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

Exhibit 99.1

Province of Manitoba

2010/11 Quarterly Financial Report
April to June 2010

CONTENTS

Introduction
Quarterly Financial Results
Economic Performance and Outlook

INTRODUCTION

Budget 2010 provided the financial overview of the Government Reporting Entity (GRE), which includes core government and Crown organizations, government business entities and public sector organizations such as regional health authorities, school divisions, universities and colleges. Manitoba’s summary budget aligns with the accounting standards set by the Public Sector Accounting Board and fully reflects Generally Accepted Accounting Principles (GAAP). A summary budget presents a more complete picture of how the provincial government and the other related entities operate as a whole and what the total cost is of providing services and programs to people in Manitoba.

The financial information in this quarterly financial report is presented in the same format as the budget. The first quarter financial report presents information on the GRE for the three months ending June 30, 2010. The report also contains an economic performance and outlook. Consistent with prior years, an updated projection for the year end will be provided in the second quarter report.

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PROVINCE OF MANITOBA APRIL TO JUNE 2010

GOVERNMENT REPORTING ENTITY (GRE)

Budget 2010 introduced a five-year plan to position the province for the global economic recovery and return the province to surplus. The economic recovery plan projected a first year shortfall in 2010/11 of $545 million for the GRE. The impact of the economic downturn on front-line services, including health care, education, policing and supports for families, and the timing of federal stimulus projects continues to be monitored. Severe spring and summer flooding and forest fire suppression in northern Manitoba have increased costs and a Special Warrant is being issued to provide for these unbudgeted emergency expenditures. More complete information on expenditure and revenue projections which will provide the basis for a revised year end result will be available for the second quarter report.

Projection of Summary Net Income/(Loss)
For the Fiscal Year Ending March 31, 2011
UNAUDITED

	2010/11 Budget
				Consolidation
	Core			Impacts and Other
(Millions of Dollars)	Government			Reporting Entities			Summary
Revenue		10,218			2,502			12,720
Expenditure		10,755			2,510			13,265
Net Result for the Year		(537	)		(8	)		(545	)
Transfer from/(to) Fiscal Stabilization Account		38			(38	)		—
Net Income/(Loss)		(499	)		(46	)		(545	)

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PROVINCE OF MANITOBA APRIL TO JUNE 2010

QUARTERLY FINANCIAL RESULTS

The unaudited net result of expenditure exceeding revenue for the first three months of the fiscal year is $(218) million, $146 million lower than estimated. The variance is the net result of revenue being $66 million higher than anticipated and expenditure being $80 million lower than estimated.

The three-month revenue variance is mainly due to the net income of Government Business Enterprises being higher than estimated as the result of the timing of receipts and expenditures. Partially offsetting the increase is lower than estimated federal transfers due to the timing of cost-shared projects in core government. The three-month expenditure variance primarily results from timing of core government expenditures.

Government Reporting Entity Operating Statement
UNAUDITED

	Year-to-Date to June 30
	2010/11									2009/10
($000s)	Actual			Estimated			Variance			Actual
Revenue
Income Taxes		668,199			668,185			14			656,914
Other Taxes		623,638			620,913			2,725			458,873
Fees and Other Revenue		417,371			414,423			2,948			404,646
Federal Transfers		955,826			971,891			(16,065	)		995,353
Net Income of Government Business Enterprises		180,128			106,739			73,389			110,093
Sinking Funds and Other Earnings		57,111			54,138			2,973			66,109
Total Revenue		2,902,273			2,836,289			65,984			2,691,988
Expenditure
Health and Healthy Living		1,252,746			1,267,826			(15,080	)		1,202,774
Education		930,981			972,526			(41,545	)		730,532
Family Services and Consumer Affairs		325,066			322,347			2,719			322,661
Community, Economic and Resource Development		273,932			300,845			(26,913	)		249,784
Justice and Other Expenditures		174,119			176,273			(2,154	)		191,728
Year-end Lapse		—			—			—			—
Debt Servicing Costs		163,754			160,635			3,119			172,548
Total Expenditure		3,120,598			3,200,452			(79,854	)		2,870,027
Net Income/(Loss)		(218,325	)		(364,163	)		145,838			(178,039	)

Core government revenue and expenditure details are provided in Appendix I and II on pages 9 and 10.

