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

Exhibit 99.1

SUMMARY FINANCIAL
STATEMENTS

FOR THE YEAR ENDED

March 31, 2010

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SECTION 1 SUMMARY FINANCIAL STATEMENTS

TABLE OF CONTENTS	PAGE
Statement of Responsibility		69
Auditor’s Report		71
Consolidated Statement of Financial Position		73
Consolidated Statement of Revenue and Expense		74
Consolidated Statement of Accumulated Deficit		75
Consolidated Statement of Change in Net Debt		76
Consolidated Statement of Cash Flow		77
Notes to the Summary Financial Statements		78
Schedules to the Summary Financial Statements
Schedule 1 — Consolidated Statement of Amounts Receivable		100
Schedule 2 — Consolidated Statement of Loans and Advances		101
Schedule 3 — Government Business Enterprises Schedule of Consolidated
Operating Results and Financial Position		102
Schedule 4 — Consolidated Statement of Borrowings		103
Schedule 5 — Consolidated Statement of Accounts Payable, Accrued Charges, Provisions and Unearned Revenue		104
Schedule 6 — Consolidated Statement of Pension Liability		105
Schedule 7 — Consolidated Statement of Tangible Capital Assets		107
Schedule 8 — Funds, Organizations and Business Enterprises Comprising		108
the Government Reporting Entity
Schedule 9 — Consolidated Statement of Operations by Sector		112
Schedule 10 — Consolidated Details and Reconciliation to Core Government Results		114

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STATEMENT OF RESPONSIBILITY

The summary financial statements are prepared under the direction of the Minister of Finance in accordance with the stated accounting policies of the Government reporting entity and include summary statements of financial position, revenue and expense, accumulated deficit, change in net debt, cash flow, notes and schedules integral to the statements. Together, they present fairly, in all material respects, the financial condition of the Government reporting entity at the fiscal year end and the results of its operations for the year then ended in accordance with Canadian generally accepted accounting principles, applied on a basis consistent with that of the preceding year.

The Government is responsible for the integrity and objectivity of the summary financial statements. In the preparation of these statements, estimates are sometimes necessary because a precise determination of certain assets, liabilities, revenues and expenses is dependent on future events. The Government believes such estimates have been based on careful judgements and have been properly reflected in the summary financial statements.

The Government fulfills its accounting and reporting responsibilities, through the Office of the Provincial Comptroller, by maintaining systems of financial management and internal control. The systems are continually enhanced and modified to provide timely and accurate information, to safeguard and control the Government’s assets, and to ensure all transactions are in accordance with The Financial Administration Act.

The Auditor General expresses an independent opinion on these financial statements. Her report, stating the scope of her audit and opinion, appears on the following page.

These financial statements are tabled in the Legislature. They are referred to the Standing Committee on Public Accounts, which reports to the Legislature on the results of its examination together with any recommendations it may have with respect to the financial statements and accompanying audit opinion.

On behalf of the Government of the Province of Manitoba.

Original signed by
 

Betty-Anne Pratt, CA 

Provincial Comptroller 

August 16, 2010

AUDITOR’S REPORT
Summary Financial Statements for the Government Reporting Entity
Province of Manitoba

To the Legislative Assembly of the Province of Manitoba

We have audited the Consolidated Statement of Financial Position of the Province of Manitoba as at March 31, 2010 and the Consolidated Statements of Revenue and Expense, Accumulated Deficit, Change in Net Debt and Cash Flow for the year then ended. These financial statements are the responsibility of the Government of Manitoba. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

In our opinion, these Summary Financial Statements for the Government Reporting Entity present fairly, in all material respects, the financial position of the Province of Manitoba as at March 31, 2010 and the results of its operations and its cash flow for the year then ended, in accordance with Canadian generally accepted accounting principles.

	Original document signed by:
	Carol Bellringer
Winnipeg, Manitoba	Carol Bellringer, FCA, MBA
August 16, 2010	Auditor General

500 — 330 Portage Avenue Winnipeg, Manitoba R3C 0C4 office: (204) 945-3790 fax:
(204) 945-2169 www.oag.mb.ca

PROVINCE OF MANITOBA
PUBLIC ACCOUNTS 2009/10

SUMMARY FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at March 31, 2010

		($ millions)
SCHEDULE		2010			2009
	FINANCIAL ASSETS
	Cash and cash equivalents		1,386			1,372
	Temporary investments (Note 2)		553			734
1	Amounts receivable		1,263			1,143
	Inventories for resale		10			11
	Portfolio investments (Note 3)		2,564			2,788
2	Loans and advances		786			767
3	Equity in government business enterprises (Note 4)		3,068			2,127
	Total Financial Assets		9,630			8,942
	LIABILITIES
4	Borrowings		16,111			14,891
5	Accounts payable, accrued charges, provisions and unearned revenue		3,513			3,528
6	Pension liability (Note 5)		1,800			1,991
	Total Liabilities		21,424			20,410
	NET DEBT		(11,794	)		(11,468	)
	NON-FINANCIAL ASSETS		65			36
	Inventories held for use
	Prepaid expenses		46			38
7	Tangible capital assets		7,315			6,518
	Total Non-Financial Assets		7,426			6,592
	ACCUMULATED DEFICIT		(4,368	)		(4,876	)
	Contingencies (Note 6)
	Contractual Obligations (Note 7)

The accompanying notes and schedules are an integral part of these financial statements.

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PROVINCE OF MANITOBA
PUBLIC ACCOUNTS 2009/10

SUMMARY FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF REVENUE AND EXPENSE
For the Year Ended March 31, 2010

	($ millions)
	2010					2009
	Budget		Actual			Actual
REVENUE
Income taxes:
Corporation income tax		347		257			386
Individual income tax		2,343		2,402			2,455
Other taxes:
Retail sales tax		1,595		1,570			1,569
Fuel taxes		220		255			253
Levy for health and education		263		264			261
Mining tax		10		10			46
Education property tax		655		668			657
Other taxes		454		514			490
Fees and other revenue		1,593		1,791			1,720
Federal transfers:
Equalization		2,063		2,063			2,063
Canada Health and Canada Social Transfers		1,310		1,302			1,263
Shared cost and other		730		559			540
Net income from government business enterprises (Schedule 3)		815		772			764
Sinking funds and other investment earnings		246		220			296
Total Revenue (Schedules 9 and 10)		12,644		12,647			12,763
EXPENSES
Health and Healthy Living		4,731		4,830			4,588
Education		3,228		3,227			3,091
Family Services and Consumer Affairs		1,235		1,295			1,192
Community, Economic and Resource Development		1,765		1,814			1,729
Justice and Other Expenditures		871		926			882
Debt Servicing (Note 8)		766		756			830
Total Expenses (Schedules 9 and 10)		12,596		12,848			12,312
NET INCOME (LOSS) FOR THE YEAR		48		(201	)		451

2010 Budget numbers, originally presented in Budget 2009, have been restated to reflect the 2010 reorganization and presentation changes as presented in the revised 2009/10 Budget presented in Budget 2010.

The accompanying notes and schedules are an integral part of these financial statements.

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PROVINCE OF MANITOBA
PUBLIC ACCOUNTS 2009/10

SUMMARY FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF ACCUMULATED DEFICIT
For the Year Ended March 31, 2010

	($ millions)
	2010						2009
	Budget			Actual			Actual
Opening accumulated deficit, as previously reported		(4,904	)		(4,904	)		(4,593	)
Restatements (Note 9)
Adoption of accounting policy changes by government business enterprises		—			(62	)		(18	)
Presentation of deferred capital grants		—			76			65
Correction of pension liability		—			12			—
Other		—			2			—
Opening accumulated deficit, as restated		(4,904	)		(4,876	)		(4,546	)
Other Comprehensive Income (Loss) (Schedule 3)		—			709			(781	)
Net Income (Loss) for the year		48			(201	)		451
Closing accumulated deficit, as restated		(4,856	)		(4,368	)		(4,876	)

The accompanying notes and schedules are an integral part of these financial statements.

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PROVINCE OF MANITOBA
PUBLIC ACCOUNTS 2009/10

SUMMARY FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CHANGE IN NET DEBT
For the Year Ended March 31, 2010

	($ millions)
	2010						2009
	Budget			Actual			Actual
Net Income (Loss) for the year		48			(201	)		451
Tangible Capital Assets
Acquisition and reclassification of tangible capital assets		(1,140	)		(1,227	)		(978	)
Amortization of tangible capital assets		383			404			375
Disposal of tangible capital assets		—			26			17
Net Acquisition of Tangible Capital Assets		(757	)		(797	)		(586	)
Other Non-Financial Assets
Increase in inventories		—			(29	)		—
Increase in prepaid expenses		—			(8	)		(2	)
Net Acquisition of Other Non-Financial Assets		—			(37	)		(2	)
Other Comprehensive Income (Loss) (Schedule 3)		—			709			(781	)
(Increase) in Net Debt		(709	)		(326	)		(918	)
Net Debt, beginning of year, as restated (Note 9)		(11,100	)		(11,468	)		(10,550	)
Net Debt, end of year		(11,809	)		(11,794	)		(11,468	)

The accompanying notes and schedules are an integral part of these financial statements.

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PROVINCE OF MANITOBA
PUBLIC ACCOUNTS 2009/10

SUMMARY FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CASH FLOW
For the Year Ended March 31, 2010

	($ millions)
	2010			2009
Cash and cash equivalents provided by (used in)
Operating Activities
Net income (loss) for the year		(201	)		451
Changes in non-cash items:
Temporary investments		181			(30	)
Amounts receivable		(130	)		57
Valuation allowance		12			(22	)
Inventories		(28	)		(1	)
Prepaids		(8	)		(2	)
Accounts payable, accrued charges, provisions and deferrals		(15	)		243
Pension liability		(191	)		(225	)
Amortization of foreign currency fluctuation		5			6
Amortization of debt discount		(8	)		(7	)
Unamortized losses on derivative contracts		(4	)		(22	)
Loss on disposal of tangible capital assets		26			17
Amortization of tangible capital assets		404			375
		43			840
Other Comprehensive Income (Loss)(Schedule 3)		709			(781	)
Changes in equity in government business enterprises		(941	)		552
Cash provided by (used in) operating activities		(189	)		611
Capital Activities
Acquisition of tangible capital assets		(1,227	)		(978	)
Cash used in capital activities		(1,227	)		(978	)
Investing Activities
Investments purchased		(2,049	)		(1,723	)
Investments sold or matured		1,772			1,452
Cash used in investing activities		(277	)		(271	)
Financing Activities
Debt issued		4,684			4,031
Debt redeemed		(2,977	)		(3,847	)
Cash provided by financing activities		1,707			184
Increase (Decrease) in cash and cash equivalents		14			(454	)
Cash and cash equivalents, beginning of year		1,372			1,826
Cash and cash equivalents, end of year		1,386			1,372

The accompanying notes and schedules are an integral part of these financial statements.

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PROVINCE OF MANITOBA
PUBLIC ACCOUNTS 2009/10

NOTES TO THE SUMMARY FINANCIAL STATEMENTS
For the Year Ended March 31, 2010

1. SIGNIFICANT ACCOUNTING POLICIES

A. General Basis of Accounting

The summary financial statements have been prepared in accordance with Canadian generally accepted accounting principles (GAAP) for senior governments as recommended by the Public Sector Accounting Board (PSAB) of the Canadian Institute of Chartered Accountants (CICA).

B. The Government Reporting Entity

Various funds, Crown organizations (Crowns) and government business enterprises (GBEs) comprising the Government Reporting Entity (GRE) are listed in Schedule 8.

To be considered a part of the GRE, an organization must be controlled by the Government. Control, as defined by PSAB, is the power to govern the financial and operating policies of another organization with expected benefits or the risk of loss to the Government from the other organization’s activities.

C. Basis of Consolidation

Crowns are consolidated after adjusting their accounting policies to a basis consistent with the accounting policies of the GRE as outlined in note 1D of the significant accounting policies. Inter-entity accounts and transactions are eliminated upon consolidation, except for retail sales tax. Where the fiscal year-end dates of Crowns are not the same as that of the GRE, and their transactions significantly affect the financial statements, their financial results are updated to March 31.

