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

EXHIBIT 99.2

PROVINCE OF MANITOBA

2007/08 QUARTERLY FINANCIAL REPORT
APRIL TO JUNE 2007

NOTES TO THE QUARTERLY FINANCIAL REPORT FOR CORE GOVERNMENT

Budget 2007 is the first Summary Budget produced by the Government of Manitoba that aligns with the accounting standards set by the Public Sector Accounting Board (PSAB), which require provincial governments to report on the broader definition of government. It consolidates the budget plan for core government with projections for all Crown organizations, regional health authorities, hospitals, colleges, universities and school divisions in the province to fully reflect Generally Accepted Accounting Principles (GAAP). The consolidation of these entities and core government is the Government Reporting Entity (GRE).

The transition to Summary Budgeting and Reporting requires not only that the annual budget and financial statements (public accounts) be tabled on a summary basis, but that all financial reporting, including quarterly reporting, must be transitioned to represent the GRE. In addition, quarterly reporting must also be made consistent with GAAP. As noted in the 2007 Budget, the government’s quarterly financial reporting will remain largely unchanged for 2007/08. In 2008/09, appropriate changes will be introduced and the transformation of quarterly reporting will be completed by the end of 2009/10.

Consistent with the transition plan, this report presents the unaudited financial results of the core government for the first quarter of the 2007/08 fiscal year based on the structure established in the Estimates of Revenue and Expenditure for the fiscal year ending March 31, 2008. The comparative data provided for the 2006/07 fiscal year has been restated to reflect the current structure.

FIRST QUARTER – ACTUAL TO ESTIMATE

The first quarter net result of expenditure exceeding revenue by $201.5 million was $56.6 million lower than the projection of $258.1 million. First quarter revenue was $122.5 million higher than projected and first quarter expenditure was $65.9 million higher than estimated primarily as a result of differences in the timing of expenditures and receipts.

FIRST QUARTER COMPARED TO PREVIOUS YEAR’S RESULTS

The net result for the first quarter was $0.5 million higher than for the same period last year.

Total revenues were $184.4 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 $184.9 million higher than the previous year. Program expenditures were $187.9 million higher while public debt costs were $3.0 million lower. The largest increases in program expenditures occurred in the departments of Health, Education, Citizenship and Youth and Family Services and Housing. As well, election costs of $6.2 million were included in the first quarter program expenditures.

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PROVINCE OF MANITOBA APRIL TO JUNE 2007

CAPITAL INVESTMENT

Overall, expenditures for tangible capital assets were $46.0 million, $18.2 million less than estimated at the end of the first quarter primarily due to timing variances related to the Manitoba Floodway Expansion and highway related activities. Total expenditures related to tangible capital assets were $15.3 million higher than the same period last year.

DEBT/PENSION REPAYMENT

The 2007 Budget provides for a $110.5 million contribution to the Debt Retirement Fund. An allocation committee will determine the share of those funds directed to pension or general purpose debt. In the 2007 Budget plan, the 2007/08 allocation is $85.5 million to the pension liability and $25.0 million for general purpose debt.

YEAR END PROJECTION

Summary net income of $174.8 million was projected in the 2007 Budget. For the core government, the projection was for revenue to exceed expenditure by $76.0 million prior to transfers of prepaid funding from Canada for wait time reduction programming and a transfer to the Debt Retirement Fund, for a net result of $2.5 million. The second quarter financial report will provide updated information on revenue and expenditures which will provide the basis for a revised year end projection.

FISCAL STABILIZATION FUND

The fund is projected to have a balance of $655.1 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 2007 Budget was $2,946.2 million including refinancing of maturing debt, the funding of the Province’s pension liability for the Teachers’ Retirement Allowances Fund (TRAF), funding for Manitoba Hydro, Capital Investments, Health’s capital programs and new self sustaining requirements.

For the period April 1, 2007 to June 30, 2007, $134.2 million was raised through the issue of Manitoba Hydro Savings Bonds and $1,374.0 million was raised in the public market.

