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

EXHIBIT 99.2

PROVINCE OF MANITOBA

2006/07 QUARTERLY FINANCIAL REPORT
APRIL TO JUNE 2006

NOTES TO THE QUARTERLY FINANCIAL REPORT

This report presents the unaudited financial results of the Province of Manitoba for the first quarter of the 2006/07 fiscal year.

The report is based on the organizational structure of departments established in the 2006/07 Estimates. The comparative data provided for the 2005/06 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 expenditure over revenue) of $201.0 million was $50.1 million less than the projection of $251.1 million. The decrease is a combined result of first quarter expenditures being $22.6 million less than estimated and revenue being $27.5 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 $8.2 million lower than for the same period last year.

Total revenues were $66.3 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 $58.1 million higher than the previous year. Program expenditures were $64.4 million higher while public debt costs were $6.3 million lower. The largest increases in program expenditures occurred in the departments of Health, Education, Citizenship and Youth and Family Services and Housing.

CAPITAL INVESTMENT

Overall, expenditures for tangible capital assets were $30.7 million, $10.9 million less than estimated at the end of the first quarter primarily due to timing variances related to the Manitoba Floodway Expansion. Total expenditures related to tangible capital assets were $1.5 million higher than the same period last year.

DEBT/PENSION REPAYMENT

The 2006 Budget provides for a $110.5 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 2006 Budget plan, the 2006/07 allocation is $85.5 million to the pension liability and $25.0 million for general purpose debt.

Page 1 of 12

PROVINCE OF MANITOBA FINANCIAL REPORT APRIL TO JUNE 2006

YEAR END PROJECTION

A $3.3 million positive balance was projected in the 2006 Budget. Unanticipated emergency expenditure costs resulting from forest fire suppression, 2006 spring flooding and 2005 flood remediation work has resulted in the need for increased expenditure authority. A Special Warrant has been issued to provide for these expenditures.

Information on revenues and expenditures will be provided in the second quarter financial report, including an update on revenue from Canada related to Bill C-48 and a revised year-end projection.

FISCAL STABILIZATION FUND

The fund is projected to have a balance of $467.1 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 2006 Budget was $2,762.0 million including refinancing, funding for Manitoba Hydro, capital investments, Health’s capital programs and new self sustaining requirements.

For the period April 1, 2006 to June 30, 2006, $115.7 million was raised through the issue of Manitoba Hydro Savings Bonds and $456.3 million was raised in the public market.

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PROVINCE OF MANITOBA FINANCIAL REPORT APRIL TO JUNE 2006

OPERATING FUND

STATEMENT OF REVENUE AND EXPENDITURE
FOR THE THREE MONTHS ENDED JUNE 30, 2006

(UNAUDITED)
($000s)

	2006/07			Comparison to 2006/07						Comparison to 2005/06
	ACTUAL			Estimate			Variance			Actual			Variance
Revenue
Own Source Revenue		1,210,535			1,189,505			21,030			1,174,295			36,240
Government of Canada		715,993			709,554			6,439			685,960			30,033
Total Revenue		1,926,528			1,899,059			27,469			1,860,255			66,273
Expenditure
Program Expenditure		2,048,738			2,070,437			(21,699	)		1,984,396			64,342
Debt Servicing		78,842			79,753			(911	)		85,130			(6,288	)
Total Expenditure		2,127,580			2,150,190			(22,610	)		2,069,526			58,054
Net Revenue/(Expenditure)		(201,052	)		(251,131	)		50,079			(209,271	)		8,219
Interfund Transfers
Debt/Pension Repayment		—			—			—			—			—
Fiscal Stabilization Fund		—			—			—			—			—
Total Interfund Transfers		—			—			—			—			—
Net Revenue/(Expenditure) After Interfund Transfers		(201,052	)		(251,131	)		50,079			(209,271	)		8,219

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PROVINCE OF MANITOBA FINANCIAL REPORT APRIL TO JUNE 2006

OPERATING FUND
STATEMENT OF REVENUE

FOR THE THREE MONTHS ENDED JUNE 30, 2006

(UNAUDITED)
($000s)