GBEs, whose principal activity is carrying on a business, maintain their accounts in accordance with accounting principles which are generally accepted for business enterprises and which are considered appropriate to their individual objectives and circumstances. They derive the majority of their revenue from sources outside the GRE. They are reported in these summary financial statements using the modified equity method of accounting. Under the modified equity method, the original investment of the Government, in GBEs, is initially recorded at cost and adjusted annually to include the net earnings/losses and other net equity changes of these enterprises, without adjusting their accounting policies to a basis consistent with that of the GRE.

The financial results of GBEs are not updated to March 31, where their fiscal year end is not the same as that of the GRE, except when transactions which, would significantly affect the summary financial statements, occur during the intervening period. Inter-entity accounts and transactions with GBEs are not eliminated. Supplementary financial information describing the financial position and results of operations of these enterprises is presented in Schedule 3.

The CICA’s Accounting Standards Board has announced that effective January 1, 2011 Canadian publicly accountable enterprises will adopt International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board. GBEs are required to adopt IFRS for their financial reporting. IFRS standards are not required to be adopted by senior governments and will not be adopted for the summary financial statements. As the GBEs are included in the summary financial statements on a modified equity basis, the summary financial statements could be impacted by changes to their reporting. The Government is currently assessing the potential impact of these changes.

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PROVINCE OF MANITOBA
PUBLIC ACCOUNTS 2009/10

D. Basis of Specific Accounting Policies

(i) Gross Accounting Concept

Revenues and expenses are recorded as gross amounts with the following exceptions:

(1)	Refunds of revenue are treated as reductions of current year revenue.
(2)	Decreases in valuation allowances are treated as reductions to expense.
(3)	Recoveries of the debt servicing costs on self-sustaining debt of GBEs are recorded as a reduction of debt servicing expense.

(ii) Revenue

(1) Government transfers

Transfer payments from the Government of Canada include all accruals determined before June 15 each year for current year entitlements that have been authorized by March 31, for which any eligibility criteria have been met and that can be reasonably estimated.

(2) Individual and corporation income tax

The Government’s share of individual and corporation income tax is recorded based upon cash receipts to March 31 plus an accrual of adjustments determined before June 15 each year.

(3) Other revenue

All other revenues are recorded on an accrual basis except when the accruals cannot be determined with a reasonable degree of certainty or when their estimation is impracticable.

(iii) Expenses

(1) Accrual accounting

All expenses incurred for goods or services received are recorded on an accrual basis.

Expenses include provisional amounts recorded in anticipation of costs, which are quantifiable and have been identified as obligations.

(2) Government transfers

Government transfers are recognized as expenses in the period in which the transfer is authorized and any eligibility criteria are met and the amounts can be reasonably estimated.

(iv) Financial Assets

(1) Loans and advances

Loans and advances are recorded at cost less valuation allowances. A valuation allowance is provided to reduce the value of the assets to their estimated realizable value or to reflect the impact of significant concessionary terms on outstanding loans. Valuation allowances are made when collection is considered doubtful. Premiums that may arise from the early repayment of loans or advances are reflected as deferred revenue and are amortized monthly to debt servicing expense over the term of the related debt issue.

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PROVINCE OF MANITOBA
PUBLIC ACCOUNTS 2009/10

Investments denominated in foreign currency are translated to the Canadian dollar equivalent at the exchange rate in effect at March 31, unless the rate of exchange or a forward foreign exchange contract fixing the value has been negotiated, in which case that rate or amount is used. The year end investment translation adjustments reflecting the foreign currency fluctuation between year ends are amortized monthly over the remaining life of the investment and are included with debt servicing expense. Expenses and other transaction charges incurred on the purchase of investments during the year are charged to debt servicing expense. Those expenses incurred in foreign currency are translated at the exchange rate in effect on the transaction date. Gains and losses on terminated derivative contracts are deferred and amortized on a straight-line basis over the remaining term of the contract.

(2) Inventories for resale

Inventories held for resale are recorded at the lower of cost and net realizable value.

(v) Liabilities

Liabilities are present obligations to outside parties and GBEs as a result of transactions and events occurring prior to the end of the fiscal year. The settlement of the liabilities will result in the future transfer or use of assets or other another form of settlement. Liabilities are recorded at the estimated amount ultimately payable.

(1) Borrowings

All borrowings are expressed in Canadian dollars and are shown net of unamortized debt issue costs and debt of the Government held as provincial investments. Foreign borrowings are converted at the exchange rate in effect at March 31, adjusted for any forward foreign exchange contract entered for settlement after the fiscal year end. Discounts or premiums, and commissions incurred at the time of the issue of debt are amortized monthly to debt servicing expense over the term of the debt.

The year end translation adjustments, reflecting the foreign currency fluctuation from the value at the issue date, are recorded through the unamortized foreign currency fluctuation account and amortized monthly to debt servicing expense over the remaining term of the debt. The unamortized portion of foreign currency fluctuation also reflects the gains or losses on the conversion of foreign currency debt called prior to maturity using the rates in effect at the time of the call. These gains or losses are amortized over the original remaining term of the debt or over the term of the replacement issue, whichever is shorter.

Premiums paid on interest rate options are amortized monthly starting from the date the income is received over the period of the applicable agreement. If the option is exercised, the premium is amortized over the period from the date of receipt to the maturity date of the agreement. If the option is not exercised, any unamortized premium will be immediately taken into revenue. Gains and losses on terminated derivative contracts are deferred and amortized on a straight-line basis over the remaining term of the contract.

(2) Pension liability

The Government accounts for employee pension plans by recognizing a liability and an expense in the reporting period in which the employee has provided service using the accrued benefit actuarial cost method, except as disclosed in Note 5. The value of plan assets is determined using a moving average fair value method. Under this method, fair value is the underlying basis, with any excess (or shortfall) of investment return over (or below) the expected long-term rate being amortized over a five year period. When actual experience varies from actuarial estimates, for both the accrued benefit obligation and plan assets, the difference is amortized over the expected average remaining service life of the related employee group. Past service costs from plan amendments are recognized in full in the year of the amendment.

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PROVINCE OF MANITOBA
PUBLIC ACCOUNTS 2009/10

(3) Other future employee benefit obligations

The amount of the liabilities for severance, Long Term Disability Income Plan liability and workers compensation claims are based upon actuarial calculations. The periodic actuarial valuations of these liabilities may determine that adjustments are needed to the actuarial calculations because actual experience is different from that expected and/or because of changes in actuarial assumptions used. The resulting actuarial gains or losses for the severance liability are amortized over the expected average remaining service life of the related employee group. Actuarial gains and losses for the Long Term Disability Income Plan and the workers compensation claims are recognized as they arise.

(4) Guarantees

Guarantees by the Government are made through specific agreements or legislation to repay promissory notes, bank loans, lines of credit, mortgages and other securities. Provision for losses on guarantees are recorded when it is likely that a loss will occur. The amount of the loss provision represents the Government’s best estimate of future payments less recoveries.

(5) Environmental liabilities

An environmental liability for contaminated sites is recorded when contamination is identified, and when the Government is obligated, or likely to become obligated, to incur remediation costs due to reasons of public health and safety, contractual arrangements, or compliance with environmental standards which are set out in any act or regulation (federal, provincial, municipal) recognized by the Government. The liability is based upon remediation costs determined on a site-by-site basis, measured as incremental direct costs, reduced by estimated recoveries from third parties, and discounted, where possible, to reflect the time value of money.

PSAB has issued a new standard with respect to the recognition and measurement of liabilities related to contaminated sites, effective for year ends commencing on April 1, 2014. The impact of changes between this new standard and the Province’s current policy has not been reflected in these statements.

(vi) Non-Financial Assets

(1) Recognition and measurement

In the public sector, recognition and measurement of tangible capital and other non-financial assets are based on their future service potential. Generally, such assets do not generate future net cash inflows. Therefore, these assets will not provide resources to discharge the liabilities of the Government. For non-financial assets, the future economic benefit consists of their capacity to render service to fulfill the Government’s objectives.

(2) Inventories

Inventories held for resale are classified as non-financial assets if it is anticipated that the sale will not be completed within one year of the reporting date. Inventories held for use are classified as non-financial assets.

(3) Prepaid expenses

Prepaid expenses are payments for goods or services which will provide economic benefits in future periods. The prepaid amount is recognized as an expense in the year the goods or services are used or consumed.

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PROVINCE OF MANITOBA
PUBLIC ACCOUNTS 2009/10

(4) Tangible capital assets

The cost of tangible capital assets purchased includes the purchase price as well as costs such as installation costs, design and engineering fees, survey and site preparation costs and other costs incurred to put the asset into service. The cost of tangible capital assets constructed by the Government includes all direct construction costs such as materials, labour, design, installation, engineering, architectural fees, and survey and site preparation costs, as well as overhead costs directly attributable to the construction activity such as licenses, inspection fees, indirect labour costs, and amortization expense of any equipment which was used in the construction project. Any carrying cost associated with the development and construction of tangible capital assets is included for projects whose cost exceeds $20 million.

Certain assets, which have historical or cultural value, including works of art, historical documents as well as historical and cultural artifacts are not recognized as tangible capital assets because a reasonable estimate of the future benefits associated with such property cannot be made.

Intangible assets and items inherited by right of the Crown, such as Crown lands, forests, water and other mineral resources are not recognized in Government financial statements.

Tangible capital assets are amortized on a straight-line basis over their estimated useful lives as follows:

General Tangible Assets:
Land	Indefinite
Buildings and Leasehold Improvements
Buildings		10 to 60 years
Leasehold improvements	Life of lease
Vehicles and Equipment
Vehicles	5 years
Aircraft and vessels		5 to 24 years
Machinery, equipment and furniture		3 to 20 years
Maintenance and road construction equipment	15 years
Computer hardware, software licences		4 to 15 years
Infrastructure Assets:
Land	Indefinite
Land Improvements	30 years
Transportation
Bridges and Structures	40 years
Provincial Highways, Roads and Airstrips		10 to 40 years
Dams and Water Management Structures	40 years

	One-half of the annual amortization is charged in the year of acquisition and in the year of disposal. Assets under construction are not amortized until the asset is put into service.
(vii)	Classification by Sector
	The Province reports operational results under the following sectors; health and healthy living, education, family services and consumer affairs, community economic and resource development, justice and other expenditures and general government. The entities and departments included in each sector are identified in Schedule 8 to the summary financial statements.
	The health and healthy living sector includes provincial health care programs and includes all health related entities and services.
	The education sector includes all education services including elementary secondary and post-secondary services, including the pension related expenses associated with this sector.

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PROVINCE OF MANITOBA
PUBLIC ACCOUNTS 2009/10

The family services and consumer affairs sector includes all social services related to employment and income support for individuals in need as well as a comprehensive range of social services and financial assistance programs provided to Manitobans throughout the Province.

The community economic and resource development sector includes the promotion and development of the Province’s natural resources including the support of industries within this sector. It also includes the operation and maintenance of transportation systems including highway infrastructure and other Government infrastructure. The sector also contains the management and administration of housing policies and benefits for low to moderate income renters and homeowners.

The justice and other expenditures sector include general administration, finance, executive and legislature, cultural and sport related activities. The sector contains criminal and civil legal services and programs that protect the rights of Manitobans. Also included in the sector are all general government pension related expenses.

The general government sector is comprised of those activities that cannot to be allocated to the specific sectors noted above.

Inter-segment transfers between sectors are measured at the exchange amount.

