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

Exhibit 99.1

  Focused on what matters most to families

Province of Manitoba

2013/14 Quarterly Financial Report

April to June 2013

CONTENTS

Introduction

Quarterly Financial Results

Economic Performance and Outlook

INTRODUCTION   Budget 2013 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 (PSAB) and fully reflects Generally Accepted Accounting Principles (GAAP).   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, 2013. 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.

- 1 -

PROVINCE OF MANITOBA APRIL TO JUNE 2013

GOVERNMENT REPORTING ENTITY (GRE)

Manitoba continues to be committed to a balanced approach for delivering services while recognizing the continued uncertainty in global economies. This approach is demonstrated by the protection of the services Manitoba families need and by making strategic investments in infrastructure to support economic growth and provide for the services Manitobans require in the future. While private sector forecasters expect Manitoba’s overall economic growth to remain comparatively stable among provinces, pressures in supports for vulnerable persons and public safety remain challenging. Hot, dry conditions in northern Manitoba this summer have led to additional expenditures for forest fire suppression with the costs of delivery continuing to be assessed.

The impact of these pressures will continue to be closely monitored and more complete information on expenditure and revenue will provide the basis for a year end projection in the second quarter report.

Budgeted Summary Net Income/(Loss)

For the Fiscal Year Ending March 31, 2014

UNAUDITED

	2013/14 Budget
(Millions of Dollars)	Core Government		Consolidation Impacts and Other Reporting Entities		Summary
Revenue		11,524		2,685		14,209
Expenditure		12,099		2,778		14,877
In-Year Adjustment/Lapse		(70)		(80)		(150)
NET INCOME (LOSS)		(505)		(13)		(518)

- 2 -

PROVINCE OF MANITOBA APRIL TO JUNE 2013

QUARTERLY FINANCIAL RESULTS

The unaudited net result of the Government Reporting Entity for the first three months of the fiscal year is a loss of $128 million.

The three-month positive revenue variance of $51 million is primarily due to higher than estimated Retail Sales Tax and Government Business Enterprise net income.

The expenditure variance of $(74) million is primarily the result of timing.

Government Reporting Entity Operating Statement

UNAUDITED

	Year-to-Date to June 30
	2013/14						2012/13
($000s)	Actual		Estimated		Variance		Actual1
Revenue
Income Taxes		928,953		928,953		-		792,656
Other Taxes		802,391		761,072		41,319		723,236
Fees and Other Revenue		488,375		491,796		(3,421)		353,712
Federal Transfers		999,826		1,001,965		(2,139)		945,839
Net Income of Government
Business Enterprises		115,223		97,341		17,882		139,948
Sinking Funds and Other Earnings		61,272		63,441		(2,169)		50,900
Total Revenue		3,396,040		3,344,568		51,472		3,006,291
Expenditure
Health and Healthy Living		1,553,228		1,539,248		13,980		1,301,130
Education		912,510		923,098		(10,588)		1,051,925
Family Services		264,799		279,537		(14,738)		257,349
Community, Economic and
Resource Development		455,042		499,893		(44,851)		467,298
Justice and Other Expenditures		195,921		213,568		(17,647)		206,337
Debt Servicing Costs		142,582		142,248		334		149,897
Total Expenditure		3,524,082		3,597,592		(73,511)		3,433,936
NET INCOME (LOSS)		(128,042)		(253,024)		124,983		(427,645)

1. For comparative purposes the 2012/13 Actual has been re-stated to reflect the 2013/14 appropriation structure.

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

- 3 -

PROVINCE OF MANITOBA APRIL TO JUNE 2013

INFRASTRUCTURE AND CAPITAL ASSET RENEWAL

Expenditures for infrastructure and capital asset renewal in 2013/14 are budgeted to be $1.8 billion to support continued economic growth, reduce the maintenance burden and provide for the services Manitobans need in the future.

Based on principles of sound financial management, the government has been able to increase the assets of the province while maintaining a manageable level of debt. Budget 2013 provides the resources to invest in much needed flood-related and other infrastructure to meet the needs of Manitoba into the future. This includes upgrading roads and highways, wastewater treatment plants, health facilities across the province, building and restoring much needed social housing and modernizing our schools and 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 highway infrastructure, schools and hospitals – 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, Budget 2013 projected the net debt to GDP ratio at 28.7%.

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

SPECIAL ACCOUNTS

Fiscal Stabilization

Manitoba’s balanced financial strategy maintains the legislated requirement to dedicate at least $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 incurred during the economic recovery period. In 2013/14, $100 million will be withdrawn for debt repayment.

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 2013/14 for 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).

- 4 -

PROVINCE OF MANITOBA APRIL TO JUNE 2013

PROVINCIAL BORROWINGS, GUARANTEES AND OBLIGATIONS

Manitoba’s borrowing requirement identified in Budget 2013 was $4.8 billion including refinancing of $2.2 billion and new cash requirements, net of estimated repayments, of $2.6 billion.