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PROVINCE OF MANITOBA APRIL TO JUNE 2010

Infrastructure and Capital Asset Renewal

Planned expenditures for Infrastructure and Capital Asset Renewal in 2010/11 are budgeted to be $1,798 million, supported by $151 million in federal infrastructure renewal funding.

Based on principles of sound financial management, Manitoba has been able to increase the assets of the province while maintaining a manageable level of debt. Budget 2010 provides the resources for upgrading Manitoba’s roads and highways, wastewater treatment plants, health facilities across the province, building and restoring much needed social housing and modernizing our post-secondary institutions.

As borrowings may be used to finance capital related projects, net debt may grow in absolute terms from time to time as needed investments in capital assets — like the Red River Floodway, highway infrastructure and economic stimulus investments — are made. It is therefore important to measure change in net debt against the growth of the economy. As a result of the decision to continue to invest in infrastructure projects to create jobs and stimulate the economy, an increase in the net debt to GDP ratio to 26.8% was forecast in Budget 2010.

Core government capital investment details are provided in Appendix III on page 11.

SPECIAL ACCOUNTS

Fiscal Stabilization

The budgeted draw for 2010/11 includes funds advanced by the Government of Canada in previous years for health programming of $25 million and $8 million for requirements related to ecoTrust funds. The balance of the draw reflects the anticipated debt repayment and incremental debt servicing costs for 2010/11. Manitoba’s Five-Year Economic Plan includes using an estimated $600 million of the funds set aside in this Account to retire a portion of the debt and interest expense associated with the core government operating shortfalls during the economic recovery period.

Debt Retirement

The account has been collapsed in 2010/11 and the entire balance of $145 million has been utilized as part of the five-year plan to repay general purpose debt.

Pension Assets

The trust conditions of the funds held in the Pension Asset Fund are irrevocably restricted for pension purposes only. As a result of this restriction, these funds are classified as pension assets and will be accounted for and reported in keeping with GAAP for senior governments.

The fund balance is projected to increase in 2010/11 as a result of the government’s plan to continue addressing the unfunded liability for the Civil Service Superannuation Fund and net investment earnings.

Net investment earnings include the expected rate of return during the year and adjustments to market related value. Under GAAP, market fluctuations of pension assets are not recorded in the year in which they occur but are recognized over the employee average remaining service life (EARSL).

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PROVINCE OF MANITOBA APRIL TO JUNE 2010

PROVINCIAL BORROWINGS, GUARANTEES AND OBLIGATIONS

Manitoba’s borrowing requirement identified in the 2010 Budget was $3.4 billion including refinancing of $1.3 billion and new cash requirements of $2.4 billion, offset by a repayment of $338 million. New cash requirements are required for general Government purposes, capital investments by departments, Manitoba Hydro and for the funding of the unfunded pension liability for the Civil Service Superannuation Plan. Estimated repayments are primarily for general purpose borrowings.

The total outstanding borrowings, guarantees and obligations reflect the province’s gross borrowing obligations, but it does not take into consideration liquid assets available to pay down those obligations.

While the total of outstanding provincial borrowings fluctuates during the fiscal year as a result of the timing of borrowing activities of the province, the year end forecast remains unchanged from that stated in the budget, as shown in the table on the following page.

An updated forecast for 2010/11 with comparative data for 2009/10 actual results will be provided in the second quarter financial report.

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PROVINCE OF MANITOBA APRIL TO JUNE 2010

Provincial Borrowings, Guarantees and Obligations

	2010/11 Budget
	$ millions			$ Per Capita*
Provincial Borrowings, Guarantees and Obligations
General Government Programs		7,093			5,754
General Government Programs — Pensions1		2,355			1,910
Manitoba Hydro		8,574			6,955
Other Crown Organizations		1,587			1,287
Health Facilities		1,182			959
Government Enterprises and Other2		58			47
Capital Investments		2,571			2,086
Subtotal3		23,420			18,998
Other Obligations
Pension Liability		6,565
Pension Asset Fund		(4,777	)
Net Pension Liability		1,788
Debt incurred for and repayable by the Manitoba Hydro Electric Board and Manitoba Lotteries Corporation		(8,564	)
Education and Health Debt held by Government Enterprises		466
Other Debt of Crown Organizations		397
Subtotal		(5,913	)
Total Provincial Borrowings, Guarantees and Obligations		17,507
Adjustments to arrive at Summary Net Debt
Guarantees		(170	)
Net Financial Assets		(3,342	)
Summary Net Debt		13,995			11,339
Summary Net Debt as a percentage of GDP		26.8	%