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PROVINCE OF MANITOBA APRIL TO JUNE 2007

CORE GOVERNMENT
STATEMENT OF REVENUE AND EXPENDITURE
FOR THE THREE MONTHS ENDED JUNE 30, 2007

(UNAUDITED)
($000s)

	2007/08			Comparison to 2007/08						Comparison to 2006/07
	ACTUAL			Estimate			Variance			Actual			Variance
Revenue
Own Source Revenue		1,270,032			1,248,784			21,248			1,210,534			59,498
Government of Canada		840,912			739,670			101,242			715,993			124,919
Total Revenue		2,110,944			1,988,454			122,490			1,926,527			184,417
Expenditure
Program Expenditure		2,236,669			2,169,770			66,899			2,048,737			187,932
Debt Servicing		75,823			76,776			(953	)		78,842			(3,019	)
Total Expenditure		2,312,492			2,246,546			65,946			2,127,579			184,913
Net Result June 30, 2007		(201,548	)		(258,092	)		56,544			(201,052	)		(496	)
Transfer to Debt Retirement Fund		—			—			—			—			—
Transfer from the Fiscal Stabilization Fund		—			—			—			—			—
Net Income (Loss)		(201,548	)		(258,092	)		56,544			(201,052	)		(496	)

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PROVINCE OF MANITOBA APRIL TO JUNE 2007

CORE GOVERNMENT
STATEMENT OF REVENUE
FOR THE THREE MONTHS ENDED JUNE 30, 2007

(UNAUDITED)
($000s)

	2007/08		Comparison to 2007/08					Comparison to 2006/07
	ACTUAL		Estimate		Variance			Actual		Variance
Taxation:
Finance
- Individual Income Tax		532,044		532,044		—			501,864		30,180
- Corporation Income Tax		75,552		75,552		—			95,922		(20,370	)
- Corporation Capital Tax		40,619		39,000		1,619			40,059		560
- Gasoline Tax		25,074		23,800		1,274			24,808		266
- Insurance Corporations Tax		15,306		15,424		(118	)		14,897		409
- Land Transfer Tax		9,543		8,953		590			8,739		804
- Levy for Health and Education		51,097		51,200		(103	)		48,684		2,413
- Mining Tax		45,396		45,852		(456	)		16,379		29,017
- Motive Fuel Tax		12,740		12,000		740			12,333		407
- Retail Sales Tax		217,725		208,100		9,625			199,345		18,380
- Tax Administration and Miscellaneous Tax Act		12,933		11,700		1,233			11,722		1,211
- Tobacco Tax		32,282		34,300		(2,018	)		34,296		(2,014	)
- Other Taxes		560		520		40			556		4
		1,070,871		1,058,445		12,426			1,009,604		61,267
Science, Technology, Energy and Mines
- Oil and Natural Gas Tax		2,446		2,581		(135	)		3,336		(890	)
		1,073,317		1,061,026		12,291			1,012,940		60,377
Other Revenue:
Automobile and Motor Carrier Licenses and Fees		29,547		24,906		4,641			27,032		2,515
Justice		10,772		9,922		850			8,763		2,009
Water Power Rentals		27,109		23,488		3,621			31,498		(4,389	)
Manitoba Lotteries Corporation		68,000		68,000		—			66,000		2,000
Manitoba Liquor Control Commission		27,900		27,700		200			29,700		(1,800	)
Other Sources		33,387		33,742		(355	)		34,601		(1,214	)
		196,715		187,758		8,957			197,594		(879	)
Total Own Source Revenue		1,270,032		1,248,784		21,248			1,210,534		59,498

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PROVINCE OF MANITOBA APRIL TO JUNE 2007

CORE GOVERNMENT
STATEMENT OF REVENUE
FOR THE THREE MONTHS ENDED JUNE 30, 2007

(UNAUDITED)
($000s)