E.	Measurement Uncertainty
	Estimates are used to accrue revenues and expenses in circumstances where the actual accrued revenues and expenses are unknown at the time the financial statements are prepared. Uncertainty in the determination of the amount at which an item is recognized in the financial statements is known as measurement uncertainty. Such uncertainty exists when there is a variance between the recognized amount and another reasonable amount, as there is whenever estimates are used.
	Measurement uncertainty in these financial statements exists in the accrual of individual and corporate income taxes, Canada Health Transfer and Canada Social Transfer entitlements, accruals for pension obligations, accruals for environmental obligations, allowances for doubtful loans and advances and provision for losses on guarantees.
	The nature of the uncertainty related to the accrual of health and social transfer payments from the Federal Government and individual and corporate income taxes arises because of the possible differences between the estimates for the economic factors used in calculating the accruals and actual economic results. The uncertainty related to accruals for pension obligations arises because actual results may differ significantly from the Government’s best estimates of expected results based on variables such as earnings on the pension investments, salary increases and the life expectancy of claimants. The uncertainty related to the accrual of environmental obligations is based upon the identification of all sites where environmental damages have occurred that are the Government’s responsibility to mitigate and the quantification of what the actual liability will be based upon impact studies. Uncertainty concerning the allowance for doubtful loans and advances is based upon actual collectibility and changes in economic conditions.
	While management’s best estimates have been used for reporting items subject to measurement uncertainty, it is possible that changes in future conditions in the near term could require a material change in the valuation of the reported amounts. Near term is defined as a period of time not to exceed one year from the date of the financial statements.

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PROVINCE OF MANITOBA
PUBLIC ACCOUNTS 2009/10

2. TEMPORARY INVESTMENTS

	($ millions)
	2010		2009
Temporary investments		553		734

	Temporary investments are recorded at cost, which approximates market value. Temporary investments consist of investments with financial institutions, government bonds and other short term investment vehicles. All of the securities have terms to maturity of less than one year.
3.	PORTFOLIO INVESTMENTS

	($ millions)
	2010		2009
Sinking funds		1,917		2,107
Other investments		596		624
Unamortized termination losses on derivative contracts		51		57
		2,564		2,788

Portfolio investments are recorded using the cost method. Under this method any discount or premium arising on the purchase of a fixed term security is amortized over the period to maturity. Portfolio investments are written down to market value only in those circumstances where the loss in value is other than temporary in nature. As at March 31, 2010, the market value of portfolio investments was $2,554 million (2009 — $2,750 million). Portfolio investments earned $91 million during the year (2009 — $137 million).

Sinking Funds

Section 60 of The Financial Administration Act authorizes the Minister of Finance to provide for the creation and management of sinking funds for the orderly retirement of debt. The Government’s sinking fund currently provides for the repurchase of foreign debt and the pre-funding of maturing debt issues. The sinking fund is invested principally in securities issued or guaranteed by federal and provincial governments. Sinking funds are invested in fixed income securities as follows:

	($ millions)
	2010				2009
	Book		Fair		Book		Fair
	Value		Value		Value		Value
Government of Canada, direct and guaranteed		300		303		233		245
Provincial, direct and guaranteed		1,400		1,416		1,584		1,602
Municipal		174		183		202		212
Corporate		43		52		88		84
		1,917		1,954		2,107		2,143

Investment revenue earned on sinking funds during the year was $71 million (2009 — $117 million).

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PROVINCE OF MANITOBA
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The sinking funds are allocated as follows:

	($ millions)
	2010			2009
Core Government		2,082			2,320
Crown Organizations		15			15
Total sinking funds		2,097			2,335
Less: Uninvested portion of sinking funds held in cash and cash equivalents		(180	)		(228	)
Total sinking funds held in portfolio investments		1,917			2,107

Other Investments

	($ millions)
	2010		2009
Guaranteed investment certificates		5		3
Bonds — Government of Canada, provincial and municipal		291		266
Bonds — Corporate		183		233
Equity Investments		89		92
Limited partnership investments		7		9
Investments in real estate		21		21
		596		624

As at March 31, 2010, the market value of other investments was $600 million (2009 — $607 million). Other investments earned $20 million during the year (2009 — $20 million).

4.	EQUITY IN GOVERNMENT BUSINESS ENTERPRISES
	The GBEs that are included in the summary financial statements are listed in Schedule 8 and are classified as follows:

Category	Definition
Utility	An enterprise which provides public utility services for a fee.
Insurance	An enterprise which provides insurance coverage services to the public for a fee.
Finance	Enterprises which provide regulatory control and are revenue generating or enterprises which use economy of scale to deliver goods and services to the public.

The operating results and financial position of each GBE category are reported in Schedule 3.

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Included in the equity in GBEs are equities, which are restricted for use by provincial legislation and thereby not available to discharge Government liabilities or to finance other Government programs. The equity in GBEs is comprised of:

	($ millions)
	2010		2009
Restricted Equity in Government Business Enterprises:
Manitoba Hydro-Electric Board		2,524		1,907
Manitoba Public Insurance Corporation		389		144
Workers Compensation Board		141		62
		3,054		2,113
Unrestricted Equity in Government Business Enterprises:
Manitoba Lotteries Corporation		5		5
Manitoba Public Insurance Corporation		9		9
		14		14
Equity in Government Business Enterprises		3,068		2,127

5.	PENSION PLANS
	The Government participates in various pension plans. The two primary plans, in which the Government directly participates, are the Civil Service Superannuation Plan, and the Teachers’ Pension Plan. As per the Acts that administer these plans, the Government is responsible for 50% of pension benefits earned by employees. The Government’s pension liability reflects its share of the actuarial present values of pension benefits attributed to services rendered by employees and former employees, net of any plan assets which are set aside by the Government in an irrevocable trust. As of March 31, 2010, the pension liability for the Civil Service Superannuation Plan was $916 million (2009 — $1,185 million) and the pension liability for the Teachers’ Pension Plan was $807 million (2009 — $725 million).
	Other pension plans in which the Government participates include the Members of the Legislative Assembly Plan, the Legislative Assembly Pension Plan, the Judges’ Supplemental Pension Plan and the Winnipeg Child and Family Services Employee Benefits Retirement Plan. The Government is responsible for any excess of accrued pension benefits over pension fund assets for these plans.
	The Government also includes several other pension plans in its pension liability. These other plans include post-secondary education pension plans and public school divisions’ pension plans. Post-secondary education pension plans include the University of Manitoba Pension Plans, the University of Winnipeg Pension Plan and the Brandon University Retirement Plan. Public school divisions’ pension plans include the Winnipeg School Division Pension Fund for Employees Other Than Teachers, Retirement Plan for Non-Teaching Employees of the St. James-Assiniboia School Division and Retirement Plan for Employees of Frontier School Division.
	Employees in the health sector are members of the Health Care Employees Pension Plan, a multi-employer defined benefit pension plan established between employees and participating boards. Because the Government does not sponsor this plan, the accrued benefit liability of this plan is not recognized in these financial statements. The annual net benefit plan expense is the amount of required contributions provided for employees’ services rendered during the year. During the year, the Government expensed contributions to this plan of $106 million (2009 — $101 million).
	As at March 31, 2010, the total pension liability being reflected in the summary financial statements was $1,800 million (2009 — $1,991 million). Details related to the pension liability are provided in Schedule 6. The following provides general information on the contributions and benefit formulae of the various pension plans, which are included in this schedule.

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A.	Civil Service Superannuation Plan
	The Civil Service Superannuation Act (CSSA) established a defined benefit plan to provide benefits to employees of the Manitoba Civil Service and to participating agencies of the Government through the Civil Service Superannuation Fund (CSSF).
	The lifetime pension calculation equals 2% of a member’s best five-year average yearly pensionable earnings multiplied by pensionable service, minus 0.4% of the average Canada Pension Plan (CPP) earnings multiplied by pensionable service since January 1, 1966.
	The CSSA requires employees to contribute 6.0% of pensionable earnings up to the CPP maximum pensionable earnings, and 7.0% on pensionable earnings above the maximum. 89.8% of employee contributions are used to fund basic benefits and 10.2% of employee contributions are allocated to funding indexing benefits. The Government funds 50% of the monthly pension retirement benefits paid to retirees. Indexing benefits are not guaranteed and are paid only to the extent that the indexing adjustment account in CSSF can finance one-half of the cost-of-living increases granted. The maximum annual adjustment is limited by legislation to two-thirds of the increase in the Consumer Price Index for Canada.
B.	Teachers’ Pension Plan
	The Teachers’ Pensions Act (TPA) established a defined benefit plan to provide pension benefits to teachers who have taught in public schools in Manitoba.
	The lifetime pension calculation is generally based upon 2% of a member’s average salary of the best five of the final 12 years of service (best seven prior to July 1, 1980) multiplied by pensionable service, minus the years of service multiplied by 0.6% of the annual salary up to the yearly maximum pensionable earnings. The pension amount is subject to a maximum of 70% of the average annual salary used above.
	The TPA requires that teachers contribute 6.8% of pensionable earnings up to the CPP maximum earnings, and 8.4% of pensionable earnings above the maximum. 83.4% of teacher’s contributions are used to fund basic benefits and 16.6% of teachers contributions are allocated for funding indexing benefits. The Government funds 50% of the monthly pension retirement benefits paid to retirees.
	Indexing benefits are not guaranteed and are paid only to the extent that the indexing adjustment account in Teachers’ Retirement Allowances Fund can finance one half of the cost-of-living increases granted. The maximum annual adjustment is limited by legislation to two-thirds of the increase in the Consumer Price Index for Canada.
C.	Other Government Plans

(i) Members of the Legislative Assembly Plan

The pension plan for Members of the Legislative Assembly (MLAs) is established and governed by The Legislative Assembly Act (LAA).

For MLAs elected prior to the dissolution of the Assembly of the 35th Legislature, the LAA provides for defined pension benefits based on years of service to April 1995. The calculation for defined pension benefits is equal to 3% of the average annual indemnities for the last five years served as a member or all the years served; if less than five, multiplied by the number of years of pensionable service up to April 1995. These entitlements are fully indexed to cost of living increases.

For those MLA’s elected after the 35th Legislature in April 1995, the LAA provides for matching contributions. Under the matching contributions provisions, MLAs may contribute up to 7% of their remuneration toward a Registered Retirement Savings Plan (RRSP) of their choice. The Government matches the member’s contributions on a current basis; consequently, there is no liability for past service benefits under this component of the plan. In the event that a member withdraws money from the RRSP, while an active member of the Legislative Assembly, the Government’s contribution would be refundable back to the Government.

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(ii) Legislative Assembly Pension Plan

The Members’ Retirement Benefits Regulation of The Legislative Assembly Act established a defined benefit plan, effective April 1, 2004 that provides pension benefits to eligible MLAs who elect to participate in the plan.

The pension benefits accumulate up to a maximum period of 35 years at 2% per year of pensionable service based upon the average of the best five-year annual salaries, reduced by an amount equal to 0.25% times the number of months before the member’s 60^th birthday that the first pension payment is made. These entitlements are indexed to 2/3 of cost of living increases.

Active members must contribute 7% of their earned salary to the plan. The Government makes contributions as necessary to ensure the pension fund has sufficient assets to cover the monthly pension payments to retirees as well as ensuring there are sufficient funds to cover any of the plans liabilities. Any surplus of plan assets over the pension obligation can be used by the Government to reduce future contributions.

(iii) Judges’ Supplemental Pension Plan

Manitoba Provincial Court Judges and Masters are members of the Civil Service Superannuation Plan; however, they also receive enhanced pension benefits under the Manitoba Provincial Court Judges and Masters’ Supplemental Pension Plan. These supplemental pension benefits for judges are the difference between the total pension benefits for judges, including the amendments introduced by Judicial Compensation Committees, and the formula pension available under The Civil Service Superannuation Act (CSSA) as described above in Note 5A.

The supplemental pension is generally based upon an accrual rate of 3% for each year of service, as a judge, up to a maximum of 23.5 years, reduced by the pension provided under the CSSA. The combined total of the Judges’ Supplemental Pension and Civil Service Superannuation Pension is subject to a maximum of 70% of earnings. These enhanced benefits are entirely funded by the Government.