New cash requirements are necessary for general government purposes, capital investments by departments, health facilities, post-secondary institutions and Manitoba Hydro. Estimated repayments are primarily for departmental capital investment and general purpose borrowings.

The total of 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 2013/14 with comparative data for 2012/13 actual results will be provided in the second quarter report.

- 5 -

PROVINCE OF MANITOBA APRIL TO JUNE 2013

Provincial Borrowings, Guarantees and Obligations

	2013/14 Budget
Provincial Borrowings, Guarantees and Obligations1	$ millions		$ Per Capita*
General Government Programs		8,659		6,755
General Government Programs – Pension Liability		2,595		2,024
The Manitoba Hydro-Electric Board		11,046		8,617
Other Crown Organizations		2,397		1,870
Health Facilities		1,314		1,025
Other		17		13
Capital Investments		4,089		3,190
Subtotal2		30,117		23,494
Other Obligations
Pension Liability		7,264
Pension Asset Fund		(5,266)
Net Pension Liability		1,998
Debt incurred for and repayable by The Manitoba Hydro-Electric Board		(10,698)
Education and Health Debt held by Government Enterprises		535
Other Debt of Crown Organizations		266
Subtotal		(7,899)
Total Provincial Borrowings, Guarantees and Obligations		22,218
Adjustments to arrive at Summary Net Debt
Guarantees		(351)
Net Financial Assets		(4,113)
Summary Net Debt3		17,754		13,850
Summary Net Debt as a percentage of GDP		28.7%

Notes: Provincial Borrowings, Guarantees and Obligations

1. Provincial borrowings, guarantees and obligations are net of sinking funds.

2. Provincial Borrowings and Guarantees are payable in Canadian and U.S. dollars. As at June 30, 2013, total provincial borrowings and guarantees were payable 94% in Canadian dollars and 6% 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 83% in Canadian dollars (79% at March 31, 2013) and 17% in U.S. dollars (21% at March 31, 2013).

* The per capita data for 2013/14 is based upon forecast population figures for July 1, 2013.

- 6 -

PROVINCE OF MANITOBA APRIL TO JUNE 2013

ECONOMIC PERFORMANCE AND OUTLOOK

Following two years of unfavorable weather conditions including severe flooding in 2011, agricultural production sharply rebounded in 2012, lifting real GDP growth to 2.7%. As a result, overall growth in Manitoba was second strongest among provinces. Most other industrial sectors in the province grew at a modest pace reflecting slower global demand in 2012.

The sustainability of the U.S. recovery, the recession in Europe and slow growth in Asia continue to overshadow the near term outlook for Canada. However, real GDP growth in Manitoba is expected to remain stable and progressively improve, reflecting its industrial diversity and balance.

A recent Manitoba Finance survey of economic forecasters projects that Manitoba`s real GDP will expand 1.9% this year, slightly above the projected national increase of 1.7%. In 2014, Manitoba’s real GDP is expected to increase by 2.3%, marginally below the projected national increase of 2.4%.

A review of major economic indicators shows modest improvements in economic developments in Manitoba through the first half of 2013.

The pace of employment growth in Manitoba has improved in 2013, increasing by 1.1% on year-to-date growth. This follows 0.9% growth in 2012 and 0.8% growth in 2011. Private sector employment is up 1.9% in 2013 while public sector employment is down 1.4%.

The unemployment rate has averaged 5.3% in 2013, third-lowest among provinces and below the national rate of 7.1%. Manitoba’s youth unemployment rate has averaged 10.6% in 2013, down from 11.0% in 2012.

Average weekly earnings are up 1.0% so far in 2013. In the first six months of 2013, compensation of employees (labour income) is up 3.2%, fifth among provinces and below the national increase of 3.9%.

Retail activity continues to expand at a modest rate, averaging 2.5% growth in the first half of 2013. National retail sales increased 1.6% over the same period. Manitoba’s increase is fourth-highest among provinces. Automotive sales in the province are up 11.5% in 2013, the highest among provinces and above the 1.7% national increase.

Manitoba’s economy has benefitted from a sharp increase in capital spending. For the past twenty-one years, private sector capital spending has consistently increased in all but one year, the steadiest growth among provinces. According to the Statistics Canada survey, Manitoba’s total capital investment is expected to increase 8.5% in 2013, above the Canadian increase of 1.7%. Manitoba’s private investment is projected to increase 6.3% and public investment to increase 12.9%.

Investment in residential construction is robust in Manitoba. During the first eight months of 2013, Manitoba urban area housing starts increased 10.8%, best among provinces and better than the 16.5% national decline. Single starts were up 3.1% and multiples starts are up 18.8%. Urban housing starts represent about two-thirds of all starts in the province.