Notes: Provincial Borrowings, Guarantees and Obligations

1.	In 2010/11, the Government plans to allocate an additional $180 million to address pension obligations for the civil service.
2.	Includes amounts owed relating to federal accounting errors in prior years. See Note 10, page 95 of the 2008/09 Public Accounts for additional information.
3.	Provincial Borrowings and Guarantees are payable in Canadian and U.S. dollars. As at June 30, 2010, total provincial borrowings and guarantees were payable 91% in Canadian dollars and 9% in U.S. dollars. Of this total, General Government Program borrowing and Other Crown organizations borrowings was 100% payable in Canadian dollars. Manitoba Hydro borrowings were payable 73% in Canadian dollars (72% at March 31, 2010) and 27% in U.S. dollars (28% at March 31, 2010).
*	The Per Capita data is based upon population figures as reported in the 2010 Budget.

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PROVINCE OF MANITOBA APRIL TO JUNE 2010

ECONOMIC PERFORMANCE AND OUTLOOK

(Manitoba Economic Highlights — as of September 17, 2010)

Manitoba’s economy contracted by 0.2% in 2009 according to Statistics Canada, better than Canada’s decline of 2.5%. This was the fourth consecutive year in which Manitoba’s economic growth surpassed Canada’s.

In 2009, Manitoba outperformed the national economy in virtually all major economic indicators. As the recovery takes hold in 2010, Manitoba’s economic growth is expected to be lower than the national average.

The Manitoba Finance survey of economic forecasters, conducted September 16, 2010, projects that Manitoba’s real GDP will grow by 2.6% in 2010, below the projected national increase of 3.2%. In 2011, Manitoba’s real GDP is projected to increase 2.8%, slightly ahead of Canada’s projected growth of 2.6%.

Manitoba’s labour market continues to perform favourably in 2010. Through the first eight months of 2010, Manitoba’s employment grew 1.7% compared to the same period in 2009 while Canada’s employment grew 1.4%. Over the past several months, Manitoba’s labour force participation rate has been at record-high levels exceeding 70%, well above the national average. Manitoba’s unemployment rate so far in 2010 is 5.4%, second-lowest among provinces and below the national rate of 8.1%. Manitoba’s youth unemployment rate was 11.3%, also the second lowest in Canada.

Manitobans’ average weekly earnings continue to increase, with 1.6% year-over-year growth through the first six months of 2010. Nationally, average earnings have increased 3.1%. With employment growth and moderate earnings growth, labour income earned in Manitoba advanced 2.7% through the first six months of 2010, below the national increase of 3.3% but up from the 1.9% growth in 2009. Canada’s labour income increased by 0.1% in 2009.

Manitoba’s retail sales rose by 6.2% in the first half of 2010. National retail sales increased 6.1%. The number of new car sales has increased 4.9% through July, below the national increase of 8.6%.

After declining by 24.6% in 2009, Manitoba housing starts increased by 49.4% in the first half of 2010 relative to the same period in the previous year. Housing starts in major urban centres is up 55.9% through the first eight months of 2010, with single family construction up 31.5% while multiple unit construction has doubled.

The strong value of the Canadian dollar and continued weakness in the U.S. market have constrained Manitoba’s manufacturing sales in 2010. Manitoba’s manufacturers’ sales declined 6.7% in the first half of the year after a 10.7% decline in 2009.

The lower value of exports of manufactured goods is a principal factor in the overall year-over-year decline in Manitoba’s merchandise exports this year. Through July, the value of exports has declined 11.1%. Manitoba exports to the U.S. are down 12.4% while non-U.S. exports declined 8.3%. The value of Canada’s exports has increased 10.4% through the same period, rebounding from a 26.5% contraction in 2009. Manitoba’s foreign merchandise exports declined 18.2% in 2009.