(iv) Winnipeg Child and Family Services Employee Benefits Retirement Plan

	Established effective December 29, 2003, the Winnipeg Child and Family Services Employee Benefits Retirement Plan (WCFSP) applies to employees of the former Winnipeg Child and Family Services Agency, who transferred to the Department of Family Services and Consumer Affairs.
	The lifetime pension calculation equals 2% of the member’s highest average pensionable earnings in any three non-overlapping periods of 12 consecutive months, less 0.6% of the average CPP earnings for the same period multiplied by years of pensionable service. Indexing payments are subject to approval by the Trustees, subject to increases in the Consumer Price Index.
	Members are required to contribute 4.5% of pensionable earnings up to the CPP maximum and 6% on pensionable earnings over the maximum. Any surplus of plan assets over the pension obligation can be used by the Government to reduce future contributions.
D.	Other Pension Plans

(a) Post-Secondary

(i) University of Manitoba Pension Plan

The University of Manitoba administers The University of Manitoba Pension Plan (1970), The University of Manitoba Pension Plan (1993), and The University of Manitoba GFT Pension Plan (1986). These are trusteed pension plans. The Trustees are responsible for the custody of the plans’ assets and issuance of annual financial statements.

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University of Manitoba Pension Plan (1993) is a money purchase plan with a defined benefit minimum. The funding for the plan requires a matching contribution from the University and the employees. The plan is not indexed.

The University of Manitoba Pension Plan (1970) operates as a defined contribution or money purchase arrangement for service since 2003. Certain members retain an entitlement to a hybrid formula for the service prior to 2003, similar to the 1993 Plan.

The University of Manitoba GFT Pension Plan (1986) is a defined contribution pension plan; therefore there is no requirement for an actuarial valuation of this plan.

(ii) University of Winnipeg Pension Plan

The University of Winnipeg administers the University of Winnipeg Pension Plan (UWPP), which is comprised of a defined benefit segment and a defined contribution segment. The assets of the Plan are held in trust by independent custodians.

The UWPP was established as a contributory defined benefit pension plan at September 1, 1972 and covers all eligible employees of the University, except those who are members of the United Church of Canada Pension Plan. The funding for the plan requires a matching contribution from the University and the employees.

Since December 31, 2000, when the defined contribution segment of the Plan was introduced, approximately one-quarter of the eligible members converted to that plan. The obligation for pension benefits under the defined contribution segment of the Plan will always be equal to net assets in each member’s account. Therefore, no surplus or deficiency arises from fluctuations in the investment market.

(iii) Brandon University Retirement Plan

Brandon University administers the Brandon University Retirement Plan, which is a trusteed pension plan. The Trustees are responsible for the custody of the Plan’s assets and issuance of annual financial statements.

The Brandon University Retirement Plan is a final average contributory defined benefit pension plan established April 1, 1974 for the benefit of the employees of Brandon University. The funding for the plan requires a matching contribution from the University and the employees.

(b) Public School Divisions

(i) The Winnipeg School Division Pension Fund for Employees Other Than Teachers

The Winnipeg School Division Pension Fund for Employees Other Than Teachers is a defined benefit pension plan for employees that meet specified employment conditions. The fund was created by By-law 196 of the Winnipeg School Division (replaced by By-law 1017 on January 1, 1992) and is subject to the applicable regulations.

The pension calculation is based on an amount equal to 1.6% of a member’s average pensionable salary and 2.0% of a member’s average salary over the pensionable salary, multiplied by a member’s years of pensionable service. The average salary is determined by averaging the best five years of employment salary in the last twelve years of service.

Employee contributions equal 6.5% of pensionable salary and 7.8% of the earnings in excess of pensionable salary up to the yearly maximum pensionable earnings, effective January 1, 2008. The percentages changed to 7.0% and 8.2% respectively, effective January 1, 2009. The Winnipeg School Division matches employee contributions and pays an additional 27.4% of employee contributions less the amount needed to finance the Disability Income Plan benefits (approximately

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PROVINCE OF MANITOBA
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10%). As a result, employer contributions equal approximately 117.4% of employee contributions.

(ii) Retirement Plan for Non-Teaching Employees of the St. James-Assiniboia School Division

The St. James-Assiniboia School Division Retirement Plan for Non-teaching Employees is a defined benefit pension plan that was established on January 1, 1978 and is subject to the applicable regulations.

The pension calculation is based on an amount equal to 1.4% of a member’s average employment earnings below CPP earnings and 2.0% of a member’s employment earnings in excess of the CPP earnings, multiplied by a member’s years of contributory service. The average employment earnings are determined by averaging the best six years of employment earnings in the last 12 years of service.

Employee contributions equal 5.7% of CPP earnings and 7.3% of the employment earnings in excess of CPP earnings. The St. James-Assiniboia School Division matches employee contributions.

(iii) Retirement Plan for Employees of Frontier School Division

The Frontier School Division Retirement Plan is a defined benefit pension plan for non-teaching employees.

The pension benefit is based on an amount equal to 2.0% of a member’s best average earnings, multiplied by a member’s years of credited service. The average employment earnings are determined by averaging the best five years of employment earnings in the last ten years of service.

Employee contributions equal 6.0% of CPP earnings, with the Frontier School Division matching employee contributions. The Frontier School Division is responsible for the balance of the pension cost, of which a portion can be financed by an allocation from pension surplus.

E.	Government Business Enterprises
	Manitoba Hydro-Electric Board, Manitoba Liquor Control Commission, Manitoba Public Insurance Corporation and Manitoba Lotteries Corporation are members of the CSSF. The net pension liabilities for these GBEs are disclosed in Schedule 3.

6. CONTINGENCIES

A. Contingent Liabilities

i) Legal Actions

The Government has been named in various legal actions. No provision has been made at March 31, 2010 in the accounts where the final results are uncertain.

ii) Northern Development Projects

The Government is contingently liable for legal claims associated with past Manitoba Hydro-Electric Board (Hydro) related northern development projects. The outcome of these claims is not determinable at this time.

Hydro is party to an agreement dated December 16, 1977, with Canada, the Province of Manitoba and the Northern Flood Committee Inc., representing the five First Nations in the communities of Cross Lake, Nelson House, Norway House, Split Lake and York Landing. This agreement, in part, provides for compensation and remedial measures necessary to ameliorate the impacts of the Churchill River diversion and the Lake Winnipeg Regulation projects. Comprehensive settlements have been reached with all communities except Cross Lake.

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PROVINCE OF MANITOBA
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In recognition of all anticipated payments, Hydro has recorded a total liability of $129 million (2009 — $120 million). Reassessments of these liabilities will be made as settlements are achieved. There are other mitigation issues, the outcomes of which are not determinable at this time.

iii) Canadian Blood Services

The majority of provincial and territorial governments of Canada, including Manitoba, are members of, and provide funding to, Canadian Blood Services, which operates the Canadian blood system. The March 31, 2010 audited financial statements of Canadian Blood Services indicate that a wholly owned subsidiary, CBS Insurance Company Limited, provides for the contingent liabilities for risks related to operations of the blood system. The actuarially determined provisions for future insurance claims, reported and unreported, related to insured events that occurred prior to March 31, 2010 is $249 million (2009 — $232 million). The related assets as at March 31, 2010 total $308 million (2009 — $273 million). The subsidiary also had a re-insurance contract for additional coverage of $750 million.

Based upon the above, the Government’s share of the provision for future claims as at March 31, 2010 is offset with designated assets, which at that point exceed the provision. In addition, there is re-insurance to cover an additional $750 million in claims of insured events occurring on or before March 31, 2010. The Government is not aware of any proceedings that could lead to a claim against it given the existing arrangement in place.

iv) Treaty Land Entitlement Obligations

To meet the Government’s obligation under treaty land entitlement agreements, approximately 486,889 acres of provincial Crown lands have been transferred to the Federal Government for First Nations. The Government’s obligations under the treaty land entitlement agreements require the setting aside of 1,423,110 acres of Crown lands. To date, 958,397 acres have been selected by the Entitlement First Nations. The Crown lands will be transferred according to the Natural Resources Transfer Agreement, and the transfer will include mines and minerals and other interests normally reserved for the Government, under The Crown Land Act or any other statute.

v) Environmental Issues

	The Manitoba Hydro-Electric Board will incur future costs associated with the assessment and remediation of contaminated lands and for the phase-out and destruction of polychlorinated biphenyl contaminated mineral oil from electrical equipment. A reasonable estimate of the associated costs cannot be made at this time.
B.	Loan Guarantees

The Government has guaranteed the repayment of debt, promissory notes, bank loans, lines of credit, mortgages and securities held by others. Debt guaranteed by the Government is guaranteed, as to principal and interest, until the debt is matured or redeemed. The authorized limits and the outstanding guarantees are summarized as follows:

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PROVINCE OF MANITOBA
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	Authorized		($ millions)
	Limit		2010		2009
Manitoba Business Start Program		5		2		2
Manitoba Agricultural Services Corporation (Note 6B.a)		—		77		80
Manitoba Student Aid Program (Note 6B.b)		20		2		5
Manitoba Housing and Renewal Corporation (Note 6B.c)		—		5		5
Rural Entrepreneur Assistance Program (Note 6B.d)		13		11		10
Rural Municipality of Richot		1		1		11
				98		103
Manitoba Grow Bonds		—		4		4
Total guarantees outstanding				102		107

A provision for future losses on guarantees in the amount of $21 million (2009 — $21 million) has been recorded in the accounts. The provisions for losses on guaranteed loans are determined by a review of individual guarantees. The provision represents the best estimate of probable claims against the guarantees. Where circumstances indicate the likelihood of claims arising, provisions are established for those loan guarantees.

Manitoba HydroBonds Guarantees

Outstanding Manitoba HydroBonds as at March 31, 2010 totalled $331 million (2009 — $398 million). The bonds carry fixed and variable coupon rates that range from 1.50% to 4.65%. Manitoba HydroBonds are redeemable at the option of the holder. The Government guarantees $251 million (2009 — $322 million) of these outstanding bonds.

Note 6B.a) Manitoba Agricultural Services Corporation

The Manitoba Agricultural Services Corporation has guaranteed loans under the following programs:

Program	General Terms and Conditions
Operating Credit Guarantee	Each participating lending institution is guaranteed 25% of the respective value of loans made under this program.
Manitoba Livestock Associations Loan Guarantees	Each association is guaranteed 25% of the loan to a maximum guarantee of $1 million.
Diversification Loan Guarantee Program	Each participating lender is guaranteed 25% of the loan made for the diversification or farm value-added activities, to a maximum individual guaranteed loan allowable of $3 million.
Enhanced Diversification Loan Guarantee Program	Eliminated lender pooling of guarantees and the maximum of $3 million for qualifying loans.

Note 6B.b) Manitoba Student Aid Program

The Government guarantees three types of student loans, issued in the past 17 years, as follows:

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PROVINCE OF MANITOBA
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Loan type	Nature of loan
Guaranteed loans	Issued by the Canadian Imperial Bank of Commerce (CIBC) from April 1, 1993 to December 31, 1994. These loans are fully guaranteed, if the loan is deemed to be in default.
Limited risk loans	Issued by the CIBC from January 2, 1995 to December 31, 1997 and issued by the Royal Bank from June 2, 1997 to July 31, 2000. The Government only guarantees those loans in default that have been issued to credit abusers, insolvent creditors and minors.
Non-risk loans	Issued by the Royal Bank from August 1, 2000 to July 31, 2001. The Government has agreed to guarantee and purchase any loan deemed to be in default.

Note 6B.c) Manitoba Housing and Renewal Corporation

The Government has guaranteed the repayment of mortgages and has issued letters of credit which guarantee the terms and conditions of land development agreements and construction contracts.

Note 6B.d) Rural Entrepreneur Assistance Program

The Government provides guarantees on new and expanding small or home business loans, with a five-year term.