	2006/07		Comparison to 2006/07					Comparison to 2005/06
	ACTUAL		Estimate		Variance			Actual		Variance
Taxation:
Finance
- Individual Income Tax		501,864		501,864		—			478,476		23,388
- Corporation Income Tax		95,922		95,922		—			87,624		8,298
- Corporation Capital Tax		40,059		40,300		(241	)		45,247		(5,188	)
- Gasoline Tax		24,808		25,200		(392	)		24,957		(149	)
- Insurance Corporations Tax		14,897		15,037		(140	)		14,605		292
- Land Transfer Tax		8,740		7,264		1,476			7,936		804
- Levy for Health and Education		48,684		49,400		(716	)		47,302		1,382
- Mining Tax		16,379		16,710		(331	)		19,410		(3,031	)
- Motive Fuel Tax		12,333		11,190		1,143			11,776		557
- Retail Sales Tax		199,345		197,690		1,655			190,180		9,165
- Revenue Act, 1964, Part 1		11,722		12,200		(478	)		11,981		(259	)
- Tobacco Tax		34,296		31,300		2,996			31,441		2,855
- Environmental Protection Tax		556		520		36			534		22
		1,009,605		1,004,597		5,008			971,469		38,136
Industry, Economic Development & Mines
- Oil and Natural Gas Tax		3,336		1,722		1,614			825		2,511
		1,012,941		1,006,319		6,622			972,294		40,647
Other Revenue:
Justice		8,763		9,353		(590	)		8,721		42
Transportation and Government Services		33,231		31,171		2,060			31,412		1,819
Water Stewardship — Water Power Rentals		31,498		24,978		6,520			31,286		212
Manitoba Lotteries Corporation		66,000		66,000		—			67,000		(1,000	)
Manitoba Liquor Control Commission		29,700		26,700		3,000			36,200		(6,500	)
Other Sources		28,402		24,984		3,418			27,382		1,020
		197,594		183,186		14,408			202,001		(4,407	)
Total Own Source Revenue		1,210,535		1,189,505		21,030			1,174,295		36,240

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PROVINCE OF MANITOBA FINANCIAL REPORT APRIL TO JUNE 2006

OPERATING FUND

STATEMENT OF REVENUE
FOR THE THREE MONTHS ENDED JUNE 30, 2006

(UNAUDITED)
($000s)

	2006/07		Comparison to 2006/07				Comparison to 2005/06
	ACTUAL		Estimate		Variance		Actual		Variance
Government of Canada:
Equalization		414,264		414,264		—		400,255		14,009
Bill C-48		—		—		—		—		—
Canada Health Transfer (CHT)		192,512		192,512		—		181,590		10,922
Canada Social Transfer (CST)		83,030		83,030		—		80,028		3,002
Child Care		—		—		—		—		—
Health Funds		1,941		—		1,941		—		1,941
Departments
- - Labour Market Agreements		21,878		17,420		4,458		21,878		—
- Other Agreements		2,368		2,328		40		2,209		159
Total Government of Canada		715,993		709,554		6,439		685,960		30,033
Total Revenue		1,926,528		1,899,059		27,469		1,860,255		66,273

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PROVINCE OF MANITOBA FINANCIAL REPORT APRIL TO JUNE 2006

OPERATING FUND

STATEMENT OF PART A — OPERATING EXPENDITURE
FOR THE THREE MONTHS ENDED JUNE 30, 2006

(UNAUDITED)
($000s)

	2006/07		Comparison to 2006/07					Comparison to 2005/06
	ACTUAL		Estimate		Variance			Actual		Variance
Legislative Assembly		6,555		6,709		(154	)		6,736		(181	)
Executive Council		813		767		46			819		(6	)
Aboriginal and Northern Affairs		13,797		13,893		(96	)		8,839		4,958
Advanced Education and Training		125,568		123,915		1,653			124,679		889
Agriculture, Food and Rural Initiatives		18,992		14,621		4,371			15,747		3,245
Civil Service Commission		1,124		1,161		(37	)		1,310		(186	)
Conservation		28,150		28,892		(742	)		27,655		495
Culture, Heritage and Tourism		23,909		25,027		(1,118	)		21,008		2,901
Education, Citizenship and Youth		420,064		388,294		31,770			403,139		16,925
Employee Pensions and Other Costs		15,671		16,250		(579	)		14,138		1,533
Energy, Science and Technology		15,068		20,197		(5,129	)		19,302		(4,234	)
Family Services and Housing		241,842		249,489		(7,647	)		234,817		7,025
Finance — Departmental Costs		35,596		35,719		(123	)		36,222		(626	)
Finance — Debt Servicing Costs		78,842		79,753		(911	)		85,130		(6,288	)
Health		888,904		936,633		(47,729	)		862,729		26,175
Healthy Child Manitoba		5,748		5,679		69			5,502		246
Industry, Economic Development and Mines		4,818		4,046		772			4,335		483
Intergovernmental Affairs and Trade		29,527		30,764		(1,237	)		31,044		(1,517	)
Justice		53,173		53,765		(592	)		55,532		(2,359	)
Labour and Immigration		6,944		6,973		(29	)		7,380		(436	)
Seniors and Healthy Aging Secretariat		184		266		(82	)		202		(18	)
Sport		2,918		2,920		(2	)		2,908		10
Transportation and Government Services		90,505		87,417		3,088			87,000		3,505
Water Stewardship		15,393		13,997		1,396			10,704		4,689
Enabling Appropriations		412		1,175		(763	)		154		258
Other Appropriations		3,063		1,868		1,195			2,495		568
Total Expenditure		2,127,580		2,150,190		(22,610	)		2,069,526		58,054