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PROVINCE OF MANITOBA APRIL TO JUNE 2010

Manitoba’s farm cash receipts declined 4.4% in the first quarter of 2010 compared to a 12.3% national decline. Manitoba’s receipts from crops fell 6.9% while livestock receipts declined 8.8%. Some of these declines were offset by increased support through insurance and other support programs.

The Consumer Price Index rose 0.8% in Manitoba and 1.6% in Canada so far this year.

On April 1 of this year, Manitoba’s population reached 1,232,654, an annual increase of 16,517 persons. The year-over-year gain in population is Manitoba’s highest in at least 38 years. Population grew 1.4%, from the previous year, ahead of Canada’s increase of 1.2%. Improvements in both interprovincial and international migration significantly contributed to Manitoba’s population growth performance. International migration to Manitoba continued at a relatively strong pace, with the highest level of immigration since at least 1971 (when the current population data series was established). About three-quarters of international immigrants to Manitoba are admitted under the Provincial Nominee Program.

For updates and more details please see the Manitoba Economic Highlights at: http://www.gov.mb.ca/finance/pdf/highlights.pdf

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PROVINCE OF MANITOBA APRIL TO JUNE 2010

2010/11 Core Government Revenue by Source	Appendix I
UNAUDITED

	Year-to-Date to June 30									Full Year
	2010/11							2009/10		2010/11
($000s)	Actual		Estimated		Variance			Actual		Budget
Income taxes
Individual Income Tax		604,389		604,375		14			585,112		2,420,500
Corporation Income Tax		63,810		63,810		—			71,802		246,900
Subtotal: Income Taxes		668,199		668,185		14			656,914		2,667,400
Other Taxes
Corporations Taxes		60,564		52,850		7,714			68,458		196,200
Gasoline Tax		22,676		22,700		(24	)		22,161		141,300
Land Transfer Tax		14,500		12,600		1,900			13,261		51,000
Levy for Health and Education		59,191		58,900		291			57,956		377,650
Mining Tax		3,480		2,652		828			—		6,000
Motive Fuel Tax		13,202		12,200		1,002			11,713		88,600
Retail Sales Tax		252,531		264,700		(12,169	)		248,899		1,668,600
Tobacco Tax		39,602		37,000		2,602			34,258		225,000
Other Taxes		2,504		2,251		253			2,018		10,948
Subtotal: Other Taxes		468,250		465,853		2,397			458,724		2,765,298
Fees and Other Revenue
Fines and Costs and Other Legal		12,008		12,895		(887	)		9,029		50,190
Minerals and Petroleum		8,510		2,455		6,055			4,171		12,261
Automobile and Motor Carrier Licences and Fees		36,039		30,000		6,039			35,925		118,026
Parks: Forestry and Other Conservation		3,819		3,202		617			6,265		30,144
Water Power Rentals		24,120		27,498		(3,378	)		27,380		110,000
Service Fees and Other Miscellaneous Charges		24,573		20,239		4,334			19,502		128,509
Revenue Sharing from SOAs		6,358		6,358		—			5,970		25,430
Subtotal: Fees and Other Revenue		115,427		102,647		12,780			108,242		474,560
Federal Transfers
Equalization		456,506		456,506		—			515,849		2,001,500
Canada Health Transfer (CHT)		238,340		238,340		—			225,831		953,358
Canada Social Transfer (CST)		101,174		101,174		—			98,085		404,698
Health Funds		2,540		2,259		281			4,436		9,038
Infrastructure Renewal		—		—		—			—		150,822
Manitoba Floodway Expansion		—		4,000		(4,000	)		—		39,869
Shared Cost and Other Transfers		26,254		40,215		(13,961	)		31,812		191,610
Subtotal: Federal Transfers		824,814		842,494		(17,680	)		876,013		3,750,895
Net Income of Government
Business Enterprises (GBEs)
Manitoba Liquor Control Commission		15,700		15,700		—			12,100		246,800
Manitoba Lotteries Corporation		76,750		76,750		—			77,900		312,700
Subtotal: Net Income of GBEs		92,450		92,450		—			90,000		559,500
Total Revenue		2,169,140		2,171,629		(2,489	)		2,189,893		10,217,653

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PROVINCE OF MANITOBA APRIL TO JUNE 2010