7.	CONTRACTUAL OBLIGATIONS
	The Government has entered into a number of contracts and agreements for the delivery of services and the acquisition or construction of assets. The following represents the amounts required to satisfy the contractual obligations as at March 31:

	($ millions)
	2010						2009
	Government
	Business
	Enterprises		* Others		Total		Total
Operating obligations:
Total rental of tangible capital assets		69		238		307		312
Approved loans, grants and contracts for service		—		145		145		117
		69		383		452		429
Capital obligations:
Tangible capital assets and infrastructure:
- long-term financing arrangements		826		222		1,048		1,059
- approved contracts in capital budget		—		129		129		81
- Red River Floodway expansion		—		53		53		46
		826		404		1,230		1,186
Total		895		787		1,682		1,615

* Government departments, Crowns and Special Funds

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PROVINCE OF MANITOBA
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	Manitoba Hydro-Electric Board (Hydro) purchased the net assets of Winnipeg Hydro from the City of Winnipeg in 2002. Winnipeg Hydro was an electric utility with 94,000 customers and annual revenues of $125 million. The purchase consideration principally consisted of annual payments by Hydro to the City of Winnipeg of $25 million in years 2002 to 2006, $20 million per annum in years 2007 to 2011, and $16 million per annum in year 2012 and each year thereafter. The net assets and related financing obligations are reflected in Hydro’s financial statements.
	Manitoba Hydro has energy purchase commitments of $1,626 million (2009 — $603 million) that relate to future purchases of wind, natural gas (including transportation and storage contracts), coal and electricity. Commitments are primarily for wind, which expire in 2037, and natural gas purchases, which expire in 2013.
8.	DEBT SERVICING
	Debt servicing costs of $756 million (2009 — $830 million) are net of interest recoveries from GBEs of $477 million (2009 — $465 million) and include $58 million (2009 — $45 million) representing interest expense of Crown organizations. GBEs debt servicing costs of $421 million (2009 — $450 million) are reported in Schedule 3.
9.	ADJUSTMENTS TO ACCUMULATED DEFICIT
	In the March 31, 2010 fiscal year, restatements of the March 31, 2009 accumulated deficit and net income for the year were made in compliance with the Government’s accounting policies or for the correction of errors.

A.	Adoption of accounting policy changes by government business enterprises
	Effective April 1, 2009 Manitoba Hydro-Electric Board and Manitoba Public Insurance Corporation adopted CICA Handbook Section 3064, Goodwill and Intangible Assets which revised standards for the recognition, measurement, presentation and disclosure of goodwill and intangible assets. In addition, during the 2010 fiscal year, Manitoba Hydro-Electric Board adopted a change in accounting policy for dual currency bonds which have principal amounts repayable in Canadian currency and interest payments denominated in U.S. currency. The retroactive adoption of these standards resulted in a decrease in the opening equity in government business enterprises of $62 million (2009 — $18 million) a corresponding increase in opening accumulated deficit and net debt of $62 million (2009 — $18 million). The retroactive application of the adoption of these accounting policies also resulted in a reduction of 2009 net income of $44 million.
B.	Presentation of deferred capital grants
	An adjustment was made to correct the recognition of deferred grant revenue related to capital grants received by Crown entities from the Province of Manitoba. These grants should have been eliminated upon consolidation in the year issued. This has resulted in a decrease in the opening accumulated deficit and net debt of $58 million (2009 — $55 million) and an increase of 2009 net income of $3 million.
	The Government changed their accounting policy related to the recognition of capital grant revenue from non-governmental sources to recognize the grants as revenue in the year received, consistent with the accounting for capital grants from governmental sources. This has resulted in a decrease in the opening accumulated deficit and net debt of $18 million (2009 — $10 million) and an increase of 2009 net income of $8 million.
C.	Correction of pension liability
	During the year, it was noted that pension assets held in a trust account with the Civil Service Superannuation Fund had inadvertently been recorded as a reduction of the accrued benefit obligation. These assets should have been reported as pension assets and accounted for in accordance with the Province’s other plan assets. Because the presentation on pension assets was only adopted in 2009, the correction has been restated only to that year. This has resulted in a decrease in the opening accumulated deficit and net debt of $12 million (2009 — $0 million) and an increase in the 2009 net income of $12 million.

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PROVINCE OF MANITOBA
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D.	Other
	The Government identified and corrected errors relating to the recognition of fair market value changes in derivatives held by a Crown organization that were previously reported in the summary financial statements. This has resulted in a decrease in the opening accumulated deficit and net debt of $5 million (2009 — $2 million) and an increase of 2009 net income of $3 million.
	During the year, two entities, previously considered controlled by the Government were reassessed as not controlled and removed from the GRE. This change resulted in a $3 million increase (2009 — $2 million) to the opening accumulated deficit and an increase net debt of $1 million (2009 — $0 million) and a decrease of 2009 net income of $1 million.
	The net effect of these adjustments is a $2 million decrease in the opening accumulated deficit (2009 — $0 million increase), a decrease of opening net debt of $4 million (2009 — $2 million) and a $2 million reduction of 2009 net income.

	As a result of the above noted changes, the opening net debt has decreased by $30 million (2009 — $49 million) from the previously reported balances of $11,498 million (2009 — $10,599 million).
10.	AMOUNTS DUE TO THE GOVERNMENT OF CANADA
	The March 31, 2003 financial statements disclosed that the net impact of the federal settlement related to the Federal accounting error for the period of 1997 to 1999 was a $91 million loan payable owing to the Government over a ten-year period commencing in 2004/05. As at March 31, 2010, this loan payable has been reduced to $36 million (2009 — $45 million).
	To offset negative adjustments to the 2004 Equalization payments, the Government of Canada provided to the Government a loan payable of $38 million repayable over a ten-year period commencing in April 2006. As at March 31, 2010 this loan payable had been reduced to $23 million (2009 — $27 million). Similarly, to offset negative adjustments to the 2004 Canada Health and Social Transfer (CHST) entitlements, the Government of Canada provided to the Government a loan payable of $9 million repayable over a ten-year period commencing in April 2006. As at March 31, 2010 this loan payable had been reduced to $5 million (2009 — $6 million). These loans are non-interest bearing.
	Through the Manitoba Opportunities Fund Ltd., the Government holds and invests deposits made through the Federal Department of Citizenship and Immigration, Canada’s Immigrant Investor Program. As at March 31, 2010, the Government has loans payable of $235 million (2009 — $212 million) to be repaid to the Government of Canada five years after receipt. The Government is charged an administrative fee for each loan.
11.	AMOUNTS HELD IN TRUST
	Amounts held in trust are assets over which the Legislature has no power of appropriation. The amounts are not included in the summary financial statements because the Government has no equity in the amounts and administers them according to trust or other agreed-upon arrangements. As at March 31, 2010, amounts held in trust were as follows:

	($ millions)
	2010		2009
Fiduciary Trusts		541		501
Custodial Trusts		117		189
		658		690

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PROVINCE OF MANITOBA
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	Fiduciary Trusts
	The Government holds certain interest bearing deposits as fiduciary trusts. These deposits are pooled with the Government’s investments in order to earn a market rate of interest.
	Custodial Trusts
	The Government holds custodial trust funds in the form of bonds and other securities as well as title to tangible capital assets.
12.	RISK MANAGEMENT AND THE USE OF DERIVATIVE FINANCIAL INSTRUMENTS
	Borrowings in both Canadian and foreign financial markets result in exposure to risks, which include foreign exchange risk, interest rate risk, credit risk and liquidity risk.
	The Government employs various risk management strategies and operates within fixed risk exposure limits to ensure exposure to risk is managed in a prudent and cost effective manner. A variety of strategies are used, including the use of derivative financial instruments (derivatives).
	Derivatives are financial contracts, the value of which is derived from underlying instruments. The Government uses derivatives to hedge and to mitigate foreign exchange risk and interest rate risk. The Government does not use derivatives for speculative purposes.
	Foreign exchange risk
	Foreign exchange risk is the risk that the cash flows needed to repay the interest and principal on loans in foreign currencies will vary due to fluctuations in foreign exchange rates.
	To manage this risk, the Government uses derivative contracts, including foreign exchange forward contracts as well as swaps, to convert foreign currency principal and interest cash flows into Canadian dollar denominated cash flows. The current portfolio of foreign debt is fully hedged through the use of derivatives and U.S. dollar sinking funds, except for the impact of the unamortized foreign exchange fluctuation account of $56 million (2009 — $61 million). This account is fixed with no sensitivity to future foreign exchange rates.
	Derivative contracts hedge the underlying debt by matching the critical terms to achieve effectiveness. The current policy has hedged the foreign currency debt principal and interest payments through the use of derivatives in relation to general purpose debt.
	Manitoba Hydro-Electric Board (Hydro) has exposure to U.S. dollar foreign exchange fluctuations primarily through the sale and purchase of electricity and fuel in the U.S. This exposure is managed through a long-term natural hedge between U.S. dollar cash inflows from export revenues and U.S. dollar cash outflows for long-term debt coupon and principal payments and thermal fuel purchases. For its U.S. debt retirement purposes, Hydro has a hedging relationship between U.S. dollar long-term debt balances and U.S. sinking funds. As a means to bridge temporary timing differences between inflows and outflows to future years’ U.S. dollar requirements, Hydro also utilizes derivative foreign exchange forward contracts as required.
	Interest rate risk
	Interest rate risk is the risk that debt servicing costs will vary unfavourably according to interest rate fluctuations.
	To reduce its exposure to interest rate risk, the Government uses derivatives to manage the fixed and floating interest rate mix of its debt portfolio.

96

PROVINCE OF MANITOBA
PUBLIC ACCOUNTS 2009/10

After taking into account derivatives used to manage interest rate risk, investments held as sinking funds and eliminating debt incurred on behalf of Manitoba Hydro-Electric Board, the structure of the debt as at March 31, 2010 was 90% at fixed rates and 10% at floating rates (2009 — 91% at fixed rates and 9% at floating rates). A one percent (100 basis points) movement in interest rates for an entire year would increase/decrease debt servicing costs, net of recoveries, by $16 million (2009 — $14 million).

Credit risk

Credit risk is the risk that a counterparty will default on its contractual obligations.

The Government manages its credit risk exposure from derivatives by, among other activities, dealing only with high credit quality counterparties and regularly monitoring compliance to credit limits. In addition, the Government enters into contractual agreements (“master agreements”) with all of its counterparties. As at March 31, 2010, the Government has a gross credit risk exposure related to derivatives of $88.5 million (2009 — $62.4 million).

Liquidity risk

Liquidity risk is the risk that the Government will not be able to meet its financial commitments over the short term.

To reduce liquidity risk, the Government maintains liquid reserves (i.e. cash and cash equivalents) at levels that will meet future cash requirements and will give the Government flexibility in the timing of issuing debt. In addition, the Government has short-term note programs, bank lines and sinking funds as alternative sources of liquidity. This risk is also managed by distributing debt maturities over many years.