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PROVINCE OF MANITOBA FINANCIAL REPORT APRIL TO JUNE 2006

OPERATING FUND

STATEMENT OF PART B — CAPITAL INVESTMENT

FOR THE THREE MONTHS ENDED JUNE 30, 2006

(UNAUDITED)
($000s)

	2006/07		Comparison to 2006/07					Comparison to 2005/06
	ACTUAL		Estimate		Variance			Actual		Variance
General Assets
Legislative Assembly		6		—		6			—		6
Advanced Education and Training		—		—		—			176		(176	)
Agriculture, Food and Rural Initiatives		—		—		—			—		—
Conservation		358		258		100			33		325
Culture, Heritage and Tourism		—		—		—			—		—
Education, Citizenship and Youth		—		—		—			—		—
Energy, Science and Technology		684		1,297		(613	)		393		291
Family Services and Housing		166		234		(68	)		296		(130	)
Finance		—		715		(715	)		32		(32	)
Health		37		—		37			—		37
Justice		1		157		(156	)		245		(244	)
Transportation and Government Services		3,435		5,174		(1,739	)		9,943		(6,508	)
Water Stewardship		—		20		(20	)		—		—
Enabling Appropriations		—		—		—			—		—
Total General Assets		4,687		7,855		(3,168	)		11,118		(6,431	)
Infrastructure Assets
Conservation		325		1,980		(1,655	)		164		161
Transportation and Government Services		13,367		11,336		2,031			11,379		1,988
Water Stewardship		93		428		(335	)		27		66
Manitoba Floodway Expansion		12,264		19,998		(7,734	)		6,588		5,676
Enabling Appropriations		—		—		—			—		—
Total Infrastructure Assets		26,049		33,742		(7,693	)		18,158		7,891
Total Capital Assets		30,736		41,597		(10,861	)		29,276		1,460

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PROVINCE OF MANITOBA FINANCIAL REPORT APRIL TO JUNE 2006

OPERATING FUND

STATEMENT OF PROVINCIAL BORROWINGS, GUARANTEES AND OBLIGATIONS

June 30, 2006

(with comparative figures for March 31, 2006)

(UNAUDITED)
($000s)

	Canadian			Canadian			Increase
	Dollar			Dollar			(Decrease)
	Valuation			Valuation			June 30, 2006
	(Note 1)			(Note 1)			over
	June 30, 2006			March 31, 2006			March 31, 2006
Provincial Borrowings Payable in:
Canadian Dollars		13,607,988			13,710,863			(102,875	)
Issues Hedged to Canadian Dollars		2,769,100			2,834,264			(65,164	)
U.S. Dollars		2,121,901			2,221,050			(99,149	)
Issues Hedged to U.S. Dollars		589,781			617,340			(27,559	)
Subtotal Provincial Borrowings		19,088,770			19,383,517			(294,747	)
Guarantees and Obligations Payable in:
Canadian Dollars		1,270,328			1,229,575			40,753
U.S. Dollars		—			—			—
Subtotal Guarantees and Obligations		1,270,328			1,229,575			40,753
(Note 2)
Subtotal Provincial Borrowings, Guarantees and Obligations (Note 3)		20,359,098			20,613,092			(253,994	)
Less: Sinking Fund Investments		(4,397,728	)		(4,475,996	)		78,268
Less: Debt Retirement Fund		(25,002	)		(25,000	)		(2	)
Total Provincial Borrowings, Guarantees and and Obligations Outstanding (Note 4)		15,936,368			16,112,096			(175,728	)

Note to Reader:

Outstanding provincial borrowings will fluctuate during the fiscal year as a result of the timing of borrowing activities of the Province. While current accounting standards identify Net Debt as the best presentation of a government’s financial position, certain valuations used in the calculation of Net Debt are not available on a quarterly basis. Net Debt is defined as total liabilities less the financial assets available to repay those liabilities. The Public Accounts for the year ended March 31, 2006 reflected Net Debt of the operating fund to be $8.3 billion (see Public Accounts, Volume 1, page 105) and for the government reporting entity to be $10.5 billion (See Public Accounts, Volume 1, page 55).

