The first quarter result of a net expenditure (excess expenditures over revenues) of $209.3 million was $53.8 million less than the projection of $263.1 million. The decrease is a combined result of first quarter expenditures being $25.5 million less than estimated and revenue being $28.3 million higher than anticipated. The variances result primarily from differences in the timing of expenditures and receipts.

FIRST QUARTER COMPARED TO PREVIOUS YEAR’S RESULTS

In total the first quarter net expenditure was $50.7 million lower than for the same period last year.

Total revenues were $199.2 million more than the same period last year, reflecting budgeted increases in both own source revenue and transfers from the Government of Canada.

Total expenditures were $148.5 million higher than the previous year. Program expenditures were $136.8 million higher while public debt costs were $11.7 million higher. The largest increases in program expenditures occurred in the departments of Health, Education, Citizenship and Youth and Family Services and Housing.

CAPITAL INVESTMENT

Departmental expenditures for tangible capital assets were $29.3 million, $2.2 million less than estimated primarily due to timing variances. Expenditures were $13.0 million higher than for the same period last year, consistent with budgeted increases for infrastructure assets in 2005/06.

DEBT/PENSION REPAYMENT

The 2005 Budget provides for a $110.0 million contribution to the Debt Retirement Fund. As required by the balanced budget legislation, an allocation committee determines the share of those funds directed to pension or general purpose debt. In the 2005 Budget plan, the 2005/06 allocation is $87.0 million to the pension liability and $23.0 million for general purpose debt.

Page 1 of 12

PROVINCE OF MANITOBA FINANCIAL REPORT APRIL TO JUNE 2005

YEAR END PROJECTION

A $3.0 million positive balance was projected in the 2005 Budget, however the impact of unanticipated emergency expenditure costs resulting from spring flooding and heavy summer rains and other unbudgeted costs is under review. A Special Warrant has been issued to provide for the increased Emergency Expenditures as well as to provide authority for expenditures associated with the Moving Forward on Early Learning and Child Care Agreement, signed by Manitoba and Canada on April 29, 2005, wait list reduction programming and capital funding for universities.

More complete information on revenues and expenditures in the second quarter financial report will provide the basis for a revised year-end projection.

FISCAL STABILIZATION FUND

The fund is projected to have a balance of $493.3 million at the end of the fiscal year. The projected status of the Fiscal Stabilization Fund is provided on page 12.

BORROWING ACTIVITY

The original estimate of borrowing requirements identified in the 2005 Budget was $2,526.2 million including refinancing, funding for Manitoba Hydro, Capital Investments, Health’s capital programs and new self sustaining requirements. This requirement has increased to $2,716.1 million to accommodate refunding of debt for various programs which were called prior to maturity.

For the period April 1, 2005 to June 30, 2005, $105.5 million was raised through the issue of Builder Bonds and $920.2 million was raised in the public market.

NOTE TO READER:

The information presented on the following pages has been changed in format to improve readability. Content remains unchanged from previous years.

Page 2 of 12

PROVINCE OF MANITOBA FINANCIAL REPORT APRIL TO JUNE 2005

OPERATING FUND
STATEMENT OF REVENUE AND EXPENDITURE
FOR THE THREE MONTHS ENDED JUNE 30, 2005

(UNAUDITED)
($000s)

	2005/06			Comparison to 2005/06						Comparison to 2004/05
	ACTUAL			Estimate			Variance			Actual			Variance
Revenue
Own Source Revenue		1,174,295			1,147,339			26,956			1,063,674			110,621
Government of Canada		685,960			684,605			1,355			597,333			88,627
Total Revenue		1,860,255			1,831,944			28,311			1,661,007			199,248
Expenditure
Program Expenditure		1,984,396			2,010,394			(25,998	)		1,847,549			136,847
Debt Servicing		85,130			84,630			500			73,411			11,719
Total Expenditure		2,069,526			2,095,024			(25,498	)		1,920,960			148,566
Net Revenue/(Expenditure)		(209,271	)		(263,080	)		53,809			(259,953	)		50,682
Interfund Transfers
Debt/Pension Repayment		—			—			—			—			—
Fiscal Stabilization Fund		—			—			—			—			—
Total Interfund Transfers		—			—			—			—			—
Balance Under Balanced Budget Legislation		(209,271	)		(263,080	)		53,809			(259,953	)		50,682