Derivative portfolio

The following table presents the fair value of derivative financial instruments with contractual or notional principal amounts outstanding at March 31:

	($ millions)
	2010					2009
	Notional		Fair			Notional		Fair
	Value		Value			Value		Value
Interest rate and cross currency swaps		29,500		( 678	)		30,300		( 1,095	)

	Notional amounts of derivatives contracts represent the contractual amounts to which a rate or price applied for computing the cash flows to be exchanged. The notional amounts are used to determine the gains/losses and fair value of the contracts and are generally a measure of the exposure to the asset class to which the contract relates. They are not recorded as assets or liabilities on the statement of financial position. Notional amounts do not represent the potential gain or loss associated with the market risk or credit risk associated with the derivative contract.
	Fair values of the swap agreements are the estimated amount that the Government would receive or pay, based on market factors, if the agreements were terminated on March 31. They are established by discounting the expected cash flows of the swap agreements using year-end market interest and exchange rates. A positive (negative) fair value indicates that the government would receive (make) a payment if the agreements were terminated.
13.	SIGNIFICANT TRANSACTIONS WITH GOVERNMENT BUSINESS ENTERPRISES
	Transactions with GBEs are not eliminated for purposes of summary reporting because they are reported in these summary financial statements using the modified equity method of accounting. These financial statements include the following transactions between the Government and GBEs:

97

PROVINCE OF MANITOBA
PUBLIC ACCOUNTS 2009/10

A.	Accounts Receivable
	Amounts receivable includes receivables from GBEs as reported in Schedule 1. Loans and advances to GBEs are reflected in Schedule 2.
B.	Borrowings
	Borrowings include $445 million (2009 — $406 million) owed to Manitoba Public Insurance Corporation (MPIC) relating to the capital financing of school board and health care facilities. Borrowings also include debt in the amount of $328 million (2009 — $387 million) and $60 million (2009 — $67 million) owed to MPIC and Manitoba Hydro-Electric Board respectively, related to the financing of other government programs.
	These borrowings are repayable over a term from 2010 to 2040 at varying interest rates ranging from 1.753% to 12.25%.
C.	Water Power Rentals
	Water power rental fees charged to the Manitoba Hydro-Electric Board (Hydro), in the amount of $114 million (2009 — $115 million), are included in the Consolidated Statement of Revenue and Expense under the Fees and other revenue category. Water power rental rates are authorized by Regulation 25/88 and 197/2001 under The Water Power Act. Rentals are paid to the Government for the use of water resources in the operation of Hydro’s hydroelectric generating stations.
D.	Fees and Government Guarantees
	The Manitoba Hydro-Electric Board (Hydro) remitted $75 million (2009 — $74 million) to the Government based on the Hydro debt that is guaranteed by the Government. The fees are included in the Consolidated Statement of Revenue and Expense under the sinking funds and other investment earnings category.
E.	Driver Licensing Operations
	The Government, by agreement, paid $21 million (2009 — $21 million) to Manitoba Public Insurance Corporation (MPIC) for the management and administration of driver licensing. MPIC, on behalf of the Government, collected driver licensing fees totalling $20 million (2009 — $20 million) and motor vehicle registration fees totalling $127 million (2009 — $118 million).
	The fees received by the Government are included in the Consolidated Statement of Revenue and Expense under the fees and other revenue category.
F.	Other Revenue
	Under The Workplace Safety and Health Act of Manitoba, the Workers Compensation Board supports the administrative expenses incurred by the Government’s Department of Labour and Immigration for the Workplace Safety and Health program and the Worker Advisor Office. The amount for the year ended March 31, 2010 was $8 million (2009 — $8 million).
	The Manitoba Lotteries Corporation provided $3 million in funding for the year ended March 31, 2010 (2009 — $3 million) to the Addictions Foundation of Manitoba for problem gambling services programs.
	Manitoba Hydro-Electric Board paid Corporation Capital Tax of $48 million for the year ended March 31, 2010 (2009 — $46 million).
	These amounts received by the Government are included in the Statement of Revenue and Expense under the fees and other revenue and other taxes categories.

98

PROVINCE OF MANITOBA
PUBLIC ACCOUNTS 2009/10

14.	EXPENSES IN EXCESS OF LEGISLATIVE AUTHORITY
	In addition to producing a Summary budget as presented on the summary financial statements, Consolidated Statement of Revenue and Expense, the Government continues to provide budget estimates for the Core Government revenue and expenses. Public Sector Accounting standards recommend disclosure of information where a government has exceeded its revenue, borrowing, investing, expense or expenditure authority limits. The budget estimate presented on the Consolidated Statement of Revenue and Expense, exclude $419 million in supplemental estimates and special warrants related to the Core Government. The original budget estimate amounts plus the $419 million in supplemental estimates and special warrants becomes the revised estimates, against which expenses in excess of legislative authority are determined. Budget estimates have been reclassified to align with the departmental reorganization that occurred during the year.
	Based upon the revised estimates, the following voted appropriations were over-expended as a result of adjustments made after March 31, 2010:

	($ millions)
Aboriginal and Northern Affairs
Aboriginal and Northern Affairs Operations		3
Agriculture, Food and Rural Initiatives
Risk Management, Credit and Income Support Programs		1
Conservation
Conservation Programs		2
Health
Health Services Insurance Fund		12
Justice
Criminal Justice		3

15.	COMPARATIVE FIGURES
	Certain 2009 financial statement figures have been reclassified to be consistent with the 2010 presentation.

99

PROVINCE OF MANITOBA
PUBLIC ACCOUNTS 2009/10

SCHEDULE 1

SUMMARY FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF AMOUNTS RECEIVABLE
As at March 31, 2010

	($ millions)
	2010		2009
TAXATION REVENUE:
Corporation capital tax		1		2
Corporation income tax		42		48
Gasoline tax		14		14
Levy for health and education		34		30
Individual income tax		151		146
Insurance corporations tax		18		17
Motive fuel tax		10		9
Oil and natural gas tax		2		—
Retail sales tax		151		149
Tobacco tax		23		17
		446		432
GOVERNMENT OF CANADA AND OTHER GOVERNMENTS:
Municipal corporations		207		206
Government of Canada shared cost programs/agreements		212		147
Other		61		58
		480		411
INTEREST:
Sinking fund		15		20
Other investments		8		14
		23		34
OTHER:
Health and social services		150		116
Manitoba Hydro-Electric Board		13		9
Manitoba Liquor Control Commission		48		43
Manitoba Lotteries Corporation		2		4
Manitoba Public Insurance Corporation		10		10
Sundry departmental revenue		79		63
Other		126		125
		428		370
		1,377		1,247
Less: Allowances		114		104
Total Amounts Receivable		1,263		1,143

100

PROVINCE OF MANITOBA
PUBLIC ACCOUNTS 2009/10

SCHEDULE 2

SUMMARY FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF LOANS AND ADVANCES
As at March 31, 2010

	($ millions)
	2010		2009
GOVERNMENT BUSINESS ENTERPRISES:
Manitoba Hydro-Electric Board		8,288		7,836
Manitoba Public Insurance Corporation		2		—
Manitoba Lotteries Corporation		160		172
		8,450		8,008
Less: Debt incurred for and repayable by the Manitoba Hydro-Electric Board		8,288		7,836
		162		172
OTHER:
Loans and mortgages — Note a		613		598
Northern Affairs Fund — Note b		5		—
Manitoba Potash Corporation — Note c		4		4
Manitoba student loans — Note d		43		34
Family services agencies — Note e		23		21
Rural Economic Development Initiatives program — Note f		3		3
Other		1		1
		692		661
TOTAL LOANS AND ADVANCES		854		833
Less: Valuation allowance		68		66
NET LOANS AND ADVANCES		786		767

The Government business enterprises loans and advances portfolio is due in varying annual amounts to the year 2038, bearing interest at either;

i) fixed with rates ranging from 4.050% to 10.673%

ii) floating Canadian — Bankers Acceptance setting, with the lowest rate set at 0.36% and the highest at 3.83% as at March 31, 2010

iii) floating U.S. — U.S. Dollar London Interbank Offering rate, with the lowest rate set at 0.29% and the highest at 0.57% as at March 31, 2010

Note a 

Agricultural direct lending and special assistance program mortgages, due in varying annual amounts to the year 2034, bearing interest rates ranging from 1.0% to 8.0%.	342	340
Housing direct lending and special assistance program mortgages, due in varying annual amounts to the year 2035, bearing interest rates ranging from 0.0% to 13.5%.	140	146
Business development assistance loans, due in varying annual amounts to the year 2040, bearing interest rates ranging from 0.0% to 9.0%.	104	86
Northern business development and fishing industry assistance loans, due in varying annual amounts to the year 2018, bearing interest rates ranging from 4.25% to 9.88%.	27	26
	613	598

Note b —	Northern districts improvement loans, due in varying amounts to the year 2020, repayable in annual installments, bearing interest at 4.45%.
Note c —	Advances, repayable on the Corporation generating revenue or the sale of the Province’s interest, bearing interest at prime less 0.75%.
Note d —	Student loans, payment and interest free until 6 months past the completion of studies, due 114 to 174 months after that time, carrying interest at prime plus 1.5%.
Note e —	Advances to provide family services agencies with interim funding to meet daily operating expenses related to providing services, to be repaid when no longer required, bearing no interest.
Note f —	Community Works Program loans, repayable at the end of the 5 to 10 year term, bearing no interest.

101

PROVINCE OF MANITOBA
PUBLIC ACCOUNTS 2009/10

SCHEDULE 3

SUMMARY FINANCIAL STATEMENTS

GOVERNMENT BUSINESS ENTERPRISES

SCHEDULE OF CONSOLIDATED OPERATING RESULTS AND FINANCIAL POSITION

For the Year Ended March 31, 2010
($ millions)

								TOTAL			TOTAL
	UTILITY		INSURANCE		FINANCE			2010			2009
CHANGES IN EQUITY
Results from Operations
Revenues from operations		2,053		1,272		1,383			4,708			4,932
Expenses: From operations		1,480		1,203		832			3,515			3,718
Debt servicing		410		—		11			421			450
Total expenses		1,890		1,203		843			3,936			4,168
Net income		163		69		540			772			764
Transfers to the Government		—		—		(540	)		(540	)		(534	)
		163		69		—			232			230
Other Comprehensive Income (Loss)		454		255		—			709			(781	)
Net increase (decrease) in equity in government business enterprises		617		324		—			941			(551	)
FINANCIAL POSITION
Assets:
Cash and temporary investments		174		93		37			304			465
Amounts receivable		371		326		30			727			788
Portfolio investments — Due from Government organizations		822		—		46			868			712
Due from others		—		3,086		—			3,086			2,636
Capital assets		9,833		147		186			10,166			9,331
Other assets		942		230		47			1,219			1,106
Total assets		12,142		3,882		346			16,370			15,038
Liabilities:
Accounts payable, accrued liabilities and deferred revenue		960		575		123			1,658			1,587
Long-term debt: Owing to Government organizations		8,288		—		160			8,448			8,008
Other borrowings, discounts and deferred transaction costs		250		—		—			250			451
Provision for future benefits: Pension obligations		120		189		54			363			396
Future cost of existing claims		—		2,579		4			2,583			2,469
Total liabilities		9,618		3,343		341			13,302			12,911
Equity in government business enterprises		2,524		539		5			3,068			2,127

For government business enterprises whose fiscal year end is prior to March 31, the amounts reflected are as at their fiscal year end.

102

PROVINCE OF MANITOBA
PUBLIC ACCOUNTS 2009/10

SCHEDULE 4

SUMMARY FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF BORROWINGS
As at March 31, 2010

($ millions)

					Canada				Promissory Notes
					Pension		Loans and		and
	Bonds and Debentures				Plan		Mortgages		Treasury Bills		Totals
Fiscal Year of Maturity	Cdn		US		Cdn		Cdn		Cdn		2010			2009
2010		—		—		—		—		—		—			3,364
2011		1,356		457		103		48		1,500		3,464			1,975
2012		1,858		—		105		37		—		2,000			2,015
2013		1,959		—		73		72		—		2,104			1,605
2014		1,631		750		—		72		—		2,453			1,489
2015		1,776		—		—		66		—		1,842			898
2010-2015		8,580		1,207		281		295		1,500		11,863			11,346
2016-2020		4,399		914		15		5		—		5,333			5,739
2021-2030		1,571		305		—		215		—		2,091			1,256
2031-2063		4,917		—		184		—		—		5,101			4,300
2011-2043 Crown Organizations		443		—		—		270		—		713			683
2011-2063		11,330		1,219		199		490		—		13,238			11,978
Total borrowings		19,910		2,426		480		785		1,500		25,101			23,324
Reduced by:
Debt incurred for and repayable by The Manitoba Hydro-Electric Board												(8,289	)		(7,836	)
Unamortized debt issue costs												(16	)		(8	)
Unamortized foreign currency fluctuation												(56	)		(61	)
Unamortized gains and losses on derivative contracts												46			50
Province of Manitoba debt issues held as investments in sinking funds and cash and cash equivalents												(675	)		(578	)
												16,111			14,891

	March 31/10		March 31/09
	Cdn $ Valuation		Cdn $ Valuation
	(See Notes)		(See Notes)
Borrowings payable in:
Canadian dollars		18,907		17,146
Foreign issues hedged to Canadian dollars		3,768		3,173
U.S. dollars		2,035		2,397
Foreign issues hedged to U.S. dollars		391		608
Total borrowings		25,101		23,324

Note a:	The hedges are derivative contracts which include swaps and forward foreign exchange contracts.
Note b:	The Canadian dollar valuation is calculated using the foreign currency exchange rates in effect at each March 31 adjusted for any forward foreign exchange contracts entered into for settlement after year-end.
Note c:	Interest rates on these borrowings fall into one of three categories:

i)	Fixed with rates ranging from 1.57% to 11.33%.
ii)	Floating Canadian — Bankers Acceptance (BA) setting, established quarterly or monthly, with the lowest rate currently set at 0.29% and the highest set at 3.83% as at March 31, 2010.
iii)	Floating U.S. — U.S. Dollar London Interbank Offering Rate (LIBOR) setting, established quarterly, with the lowest rate currently set at .29% and the highest set at .57% as at March 31, 2010.