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PROVINCE OF MANITOBA FINANCIAL REPORT APRIL TO JUNE 2006

OPERATING FUND

STATEMENT OF PROVINCIAL BORROWINGS, GUARANTEES AND OBLIGATIONS

June 30, 2006

(with comparative figures for March 31, 2006)

     NOTES:

1.	The Canadian Dollar Valuation is calculated using the foreign currency exchange rates in effect at June 30, 2006 and at March 31, 2006. As at June 30, 2006, the U.S. dollar exchange rate was $1.1150 ($1.1671 at March 31, 2006).
2.	Includes borrowings of Manitoba Hydro which has been guaranteed by the Province, Government Enterprises and Other payables and third party debt of health care facilities.
3.	Provincial Borrowings and Guarantees are payable in Canadian and U.S. dollars. As at March 31, 2006, total provincial borrowings and guarantees were payable 87% in Canadian dollars and 13% in U.S. dollars. Of this total, General Government Program borrowing and Other Crown organizations borrowings was 100% payable in Canadian dollars. Manitoba Hydro borrowings was payable 61% in Canadian dollars (60% at March 31, 2006) and 39% in U.S. dollars (40% at March 31, 2006).
4.	The above borrowings, guarantees and obligations were outstanding for the following purposes:

	June 30, 2006				March 31, 2006
	($ Thousands)		($ Per Capita)		($ Thousands)		($ Per Capita)
			(Note 5)				(Note 5)
General Government Programs		6,496,839		5,507		6,582,745		5,580
Manitoba Hydro		6,433,318		5,453		6,524,289		5,530
Capital Investments		470,206		399		463,766		393
Health Facilities		766,834		650		766,834		650
Government Enterprises and Other (Note 6)		502,336		426		502,336		426
Other Crown Organizations		1,266,835		1,074		1,272,126		1,078
		15,936,368		13,509		16,112,096		13,657
	(Note 7)

5.	Per Capita data is based upon population figures at April 1, 2006 as reported by Statistics Canada.
6.	In 2003/04, the Province, in accordance with PSAB 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 debt 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.
7.	Provincial borrowings, guarantees and obligations decreased by $175.7 million. This decrease was primarily due to matured General Government Program borrowings which have not yet been refinanced, the impact of a stronger Canadian dollar and a net increase in Manitoba Hydro’s sinking fund offset by funding of Manitoba Hydro’s capital program. Manitoba Hydro’s U.S. dollar revenues are sufficient to pay the interest and principal on all outstanding U.S. dollar borrowings.

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PROVINCE OF MANITOBA FINANCIAL REPORT APRIL TO JUNE 2006

DEBT RETIREMENT FUND
PROJECTION FOR THE YEAR ENDING MARCH 31, 2007
(with comparative figures for March 31, 2006)

(UNAUDITED)
($000s)

	2006/07			2005/06
	Projection			Actual (2)
Fund Balance, Beginning of Year		25,000			—
Revenue:
Interest Earnings		1,000			—
Transfer from Operating Fund (1)		110,495			110,495
		111,495			110,495
Expenditure:
Transfer to Operating Fund for:
- Pension Assets Fund (3)		(85,495	)		(85,495	)
- Sinking Fund Obligation		—			—
		(85,495	)		(85,495	)
Fund Balance, End of Year		51,000			25,000

Notes:
(1)	Based on projection included in the 2006 Budget.
(2)	Based on 2005/06 Public Accounts.
(3)	The actual allocation of funds for 2006/07 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 2006

PENSION ASSETS FUND
PROJECTION FOR THE YEAR ENDING MARCH 31, 2007
(with comparative figures for March 31, 2006)

(UNAUDITED)
($000s)

	2006/07		2005/06
	Projection (1)		Actual (2)
	(thousands of dollars)
Fund Balance, Beginning of Year		536,986		382,342
Revenue:
Interest Earnings		14,000		60,761
Transfer from Debt Retirement Fund (3)		85,495		85,495
Transfer from Departments and Crown Corporations		9,500		8,388
		108,995		154,644
Fund Balance, End of Year		645,981		536,986

Notes:
(1)	Based on YTD earnings and contributions (extrapolated to March 31, 2007)
(2)	Based on 2005/06 Public Accounts
(3)	The actual allocation of funds for 2006/07 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 2006

FISCAL STABILIZATION FUND
PROJECTION FOR THE YEAR ENDING MARCH 31, 2007
(with comparative figures for March 31, 2006)

(UNAUDITED)
($000s)

	2006/07			2005/06
	Projection			Actual (1)
Health Programs
Program Fund Balance — Beginning of Year		202,411			210,067
Interest Earnings		6,485			6,044
Transfer to General Programs
- Wait Time Reduction Programming		(30,000	)		(13,700	)
- Other Health Related Programming		—			—
Program Fund Balance — End of Year		178,896			202,411
General Programs
Program Fund Balance — Beginning of Year		329,576			275,876
Interest Earnings		10,328			8,915
Recovered from Health Programs
- Wait Time Reduction Programming		—			13,700
Transfer to/from the Operating Fund
- Year-end Positive Balance (2)		3,338			31,085
- General Requirements		(55,000	)		—
Program Fund Balance — End of Year		288,242			329,576
Total Fund Balance, End of Year		467,138			531,987

Notes:
(1)	Based on 2005/06 Public Accounts.
(2)	Based on projection included in the 2006 Budget.

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