Page 3 of 12

PROVINCE OF MANITOBA FINANCIAL REPORT APRIL TO JUNE 2005

OPERATING FUND
STATEMENT OF REVENUE
FOR THE THREE MONTHS ENDED JUNE 30, 2005

(UNAUDITED)
($000s)

	2005/06		Comparison to 2005/06					Comparison to 2004/05
	ACTUAL		Estimate		Variance			Actual		Variance
Taxation:
Finance
- Individual Income Tax		478,476		478,476		—			454,200		24,276
- Corporation Income Tax		87,624		87,624		—			80,748		6,876
- Corporation Capital Tax		45,247		42,600		2,647			38,046		7,201
- Gasoline Tax		24,957		25,000		(43	)		24,730		227
- Insurance Corporations Tax		14,605		15,937		(1,332	)		13,531		1,074
- Land Transfer Tax		7,936		5,749		2,187			4,710		3,226
- Levy for Health and Education		47,302		47,900		(598	)		45,049		2,253
- Mining Tax		19,410		19,410		—			11,600		7,810
- Motive Fuel Tax		11,776		10,800		976			10,905		871
- Retail Sales Tax		190,180		189,500		680			175,249		14,931
- Revenue Act, 1964, Part 1		11,981		11,200		781			11,240		741
- Tobacco Tax		31,441		34,800		(3,359	)		34,977		(3,536	)
- Environmental Protection Tax		534		520		14			538		(4	)
		971,469		969,516		1,953			905,523		65,946
Industry, Economic Development & Mines - - Oil and Natural Gas Tax		825		692		133			485		340
		972,294		970,208		2,086			906,008		66,286
Other Revenue:
Justice		8,721		8,888		(167	)		7,365		1,356
Transportation and Government Services		31,412		26,855		4,557			27,547		3,865
Water Stewardship — Water Power Rentals		31,286		27,928		3,358			20,260		11,026
Manitoba Lotteries Corporation		67,000		67,000		—			56,000		11,000
Manitoba Liquor Control Commission		36,200		23,300		12,900			21,700		14,500
Other Departments		27,382		23,160		4,222			24,794		2,588
		202,001		177,131		24,870			157,666		44,335
Total Own Source Revenue		1,174,295		1,147,339		26,956			1,063,674		110,621

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PROVINCE OF MANITOBA FINANCIAL REPORT APRIL TO JUNE 2005

OPERATING FUND
STATEMENT OF REVENUE
FOR THE THREE MONTHS ENDED JUNE 30, 2005

(UNAUDITED)
($000s)

	2005/06		Comparison to 2005/06					Comparison to 2004/05
	ACTUAL		Estimate		Variance			Actual		Variance
Government of Canada:
Equalization		400,255		400,255		—			343,322		56,933
Canada Health Transfer (CHT)		181,590		181,590		—			123,912		57,678
Canada Social Transfer (CST)		80,028		80,028		—			76,596		3,432
Child Care		—		—		—			—		—
Health Reform Fund		—		—		—			13,746		(13,746	)
Other Health Funds
- Diagnostic Medical Equipment Fund		—		2,000		(2,000	)		1,025		(1,025	)
- Medical Equipment Fund		—		1,000		(1,000	)		1,300		(1,300	)
- Primary Health Care Transition Fund		—		—		—			—		—
- Public Health Immunization Fund		—		—		—			14,618		(14,618	)
Total Other Health Funds		—		3,000		(3,000	)		16,943		(16,943	)
Departments
- Labour Market Development		12,913		12,913		—			12,913		—
- Other Departments		11,174		6,819		4,355			9,901		1,273
Total Government of Canada		685,960		684,605		1,355			597,333		88,627
Total Revenue		1,860,255		1,831,944		28,311			1,661,007		199,248