103

PROVINCE OF MANITOBA
PUBLIC ACCOUNTS 2009/10

SCHEDULE 5

SUMMARY FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF ACCOUNTS PAYABLE,
ACCRUED CHARGES, PROVISIONS AND UNEARNED REVENUE
As at March 31, 2010

	($ millions)
	2010		2009
Accounts payable		1,228		1,286
Accrued charges:
Interest accrued on borrowings		258		267
Canadian Agricultural Income Stabilization / Agrinvest		64		91
Compensation for Victims of Crime		24		21
Disaster assistance		11		5
Flood claims		18		16
Infrastructure works program		24		18
Land acquisition claims		—		2
Long term disability income plan		18		28
Environmental liabilities		521		540
Salaries and benefits		571		409
Severance pay		320		296
Workers Compensation Board claims		24		23
Other		48		200
		1,901		1,916
Provision for future losses on guarantees (Note 6)		21		21
Unearned Revenue:
Deferred contributions related to future expense		22		2
Government of Canada — Advances re: shared-cost programs not yet claimed		129		64
Research and Special Funds		108		103
Tuition and education fees		25		42
Vehicle registration		57		55
Other		22		39
		363		305
Total Accounts Payable, Accrued Charges, Provisions and Unearned Revenue		3,513		3,528

104

PROVINCE OF MANITOBA
PUBLIC ACCOUNTS 2009/10

SCHEDULE 6

SUMMARY FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF PENSION LIABILITY
As at March 31, 2010

							Post-			Public
	Civil						Secondary			School
	Service			Teachers'			Education			Division			Other			($ millions)
	Superannuation			Pension			Plans			Plans			Plans			Total			Total
	Plan			Plan			(Note A)			(Note A)			(Note A)			2010			2009
ACCRUED BENEFIT OBLIGATION
Obligation at beginning of year as previously reported		1,977			2,744			1,115			335			97			6,268			6,112
Restatement (Note 9 C)		53			—			—			—			—			53			53
Obligation at beginning of year as restated (Note B)		2,030			2,744			1,115			335			97			6,321			6,165
Current service costs		64			69			45			15			3			196			194
Interest cost on benefit obligation		131			176			66			21			5			399			396
Change in actuarial (gains) losses and reserves		—			23			19			1			(7	)		36			(106	)
Plan amendment		—			—			—			—			—			—			—
Benefits paid		(94	)		(139	)		(72	)		(11	)		(5	)		(321	)		(328	)
Obligation at end of year		2,131			2,873			1,173			361			93			6,631			6,321
PLAN ASSETS
Plan assets at beginning of year as previously reported		725			1,519			952			329			29			3,554			1,566
Restatement (Note 9 C)		44			—			—			—			—			44			53
Plan assets at beginning of year as restated (Note B)		769			1,519			952			329			29			3,598			1,619
Employer contributions		64			69			24			9			4			170			155
Employee contributions		—			—			19			8			—			27			25
Transfer of plan assets		—			—			—			—			—			—			2,243
Plan asset contributions		340			—			—			—			—			340			413
Benefits paid		(94	)		(139	)		(72	)		(11	)		(5	)		(321	)		(328	)
Expected return on plan assets		54			115			67			21			3			260			193
Experience gains (losses)		44			110			107			20			2			283			(722	)
Market value of plan assets		1,177			1,674			1,097			376			33			4,357			3,598
Deferred investment losses		26			131			67			8			3			235			563
Market related value of plan assets		1,203			1,805			1,164			384			36			4,592			4,161
PENSION LIABILITY
Plan deficit (surplus)		928			1,068			9			(23	)		57			2,039			2,160
Unamortized actuarial gains (losses)		(12	)		(261	)		(6	)		(13	)		8			(284	)		(180	)
Surplus adjustments (Note C)		—			—			7			36			2			45			11
Pension liability		916			807			10			—			67			1,800			1,991
PENSION EXPENSE
Defined benefit pension plan expense:		64			69			45			15			3			196			194
Current service cost
Interest cost on benefit obligation		131			176			65			21			5			398			397
Return on plan assets		(54	)		(115	)		(67	)		(21	)		(3	)		(260	)		(193	)
Employee contributions		—			—			(19	)		(8	)		—			(27	)		(25	)
Amortization of actuarial (gains) losses		(6	)		21			(6	)		1			(1	)		9			1
Plan amendment		—			—			—			—			—			—			—
Change in surplus adjustments		—			—			(1	)		1			2			2			(42	)
Defined benefit pension plan expense		135			151			17			9			6			318			332
Defined contribution pension plan expense		—			—			3			16			106			125			121

105

PROVINCE OF MANITOBA
PUBLIC ACCOUNTS 2009/10

SCHEDULE 6
(cont’d)

SUMMARY FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF PENSION LIABILITY
As at March 31, 2010

	Civil						Post-			Public
	Service			Teachers'			Secondary			School
	Superannuation			Pension			Education			Division			Other			Total		Total
	Plan			Plan			Plans			Plans			Plans			2010		2009
MEMBER DATA
Defined benefit pension plan
Number of active and deferred members		31,400			21,600			5,600			4,300			300			63,200		61,400
Number of pensioners		15,700			12,000			1,500			1,400			300			30,900		30,000
Total number of plan members		47,100			33,600			7,100			5,700			600			94,100		91,400
ACTUARIAL ASSUMPTIONS
Discount rate on accrued benefits		6.50	%		6.50	%		5.75 - 6.00	%		6.00 - 6.25	%		5.00 - 5.50	%
Expected long-term rate of return		6.50	%		6.50	%		5.75 - 6.00	%		6.00 - 6.25	%		5.00 - 5.50	%
Inflation		2.50	%		2.25	%		2.00 - 2.75	%		2.00 - 2.50	%		2.00 - 2.50	%
Real rate of return		4.00	%		4.25	%		3.00 - 3.50	%		3.50 - 4.00	%		3.00 - 3.50	%
Rate of salary increase		3.25	%		3.00	%		4.00	%		4.00 - 4.50	%		3.00 - 4.00	%
Latest valuation	Dec 2007			Jan 2009			(Note D)			(Note D)			(Note D)

Note A:	Post-Secondary Education plans include the University of Manitoba Pension Plans, the University of Winnipeg Pension Plan and the Brandon University Retirement Plan.
	Public School Division plans include the Winnipeg School Division Pension Fund for Employees Other Than Teachers, Retirement Plan for Non-Teaching Employees of the St. James-Assiniboia School Division and Retirement Plan for Employees of Frontier School Division.
	Other plans include the Members of Legislative Assembly Pension Plan, the Legislative Assembly Pension Plan, the Judges’ Supplemental Pension Plan, and the Winnipeg Child and Family Services Employee Benefits Retirement Plan.
Note B:	An adjustment was made to restate the opening balance of the accrued benefit obligation and plan assets for the Civil Service Superannuation Fund. Previously, the accrued benefit obligation was reported net of assets held in a special employer trust account. Commencing in 2008/09 these assets have been reported as plan assets, consistent with the Government’s reporting policy on plan assets. The value of assets held in the special employer trust account at the beginning of 2009/10 was $44 million (2009 — $53 million). The opening accrued benefit obligation for 2010 was restated to reflect the value of the special employer trust account of $44 million (2009 -$53 million) and deferred and unamortized losses recorded in 2009 of $12 million. In addition, there was an amount of $9 million reclassified from the accrued benefit obligation to the unamortized actuarial losses in 2009, with no impact to the net liability as a result of the restatement.
Note C:	For those plans that the Government is unable to access surplus funds within the plan, adjustments are made to reduce these surplus amounts to nil. These pension surpluses represent the excess of the plan assets funded by employees over the employers’ share of the accrued benefit obligation
Note D:	Latest actuarial valuation report dates are as follows:

- University of Manitoba Pension Plans	Dec 2009
- University of Winnipeg Pension Plan	Dec 2007
- Brandon University Retirement Plan	Dec 2007
- Winnipeg School Division Pension Fund for Employees Other than Teachers	Dec 2008
- Retirement Plan for Non-Teaching Employees of the St. James-Assiniboia School Division	Dec 2007
- Retirement Plan for Employees of Frontier School Division	Dec 2007
- Members of Legislative Assembly Pension Plan	Mar 2009
- Legislative Assembly Pension Plan	Dec 2009
- Judges’ Supplemental Pension Plan	Mar 2010
- Winnipeg Child and Family Services Employee Benefits Retirement Plan	Dec 2009

106

PROVINCE OF MANITOBA
PUBLIC ACCOUNTS 2009/10

SCHEDULE 7

SUMMARY FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF TANGIBLE CAPITAL ASSETS
For the Year Ended March 31, 2010
($ millions)

	General Capital Assets															Infrastructure									Totals
				Buildings						Computer										Dams and
				and			Vehicles			Hardware			Assets			Land and				Water		Assets
				Leasehold			and			and			Under			Land				Management		Under
	Land			Improvements			Equipment			Software			Construction			Improvements		Transportation		Structures		Construction			2010			2009
Cost
Opening cost, as previously reported		203			5,266			1,871			590			487			258		2,510		88		511			11,784			10,887
Restatements, (Note 9)		—			(3	)		(1	)		—			—			—		—		—		—			(4	)		(4	)
Opening cost restated		203			5,263			1,870			590			487			258		2,510		88		511			11,780			10,883
Add:
Additions during the year		21			326			161			30			204			9		305		2		169			1,227			978
Less:
Disposals and write downs		(2	)		(31	)		(43	)		(10	)		(4	)		—		—		—		—			(90	)		(81	)
Settlements and reclassifications		—			73			7			—			(80	)		2		81		20		(103	)		—			—
Closing cost		222			5,631			1,995			610			607			269		2,896		110		577			12,917			11,780
Accumulated amortization
Opening, as previously reported		—			2,381			1,275			337			—			46		1,167		58		—			5,264			4,953
Restatements, (Note 9)
		—			(1	)		(1	)		—			—			—		—		—		—			(2	)		(2	)
Opening accumulated amortization restated		—			2,380			1,274			337			—			46		1,167		58		—			5,262			4,951
Add:
Amortization		—			134			123			48			—			4		93		2		—			404			375
Less:
Accumulated amortization on disposals, write downs		—			(13	)		(42	)		(9	)		—			—		—		—		—			(64	)		(64	)
Closing accumulated amortization		—			2,501			1,355			376			—			50		1,260		60		—			5,602			5,262
Net Book Value of Tangible Capital Assets		222			3,130			640			234			607			219		1,636		50		577			7,315			6,518

During the year, the Province capitalized $17 million of interest relating to assets under construction (2009 — $13 million).

107

PROVINCE OF MANITOBA
PUBLIC ACCOUNTS 2009/10

SCHEDULE 8

FUNDS, ORGANIZATIONS AND BUSINESS ENTERPRISES
COMPRISING THE GOVERNMENT REPORTING ENTITY

HEALTH AND HEALTHY LIVING

Manitoba Health
Manitoba Healthy Living, Youth and
Seniors Addictions Foundation of Manitoba
CancerCare Manitoba
Diagnostic Services of Manitoba Inc.
Manitoba Health Research Council
Manitoba Health Services
Insurance Plan
Manitoba Hospital Capital Financing
Authority Not-for-Profit
Personal Care Homes
Regional Health Authorities (including controlled
     organizations) Assiniboine Regional Health Authority Inc.