2010/11 Core Government Expenditure by Sector/Department	Appendix II
UNAUDITED

	Year-to-Date to June 30												Full Year
	2010/11									2009/10			2010/11
($000s)	Actual			Estimated			Variance			Actual1			Budget2
Health and Healthy Living
Health		1,125,409			1,159,441			(34,032	)		1,092,221			4,677,818
Healthy Living, Youth and Seniors		16,809			19,476			(2,667	)		18,002			76,568
Total Health and Healthy Living		1,142,218			1,178,917			(36,699	)		1,110,223			4,754,386
Education
Advanced Education and Literacy		122,191			121,062			1,129			117,577			626,996
Education		531,669			532,650			(981	)		509,756			1,506,790
Total Education		653,860			653,712			148			627,333			2,133,786
Family Services and Consumer Affairs		320,144			317,425			2,719			299,534			1,306,561
Community, Economic and Resource Development
Aboriginal and Northern Affairs		8,628			9,697			(1,069	)		10,510			37,357
Agriculture, Food and Rural Initiatives		16,105			16,242			(137	)		16,644			216,909
Conservation		28,913			31,473			(2,560	)		30,554			128,338
Entrepreneurship, Training and Trade		28,684			31,802			(3,118	)		24,124			150,493
Housing and Community Development		15,859			16,567			(708	)		14,380			72,336
Infrastructure and Transportation		115,607			118,279			(2,672	)		114,151			629,506
Innovation, Energy and Mines		18,341			30,252			(11,911	)		21,095			73,478
Local Government		27,023			37,672			(10,649	)		25,845			256,581
Water Stewardship		7,032			8,217			(1,185	)		6,975			34,142
Total Community, Economic and Resource Development		266,192			300,201			(34,009	)		264,278			1,599,140
Justice and Other Expenditures
Legislative Assembly		8,817			9,467			(650	)		8,530			38,990
Executive Council		828			834			(6	)		1,086			3,827
Civil Service Commission		4,412			4,567			(155	)		4,872			20,880
Culture, Heritage and Tourism		20,147			21,045			(898	)		21,434			63,370
Employee Pensions and Other Costs		(1,033	)		(1,090	)		57			(1,735	)		18,060
Finance		30,698			31,015			(317	)		30,737			90,284
Justice		68,530			69,843			(1,313	)		66,015			407,052
Labour and Immigration		11,125			10,751			374			9,888			61,083
Sport		2,729			2,715			14			2,669			11,919
Enabling Appropriations		221			1,632			(1,411	)		415			14,303
Other Appropriations		5,770			3,619			2,151			5,010			30,151
Total Justice and Other Expenditures		152,244			154,398			(2,154	)		148,921			759,919
Less: Year-End Lapse		—			—			—			—			(65,000	)
Debt Servicing Costs		38,550			35,431			3,119			34,719			265,785
Total Expenditure		2,573,208			2,640,084			(66,876	)		2,485,008			10,754,577

1.	For comparative purposes the 2009/10 Actual has been re-stated to reflect the November 2009 reorganization.
2.	Budget figures are adjusted to include Enabling Appropriations

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PROVINCE OF MANITOBA APRIL TO JUNE 2010

2010/11 Core Government Capital Investment	Appendix III
UNAUDITED

	Year-to-Date to June 30									Full Year
	2010/11							2009/10		2010/11
($000s)	Actual		Estimated		Variance			Actual		Budget
General Assets
Government Services Capital Projects		21,762		26,687		(4,925	)		6,198		160,482
Transportation Equipment and Aircraft		6,545		8,112		(1,567	)		1,928		58,814
Information Technology Projects		1,361		4,783		(3,422	)		860		23,181
Other Equipment and Buildings		116		327		(211	)		—		6,722
		29,784		39,909		(10,125	)		8,986		249,199
Infrastructure Assets
Provincial Roads, Highways and Airport Infrastructure		58,223		42,100		16,123			33,430		367,075
Manitoba Floodway Expansion		15,000		21,000		(6,000	)		5,000		153,565
Water Control Infrastructure		251		750		(499	)		759		10,600
Parks, Cottage and Camping Projects		724		770		(46	)		668		16,757
		74,198		64,620		9,578			39,857		547,997
Total Capital Investment		103,982		104,529		(547	)		48,843		797,196

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