Page 5 of 12

PROVINCE OF MANITOBA FINANCIAL REPORT APRIL TO JUNE 2005

OPERATING FUND
STATEMENT OF PART A – OPERATING EXPENDITURE
FOR THE THREE MONTHS ENDED JUNE 30, 2005

(UNAUDITED)
($000s)

	2005/06		Comparison to 2005/06					Comparison to 2004/05
	ACTUAL		Estimate		Variance			Actual		Variance
Legislative Assembly		6,736		7,511		(775	)		6,803		(67	)
Executive Council		819		844		(25	)		757		62
Aboriginal and Northern Affairs		8,273		8,765		(492	)		7,430		843
Advanced Education and Training		124,210		127,038		(2,828	)		126,775		(2,565	)
Agriculture, Food and Rural Initiatives		15,723		18,979		(3,256	)		14,630		1,093
Civil Service Commission		1,310		1,376		(66	)		1,179		131
Conservation		27,912		30,065		(2,153	)		27,362		550
Culture, Heritage and Tourism		21,008		22,102		(1,094	)		18,747		2,261
Education, Citizenship and Youth		404,094		415,644		(11,550	)		373,200		30,894
Employee Pensions and Other Costs		14,138		14,878		(740	)		12,764		1,374
Energy, Science and Technology		18,872		15,854		3,018			13,100		5,772
Family Services and Housing		234,785		244,858		(10,073	)		218,954		15,831
Finance — Departmental Costs		36,463		37,437		(974	)		36,428		35
Finance — Debt Servicing Costs		85,130		84,630		500			73,411		11,719
Health		862,884		853,478		9,406			790,333		72,551
Healthy Child Manitoba		5,457		5,954		(497	)		4,602		855
Industry, Economic Development and Mines		4,310		4,657		(347	)		4,671		(361	)
Intergovernmental Affairs and Trade		31,031		33,101		(2,070	)		25,305		5,726
Justice		55,518		56,034		(516	)		53,309		2,209
Labour and Immigration		7,395		7,128		267			7,395		—
Seniors and Healthy Aging Secretariat		202		198		4			192		10
Sport		2,908		2,930		(22	)		2,815		93
Transportation and Government Services		87,000		88,022		(1,022	)		87,578		(578	)
Water Stewardship		10,699		10,687		12			9,831		868
Enabling Appropriations		154		1,002		(848	)		348		(194	)
Other Appropriations		2,495		1,852		643			3,041		(546	)
Total Expenditure		2,069,526		2,095,024		(25,498	)		1,920,960		148,566

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PROVINCE OF MANITOBA FINANCIAL REPORT APRIL TO JUNE 2005

OPERATING FUND
STATEMENT OF PART B – CAPITAL INVESTMENT
FOR THE THREE MONTHS ENDED JUNE 30, 2005

(UNAUDITED)
($000s)

	2005/06		Comparison to 2005/06					Comparison to 2004/05
	ACTUAL		Estimate		Variance			Actual		Variance
General Assets
Legislative Assembly		—		—		—			—		—
Advanced Education and Training		176		260		(84	)		—		176
Agriculture, Food and Rural Initiatives		—		—		—			—		—
Conservation		33		465		(432	)		10		23
Culture, Heritage and Tourism		—		—		—			—		—
Energy, Science and Technology		393		908		(515	)		3,435		(3,042	)
Family Services and Housing		296		222		74			189		107
Finance		32		87		(55	)		13		19
Health		—		550		(550	)		213		(213	)
Justice		245		238		7			190		55
Transportation and Government Services		9,943		9,917		26			2,521		7,422
Enabling Appropriations		—		—		—			563		(563	)
Total General Assets		11,118		12,647		(1,529	)		7,134		3,984
Infrastructure Assets
Conservation		164		845		(681	)		—		164
Transportation and Government Services		11,379		11,671		(292	)		8,502		2,877
Water Stewardship		27		820		(793	)		595		(568	)
Manitoba Floodway Expansion		6,588		5,534		1,054			—		6,588
Enabling Appropriations		—		—		—			—		—
Total Infrastructure Assets		18,158		18,870		(712	)		9,097		9,061
Total Capital Assets		29,276		31,517		(2,241	)		16,231		13,045