Brandon Regional Health Authority Inc.
Burntwood Regional Health Authority Inc.
Churchill Regional Health Authority Inc.
Interlake Regional Health Authority NOR-
MAN Regional Health Authority Inc.
North Eastman Health Association Inc.
Parkland Regional Health Authority Inc.
Regional Health Authority - Central Manitoba Inc.
South Eastman Health/Santé Sud-Est Inc.
Winnipeg Regional Health Authority

Rehabilitation Centre for Children
Inc. St. Amant Centre

EDUCATION

Manitoba Advanced Education and Literacy
Manitoba Education
Assiniboine Community College
Brandon University
Collège universitaire de Saint-Boniface
Council on Post-Secondary Education
Manitoba Text Book Bureau
Public School Divisions
Public Schools Finance Board
Red River College
University College of The North
University of Manitoba
University of Winnipeg

108

PROVINCE OF MANITOBA
PUBLIC ACCOUNTS 2009/10

SCHEDULE 8
(cont’d)

FAMILY SERVICES AND CONSUMER AFFAIRS

Manitoba Family Services and Consumer Affairs
Board of Administration under the Embalmers and Funeral Directors
Act Companies Office
First Nations of Northern Manitoba Child & Family Services Authority
First Nations of Southern Manitoba Child & Family Services
Authority General Child and Family Services Authority
Insurance Council of Manitoba
Land Titles Assurance Fund
Métis Child and Family Services
Authority The Property Registry
Vital Statistics Agency

COMMUNITY, ECONOMIC AND RESOURCE DEVELOPMENT

Manitoba Aboriginal and Northern Affairs
Manitoba Agriculture, Food and Rural Initiatives
Manitoba Conservation
Manitoba Entrepreneurship, Training and Trade
Manitoba Housing and Community Development
Manitoba Infrastructure and Transportation
Manitoba Innovation, Energy and Mines
Manitoba Local Government
Manitoba Water Stewardship
Abandonment Reserve Fund
Communities Economic Development Fund
Community Revitalization Fund
Cooperative Loans and Loans Guarantee Board
Cooperative Promotion Board
Crown Lands and Property Agency
Economic Innovation and Technology Council
Ethanol Fund
Farm Machinery and Equipment Act Fund
Food Development Centre
Green Manitoba Eco Solutions
Horse Racing Commission
Industrial Technology Centre
Leaf Rapids Town Properties Ltd.
Manitoba Agricultural Services Corporation
Manitoba Community Services Council Inc.
Manitoba Development Corporation
Manitoba Education, Research and Learning
     Information Networks (Merlin)
Manitoba Floodway and East Side Road Authority

109

PROVINCE OF MANITOBA
PUBLIC ACCOUNTS 2009/10

SCHEDULE 8
(cont’d)

COMMUNITY, ECONOMIC AND RESOURCE DEVELOPMENT, cont’d

Manitoba Gaming Control Commission
Manitoba Habitat Heritage Corporation
Manitoba Hazardous Waste Management
Corporation Manitoba Housing and Renewal
Corporation Manitoba Opportunities Fund Ltd.
Manitoba Product Stewardship Corporation
Manitoba Trade and Investment Corporation
Manitoba Trucking Productivity Improvement Fund
Manitoba Water Services Board
Materials Distribution Agency
Mining Community Reserve
Mining Rehabilitation Reserve
Pineland Forest Nursery Quarry
Rehabilitation Reserve
Vehicle and Equipment Management Agency
Veterinary Science Scholarship Fund
Waste Reduction and Recycling Support Fund

JUSTICE AND OTHER EXPENDITURES

Legislative Assembly
Executive Council
Civil Service Commission
Manitoba Culture, Heritage and
Tourism Manitoba Finance
Manitoba Justice
Manitoba Labour and
Immigration Manitoba Sport
Civil Legal Services
Crown Corporations Council Helen
Betty Osborne Foundation
Le Centre culturel franco-manitobain
Legal Aid Services Society of
Manitoba Manitoba Arts Council
Manitoba Boxing Commission
Manitoba Centennial Centre Corporation
Manitoba Film and Sound Recording Development
Corporation Manitoba Law Reform Commission
Manitoba Securities Commission
Office of the Fire Commissioner
Organization and Staff
Development Pension Assets Fund

110

PROVINCE OF MANITOBA
PUBLIC ACCOUNTS 2009/10

SCHEDULE 8
(cont’d)

JUSTICE AND OTHER EXPENDITURES, cont’d

Special Operating Agencies Financing
Authority Sport Manitoba Inc.
The Public Trustee
Travel Manitoba
Venture Manitoba Tours Ltd.
Victims Assistance Fund
Workplace Safety Public Education Fund

GOVERNMENT BUSINESS ENTERPRISES: (Schedule 3) (Note 4)

Utility:

Manitoba Hydro-Electric Board

Insurance:

Manitoba Public Insurance Corporation
Workers Compensation Board

Finance:

Manitoba Liquor Control Commission
Manitoba Lotteries Corporation

SPECIAL ACCOUNTS, not attached to a Sector or Department

Debt Retirement Account
Fiscal Stabilization Account

111

PROVINCE OF MANITOBA
PUBLIC ACCOUNTS 2009/10

SCHEDULE 9

SUMMARY FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF OPERATIONS BY SECTOR
For the Year Ended March 31, 2010
($ millions)

																			Community, Economic
	Health and												Family Services						and Resource
	Healthy Living						Education						and Consumer Affairs						Development
	2010			2009			2010			2009			2010			2009			2010			2009
	$			$			$			$			$			$			$			$
REVENUE
Income taxes		—			—			—			—			—			—			—			—
Other taxes		—			—			668			657			—			—			25			24
Fees and other revenue		482			402			529			508			55			58			600			583
Federal transfers		919			888			120			117			5			5			326			345
Contributions from entities within the
Government Reporting Entity		74			31			89			52			—			—			4			—
Sinking funds and other investment earnings		22			2			(2	)		13			—			—			44			49
TOTAL REVENUE		1,497			1,323			1,404			1,347			60			63			999			1,001
EXPENSE
Personnel services		2,759			2,545			2,255			2,134			189			178			398			365
Grants/Transfer payments		884			818			106			102			213			183			522			540
Transportation		52			44			16			17			5			5			70			58
Communication		22			19			18			20			4			5			16			18
Supplies and services		661			671			473			454			33			34			283			272
Social assistance related		5			8			3			3			835			768			95			74
Other operating		394			375			239			245			24			20			288			262
Debt servicing		43			66			119			125			1			1			182			169
Minor capital		24			23			41			38			2			2			15			14
Amortization		136			127			110			104			4			4			144			131
TOTAL EXPENSE		4,980			4,696			3,380			3,242			1,310			1,200			2,013			1,903
NET INCOME (LOSS) FOR THE YEAR		(3,483	)		(3,373	)		(1,976	)		(1,895	)		(1,250	)		(1,137	)		(1,014	)		(902	)

112

PROVINCE OF MANITOBA
PUBLIC ACCOUNTS 2009/10

SCHEDULE 9
(cont’d)

SUMMARY FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF OPERATIONS BY SECTOR
For the Year Ended March 31, 2010
($ millions)

	Justice and						General Government				Adjustments
	Other Expenditures						(Note a)				(Note b)						Total
	2010			2009			2010		2009		2010			2009			2010			2009
	$			$			$		$		$			$			$			$
REVENUE
Income taxes		—			—			2,659		2,841		—			—			2,659			2,841
Other taxes		—			—			2,588		2,595		—			—			3,281			3,276
Fees and other revenue		135			132			—		4		(10	)		33			1,791			1,720
Federal transfers		50			44			2,507		2,468		(3	)		(1	)		3,924			3,866
Contributions from entities within the Government Reporting Entity		—			—			796		784		(191	)		(103	)		772			764
Sinking funds and other investment earnings		180			225			1		18		(25	)		(11	)		220			296
TOTAL REVENUE		365			401			8,551		8,710	��	(229	)		(82	)		12,647			12,763
EXPENSE
Personnel services		459			529			7		5		7			2			6,074			5,758
Grants/Transfer payments		64			43			32		11		(418	)		(190	)		1,403			1,507
Transportation		9			9			5		17		28			—			185			150
Communication		16			14			1		—		—			—			77			76
Supplies and services		165			156			87		9		161			121			1,863			1,717
Social assistance related		29			23			—		—		—			—			967			876
Other operating		48			38			33		2		3			1			1,029			943
Debt servicing		422			485			—		—		(11	)		(16	)		756			830
Minor capital		4			3			3		—		1			—			90			80
Amortization		7			6			3		3		—			—			404			375
TOTAL EXPENSE		1,223			1,306			171		47		(229	)		(82	)		12,848			12,312
NET INCOME (LOSS) FOR THE YEAR		(858	)		(905	)		8,380		8,663		—			—			(201	)		451

Note a: The general government category includes revenue from sources that cannot be attributed to a particular sector.

Note b: Consolidation adjustments are necessary to conform sectors to Government accounting policies and to eliminate transactions between sectors.

113

PROVINCE OF MANITOBA
PUBLIC ACCOUNTS 2009/10

SCHEDULE 10

SUMMARY FINANCIAL STATEMENTS
CONSOLIDATED DETAILS AND RECONCILIATION
TO CORE GOVERNMENT RESULTS
For the Year ended March 31, 2010
($ millions)

	2010									2009
	Core			Consolidation			Summary			Core			Consolidation		Summary
	Government			Impacts			2010			Government			Impacts		2009
	(Note)
REVENUE
Income taxes		2,659			—			2,659			2,841			—		2,841
Other taxes		2,688			593			3,281			2,715			561		3,276
Fees and other revenue		504			1,287			1,791			457			1,263		1,720
Federal transfers		3,676			248			3,924			3,624			242		3,866
Net income from government business enterprises (Schedule 3)		540			232			772			534			230		764
Sinking funds and other investment earnings		—			220			220			—			296		296
TOTAL REVENUE		10,067			2,580			12,647			10,171			2,592		12,763
EXPENSES
Health and Healthy Living		4,544			286			4,830			4,309			279		4,588
Education		2,065			1,162			3,227			1,975			1,116		3,091
Family Services and Consumer Affairs		1,292			3			1,295			1,192			—		1,192
Community, Economic and Resource Development		1,557			257			1,814			1,584			145		1,729
Justice and Other Expenditures		870			56			926			713			169		882
Debt Servicing (Note 8)		240			516			756			242			588		830
TOTAL EXPENSES		10,568			2,280			12,848			10,015			2,297		12,312
Net Result for the Year		(501	)		300			(201	)		156			295		451
Transfer (to) from Debt Retirement Account		(20	)		20			—			(110	)		110		—
Transfer (to) from Fiscal Stabilization Account		57			(57	)		—			(46	)		46		—
NET INCOME (LOSS) FOR THE YEAR		(464	)		263			(201	)		—			451		451

Note:  The Core Government is a component of the Government Reporting Entity and represents the revenues directly reported and the programs and services delivered by government departments. Core Government results are based upon specified accounting policies which vary from Canadian generally accepted accounting principles, in that the results for the year do not reflect the expenses related to the increase in the overall pension liability, do not consolidate the operations of all Crown organizations, include results of the Finance category of government business enterprises only and account for capital financing to health care facilities as a deferred charge. In addition, starting in 2008/09, certain loans and advances to Crown organizations, repaid through future appropriations, were reflected as assets of the Core Government. Public sector accounting standards would require these advances to be expensed as grants in the year issued (this change resulted in a decrease in Core Government expenses of $43 million for 2010 ($2 million - -2009)). This presentation is eliminated upon consolidation.

114