	2007/08		Comparison to 2007/08					Comparison to 2006/07
	ACTUAL		Estimate		Variance			Actual		Variance
Government of Canada:
Equalization		425,837		425,837		—			414,264		11,573
Canada Health Transfer (CHT)		201,757		201,757		—			192,512		9,245
Canada Social Transfer (CST)		85,106		85,106		—			83,030		2,076
EcoTrust Fund		53,819		—		53,819			—		53,819
Child Care		8,998		—		8,998			—		8,998
Health Funds		38,704		3,153		35,551			1,941		36,763
Departments
- Labour Market Agreements		21,878		17,371		4,507			21,878		—
- Other Agreements		4,813		6,446		(1,633	)		2,368		2,445
Total Government of Canada		840,912		739,670		101,242			715,993		124,919
Total Revenue		2,110,944		1,988,454		122,490			1,926,527		184,417

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PROVINCE OF MANITOBA APRIL TO JUNE 2007

CORE GOVERNMENT
STATEMENT OF PART A — OPERATING EXPENDITURE
FOR THE THREE MONTHS ENDED JUNE 30, 2007

(UNAUDITED)
($000s)

	2007/08		Comparison to 2007/08					Comparison to 2006/07
	ACTUAL		Estimate		Variance			Actual		Variance
Legislative Assembly		12,770		13,520		(750	)		6,555		6,215
Executive Council		706		739		(33	)		813		(107	)
Aboriginal and Northern Affairs		9,800		9,983		(183	)		13,797		(3,997	)
Advanced Education and Literacy		107,438		107,606		(168	)		108,357		(919	)
Agriculture, Food and Rural Initiatives		14,997		20,083		(5,086	)		18,992		(3,995	)
Civil Service Commission		1,189		1,222		(33	)		1,019		170
Competitiveness, Training and Trade		20,577		22,536		(1,959	)		21,048		(471	)
Conservation		29,161		28,369		792			27,772		1,389
Culture, Heritage, Tourism and Sport		27,747		27,206		541			26,851		896
Education, Citizenship and Youth		471,857		459,226		12,631			420,309		51,548
Employee Pensions and Other Costs		18,138		17,650		488			15,671		2,467
Family Services and Housing		249,910		260,767		(10,857	)		242,201		7,709
Finance — Departmental Costs		34,943		35,095		(152	)		35,311		(368	)
Finance — Debt Servicing Costs		75,823		76,776		(953	)		78,842		(3,019	)
Health		1,010,651		929,782		80,869			889,283		121,368
Healthy Child Manitoba		5,504		6,028		(524	)		5,679		(175	)
Infrastructure and Transportation		104,225		104,129		96			100,550		3,675
Intergovernmental Affairs		27,193		27,772		(579	)		27,507		(314	)
Justice		56,043		57,230		(1,187	)		53,173		2,870
Labour and Immigration		7,839		7,579		260			6,920		919
Manitoba Seniors and Healthy Aging Secretariat		197		230		(33	)		184		13
Science, Technology, Energy and Mines		15,233		17,954		(2,721	)		17,152		(1,919	)
Water Stewardship		5,831		5,676		155			6,118		(287	)
Enabling Appropriations		230		416		(186	)		412		(182	)
Other Appropriations		4,490		8,972		(4,482	)		3,063		1,427
Total Expenditure		2,312,492		2,246,546		65,946			2,127,579		184,913

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PROVINCE OF MANITOBA APRIL TO JUNE 2007

CORE GOVERNMENT
STATEMENT OF PART B — CAPITAL INVESTMENT
FOR THE THREE MONTHS ENDED JUNE 30, 2007

(UNAUDITED)
($000s)