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PROVINCE OF MANITOBA FINANCIAL REPORT APRIL TO JUNE 2005

OPERATING FUND

STATEMENT OF VALUATION AND PURPOSE OF
DIRECT AND GUARANTEED DEBT OUTSTANDING
(with comparative figures for March 31, 2005)

(UNAUDITED)
($000s)

	Canadian Dollar		Canadian Dollar		Increase/(Decrease)
	Valuation		Valuation		June 30/05
	(Note 1)		(Note 1)		over
	June 30/05		Mar 31/05		Mar 31/05
Direct Debt Payable in:
Canadian Dollars		14,000,352		14,162,084		(161,732	)
Issues Hedged to Canadian Dollars		3,125,914		2,946,914		179,000
U.S. Dollars		2,332,378		2,056,320		276,058
Issues Hedged to U.S. Dollars		648,284		884,160		(235,876	)
Total Direct Debt		20,106,928		20,049,478		57,450
Guaranteed Debt Payable in:
Canadian Dollars		494,725		660,075		(165,350	)
U.S. Dollars		—		—		—
Total Guaranteed Debt		494,725		660,075		(165,350	)
Total Direct and Guaranteed Debt (note 2)		20,601,653		20,709,553		(107,900	)
Less: Sinking Fund Investments		4,485,506		4,561,149		(75,643	)
Less: Debt Retirement Fund		—		—		—
Net Direct and Guaranteed Debt (note 3)		16,116,147		16,148,404		(32,257	)

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PROVINCE OF MANITOBA FINANCIAL REPORT APRIL TO JUNE 2005

OPERATING FUND

STATEMENT OF VALUATION AND PURPOSE OF
DIRECT AND GUARANTEED DEBT OUTSTANDING
(with comparative figures for March 31, 2005)

(UNAUDITED)

NOTES:

1. The Canadian Dollar Valuation is calculated using the foreign currency exchange rates in effect at June 30, 2005 and at March 31, 2005. As at June 30, 2005, the US dollar exchange rate was $1.2256 ($1.2096 at March 31, 2005).

2.	Direct and Guaranteed Debt are payable in Canadian and U.S. dollars. As at June 30, 2005, total Gross Debt was payable 85% in Canadian dollars and 15% in U.S. dollars. Of this total, General Government Program Debt and Other Debt was 100% payable in Canadian dollars. Manitoba Hydro Debt was payable 59% in Canadian dollars (59% at March 31, 2005) and 41% in U.S. dollars (41% at March 31, 2005).
3.	The above debt was issued for the following purposes:

	June 30, 2005				March 31, 2005
	($000s)		($ per capita)		($000s)		($ per capita)
			(Note 4)				(Note 4)
General Government Programs		6,516,300		5,529		6,594,139		5,607
The Manitoba Hydro-Electric Board		6,672,794		5,662		6,615,015		5,625
Capital Investments		375,648		319		363,519		309
Manitoba Hospital Facilities		660,761		561		738,761		628
Government Enterprises and Other		496,514		421		496,514		422
Other		1,394,130		1,183		1,340,456		1,140
Total		16,116,147		13,675		16,148,404		13,731
		(Note 5)

4. Per Capita data is based upon population figures as at July 1, 2005 and April 1, 2005 as reported by Statistics Canada.

5. In 2003/04, the Province, in accordance with Canadian GAAP, changed its accounting treatment for certain amounts owed to Canada and for debentures issued by certain school boards and hospitals, the debt service of which is paid with future grants from the Government. Amounts owed to the Federal Government over time, which were previously treated as accounts payable are now accounted for as loans payable. Debentures issued by school boards and hospitals, were previously recognized as an expense over the life of the debentures as grants for debt service were made and held by the Provincial Sinking Fund and Manitoba Public Insurance (MPI), (a Crown corporation). Now the obligation to fund dept principal payments is expensed in full at the time the debenture is issued. Any of these debentures held by MPI are recorded as “Loans Payable to Government Enterprises”. The Government also recognized a loan payable in respect of the pension liability of the Manitoba Liquor Control Commission.

6. General Government Program Debt decreased by $(77.8) million due to maturities not yet funded. All other debt increased $45.6 million due to the Provincial Part B Capital requirements, Manitoba Hydro’s new capital requirements, offset by a net increase in Manitoba Hydro’s sinking fund together with the impact of a weaker Canadian dollar. Hospital facilities debt decreased due to maturities not yet funded and other debt increased due to sinking fund maturities prior to debt maturities. Manitoba Hydro’s U.S. dollar revenues are sufficient to pay the interest and principal on all outstanding U.S. dollar debt.

7. Manitoba’s net general purpose debt to GDP ratio is projected to be 15.7% in 2005/06, down from 16.4% in 2004/05 and from 20.8% in 1999/2000. GDP data reflects the latest information available from the Manitoba Bureau of Statistics.

Page 9 of 12

PROVINCE OF MANITOBA FINANCIAL REPORT APRIL TO JUNE 2005

DEBT RETIREMENT FUND

PROJECTION FOR YEAR ENDING MARCH 31, 2006
(with comparative figures for March 31, 2005)

(UNAUDITED)
($000s)

	2005/06			2004/05
	Projection(1)			Actual(2)
Fund Balance, Beginning of Year		—			180,325
Revenue:
Interest Earnings		—			1,861
Transfer from Operating Fund		110,000			98,500
		110,000			100,361
Expenditure:
Transfer to Operating Fund for:
- Pension Assets Fund (3)		(87,000	)		(78,712	)
- Sinking Fund Obligation (4)		—			(201,974	)
		(87,000	)		(280,686	)
Fund Balance, End of Year		23,000			—

Notes:

(1)	Based on projection included in the 2005 Budget.
(2)	Based on 2004/05 Public Accounts.
(3)	The actual allocation of funds for 2005/06 will be determined by the Allocation Committee as per Balanced Budget, Debt Repayment and Taxpayer Accountability Act.
(4)	Based on debt retirement provision of the Act that at least once every five years, the Fund be collapsed and all amounts allocated to the Sinking Fund or Pension Assets Fund.

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PROVINCE OF MANITOBA FINANCIAL REPORT APRIL TO JUNE 2005

PENSION ASSETS FUND
PROJECTION FOR YEAR ENDING MARCH 31, 2006
(with comparative figures for March 31, 2005)

(UNAUDITED)
($000s)

	2005/06		2004/05
	Projection (1)		Actual (2)
Fund Balance, Beginning of Year		382,342		267,157
Revenue:
Interest Earnings		38,000		30,602
Transfer from Debt Retirement Fund (2)		87,000		78,712
Transfer from Departments and Crown Corporations		7,500		5,871
		132,500		115,185
Fund Balance, End of Year		514,842		382,342

Notes:

(1)	Based on projection included in the 2005 Budget.
(2)	The actual allocation of funds for 2005/06 will be determined by the Allocation Committee as per the Balanced Budget, Debt Repayment and Taxpayer Accountability Act.

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PROVINCE OF MANITOBA FINANCIAL REPORT APRIL TO JUNE 2005

FISCAL STABILIZATIONION FUND
PROJECTION FOR YEAR ENDING MARCH 31, 2006
(with comparative figures for March 31, 2005)

(UNAUDITED)
($000s)

	2005/06			2004/05
	Projection			Actual (1)
Fund Balance, Beginning of Year		485,942	*		78,881
Revenue
Interest Earnings		13,730			1,571
Interfund Transfers
Transfer from / (to) the Operating Fund
- Year-End Positive Balance (2)		3,000			195,423
- Wait Time Reduction Programming		(9,400	)		155,115
- Other Health Related Programming		—			54,952
		(6,400	)		405,490
Fund Balance, End of Year		493,272			485,942

Notes:

(1)	Based on 2004/05 Public Accounts.
(2)	Based on projection included in the 2005 Budget.

* Fund balance comprised of:
- Health related programs prefunded by Canada	210,067
- Other general program requirements	275,875
	485,942

Page 12 of 12