	2007/08		Comparison to 2007/08					Comparison to 2006/07
	ACTUAL		Estimate		Variance			Actual		Variance
Legislative Assembly		—		—		—			6		(6	)
Agriculture, Food and Rural Initiatives		—		—		—			—		—
Competitiveness, Training & Trade		—		—		—			—		—
Conservation
General Assets		76		76		—			358		(282	)
Infrastructure Assets		845		1,225		(380	)		325		520
Total Conservation		921		1,301		(380	)		683		238
Culture, Heritage, Tourism and Sport		—		—		—			—		—
Education, Citizenship and Youth		100		—		100			—		100
Family Services & Housing		218		268		(50	)		166		52
Finance		306		372		(66	)		—		306
Health		—		100		(100	)		37		(37	)
Infrastructure and Transporation
General Assets		9,070		7,771		1,299			3,435		5,635
Infrastructure Assets		34,937		53,450		(18,513	)		25,724		9,213
Total Infrastructure and Transportation		44,007		61,221		(17,214	)		29,159		14,848
Justice		1		150		(149	)		1		—
Science, Technology, Energy and Mines		448		803		(355	)		684		(236	)
Water Stewardship		—		—		—			—		—
Enabling Appropriations:
-Internal Reform, Workforce Adj. and General Salary Increases
General Assets		—		—		—			—		—
Infrastructure Assets		—		—		—			—		—
Total Enabling Appropriations		—		—		—			—		—
Total Capital Assets		46,001		64,215		(18,214	)		30,736		15,265

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PROVINCE OF MANITOBA APRIL TO JUNE 2007

CORE GOVERNMENT
STATEMENT OF PROVINCIAL BORROWINGS, GUARANTEES AND OBLIGATIONS
June 30, 2007
(with comparative figures for March 31, 2007)

(UNAUDITED)
($000s)

	Canadian			Canadian			Increase
	Dollar			Dollar			(Decrease)
	Valuation			Valuation			June 30, 2007
	(Note 1)			(Note 1)			over
	June 30, 2007			March 31, 2007			March 31, 2007
Provincial Borrowings Payable in:
Canadian Dollars		14,126,175			13,661,521			464,654
Issues Hedged to Canadian Dollars		3,393,450			3,482,100			(88,650	)
U.S. Dollars		2,023,703			2,194,026			(170,323	)
Issues Hedged to U.S. Dollars		562,488			609,829			(47,341	)
Subtotal Provincial Borrowings		20,105,816			19,947,476			158,340
Guarantees and Obligations Payable in:
Canadian Dollars		1,260,270			1,406,776			(146,506	)
U.S. Dollars		—			—			—
Subtotal Guarantees and Obligations (Note 2)		1,260,270			1,406,776			(146,506	)
Subtotal Provincial Borrowings, Guarantees and Obligations (Note 3)		21,366,086			21,354,252			11,834
Less: Sinking Fund Investments		(4,452,253	)		(4,736,510	)		(284,257	)
Less: Debt Retirement Fund		(51,000	)		(51,000	)		—
Total Provincial Borrowings, Guarantees and and Obligations Outstanding (Note 4)		16,862,833			16,566,742			296,091

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, 2007 reflected Net Debt of core government operations (the operating fund) to be $8.3 billion (see Public Accounts, Volume 1, Page 107) and for the government reporting entity to be $10.4 billion (see Public Accounts, Volume 1, page 56).

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PROVINCE OF MANITOBA APRIL TO JUNE 2007

CORE GOVERNMENT
STATEMENT OF PROVINCIAL BORROWINGS, GUARANTEES AND OBLIGATIONS
June 30, 2007
(with comparative figures for March 31, 2007)

	NOTES:
1.	The Canadian Dollar Valuation is calculated using the foreign currency exchange rates in effect at June 30, 2007 and at March 31, 2007. As at June 30, 2007, the U.S. dollar exchange rate was $1.0634 ($1.1529 at March 31, 2007).
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 June 30, 2007, total provincial borrowings and guarantees were payable 88% in Canadian dollars and 12% 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 were payable 65% in Canadian dollars (62% at March 31, 2007) and 35% in U.S. dollars (38% at March 31, 2007).
4.	The above borrowings, guarantees and obligations were outstanding for the following purposes:

	June 30, 2007				March 31, 2007
	($ Thousands)		($ Per Capita)		($ Thousands)		($ Per Capita)
			(Note 5)				(Note 5)
Government Programs — General		6,386,712		5,399		6,564,303		5,549
Government Programs — TRAF (Note 8)		500,000		423		—		—
Manitoba Hydro		6,641,785		5,615		6,636,123		5,610
Capital Investments		757,282		640		749,221		633
Health Facilities		812,219		687		780,219		660
Government Enterprises and Other (Note 6)		533,152		451		533,152		451
Other Crown Organizations		1,231,683		1,041		1,303,724		1,102
		16,862,833		14,256		16,566,742		14,005
	(Note 7)

5.	Per Capita data is based upon population figures at April 1, 2007 as reported by Statistics Canada.
6.	Includes debentures issued by school boards and hospitals which are held by government enterprises, amounts owed to the federal government and other long term loans payable to government enterprises.
7.	Provincial borrowings, guarantees and obligations increased by $296.1 million. Increases in borrowings were primarily due to the funding of the Province’s contribution to its liability for the Teachers’ Retirement Allowances Fund (TRAF), funding of Manitoba Hydro’s capital program and Health Facilities borrowings. The increases in borrowings were offset by matured General Government program borrowings which have not yet been refinanced, the impact of a stronger Canadian dollar and an increase in Manitoba Hydro’s sinking fund contribution. Manitoba Hydro’s U.S. dollar revenues are sufficient to pay the interest and principal on all outstanding U.S. dollar borrowings.
8.	With the government’s initial contribution to TRAF, the net pension liability decreased $500.0 million during the first quarter of 2007/08. At June 30, 2007 the government’s net pension liability for TRAF has been reduced from $1,922 million to $1,422 million.

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PROVINCE OF MANITOBA APRIL TO JUNE 2007

DEBT RETIREMENT FUND
PROJECTION FOR THE YEAR ENDING MARCH 31, 2008
(with comparative figures for March 31, 2007)
($000s)

	2007/08			2006/07
	Projection (1)			Actual (2)
Fund Balance, Beginning of Year		51,000			25,000
Contribution		110,495			110,495
Interest		2,000			1,000
Transfer to Pension Assets Fund		(85,495	)		(85,495	)
Fund Balance, End of Year		78,000			51,000

Notes:
(1)	Based on projection included in the 2007 Budget.
(2)	Based on 2006/07 Public Accounts.

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PROVINCE OF MANITOBA APRIL TO JUNE 2007

PENSION ASSETS FUND
PROJECTION FOR THE YEAR ENDING MARCH 31, 2008
(with comparative figures for March 31, 2007)
($000s)

	2007/08			2006/07
	Projection (1)			Actual (2)
Fund Balance, Beginning of Year		699,264			536,986
Contributions:
Teachers’ Retirement Allowances Fund(3)		1,502,000			—
Debt Retirement Fund (4)		85,495			85,495
Net Investment Earnings		107,000			66,545
Current Service Contributions		78,000			10,238
		1,772,495			162,278
Transfers
Teachers’ Retirement Allowances Fund Pension
Payments(3)		(134,000	)		—
Fund Balance, End of Year		2,337,759			699,264

Notes:
(1)	Based on YTD earnings and contributions (extrapolated to March 31, 2008).
(2)	Based on 2006/07 Public Accounts.
(3)	Reflects the impact of the government’s decision to fund 75% of the employer’s liability.
(4)	Based on projection included in the 2007 Budget.

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PROVINCE OF MANITOBA APRIL TO JUNE 2007

FISCAL STABILIZATION FUND
PROJECTION FOR THE YEAR ENDING MARCH 31, 2008
(with comparative figures for March 31, 2007)
($000s)

	2007/08			2006/07
	Projection			Actual (2)
Health Programs
Fund Balance, Beginning of Year		175,195			202,411
Interest Earnings		5,341			7,856
Wait Time Reduction (1)		(37,000	)		(27,419	)
Other Health Related Programming		—			(7,653	)
Fund Balance, End of Year		143,536			175,195
General Programs
Fund Balance, Beginning of Year		487,955			329,576
Interest Earnings		21,087			12,792
Recovered from Health Programs
- Wait Time Reduction Programming		—			27,419
- Other Health Related Programming		—			7,653
Year-end Core Government Result (1)		2,500			110,515
Fund Balance, End of Year		511,542			487,955
Total Fund Balance, End of Year		655,078			663,150

Note:
(1)	Based on projection included in the 2007 Budget.
(2)	Based on 2006/07 Public Accounts.

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