Influenced by weak global demand, Manitoba’s manufacturing sales have decreased 0.3% in 2013, better than the national decrease of 2.7% and ranked fifth among provinces. Sales of wood, machinery, food, and chemicals are leading growth while electrical appliances, fabricated metals, and printing lag growth.

- 7 -

PROVINCE OF MANITOBA APRIL TO JUNE 2013

An improvement in U.S. housing sector has helped buoy Manitoba exports. Through July 2013, Manitoba exports increased 2.0% compared to a 4.8% contraction in 2012. Manitoba’s U.S. exports increased 6.8% while non-U.S. exports were down 7.7%.

In 2012, Agricultural production rebounded to record 14.8% growth, following poor performance in 2011 caused by the impacts of the Assiniboine River flood. Wheat production increased 76.0%, and canola gained 20.3%. Production of corn for grain doubled, making it the third-largest crop in Manitoba in 2012. Soybean production spiked 83.5%, while production of barley more than doubled, up 136.6%, and oat harvests were 31.8% higher than in 2011.

Related to the rebound in crop production, Manitoba’s farm cash receipts are up 13.4% in the first quarter of 2013, the highest among provinces. Crop receipts increased 29.0% with gains in oilseeds 36.8%, wheat 60.9% and specialty crops 117.4%. Livestock receipts were down 3.1% with strength in cattle offset by weakness in hogs; down 10.7%. Direct payments, which include insurance and various types of income supports, decreased 18.4%.

The Consumer Price Index has increased by 2.2% on a year-to-date basis in 2013, above the national increase of 0.9%. For 2013, Manitoba Finance’s survey of economic forecasts indicates CPI inflation will average about 2.0% in Manitoba, closely matching the year-to-date estimates.

Manitoba’s population has experienced healthy growth over the past 10 years. Over the last decade, immigration levels to the province have risen considerably, net interprovincial out-migration has decreased and the number of births has increased. In 2012, estimated population increased by 1.2%.

As of April 1, 2013, Manitoba’s population stood at 1,277,339 an increase of 14,593 persons and a 12 month increase of 1.2%.

For monthly updates and more details please see the Manitoba Economic Highlights and Statistics at:

http://www.gov.mb.ca/finance/pdf/highlights.pdf

&

http://www.gov.mb.ca/finance/pdf/statistics.pdf

- 8 -

PROVINCE OF MANITOBA APRIL TO JUNE 2013

2013/14 Core Government Revenue by Source UNAUDITED Appendix I

	Year-to-Date to June 30									Full Year
	2013/14							2012/13 Actual		2013/14
($000s)	Actual		Estimated		Variance					Budget
Income taxes
Individual Income Tax		724,342		724,342		-			691,862		2,952,400
Corporation Income Tax		204,611		204,611		-			100,794		413,200
Subtotal: Income Taxes		928,953		928,953		-			792,656		3,365,600
Other Taxes
Corporations Taxes		51,828		51,828		-			47,140		227,000
Fuel Taxes		80,936		77,166		3,770			71,863		312,100
Land Transfer Tax		21,949		21,949		-			18,339		74,000
Levy for Health and Education		101,780		98,962		2,818			99,714		433,500
Mining Tax		9,045		9,045		-			13,616		40,000
Retail Sales Tax		481,591		452,232		29,359			428,896		2,047,200
Tobacco Tax		76,552		72,723		3,829			62,459		283,000
Other Taxes		2,123		610		1,513			2,509		16,173
Subtotal: Other Taxes		825,804		784,515		41,289			744,536		3,432,973
Fees and Other Revenue
Fines and Costs and Other Legal		12,828		12,828		-			12,091		52,030
Minerals and Petroleum		4,188		4,188		-			7,676		29,074
Automobile and Motor Carrier Licences and Fees		38,769		38,769		-			38,248		140,530
Parks: Forestry and Other Conservation		3,808		3,808		-			3,681		33,568
Water Power Rentals		29,763		29,763		-			16,913		107,700
Service Fees and Other Miscellaneous Charges		21,112		19,428		1,684			21,520		165,074
Revenue Sharing from SOAs		3,982		3,982		-			6,358		16,880
Subtotal: Fees and Other Revenue		114,450		112,766		1,684			106,487		544,856
Federal Transfers
Equalization		448,078		448,078		-			417,667		1,799,228
Canada Health Transfer (CHT)		280,210		280,210		-			265,614		1,120,800
Canada Social Transfer (CST)		110,688		110,688		-			107,298		442,753
Health Funds		2,265		2,265		-			2,262		9,062
Infrastructure Renewal		-		-		-			-		22,100
Shared Cost and Other Transfers		24,087		24,782		(695	)		33,127		171,403
Subtotal: Federal Transfers		865,328		866,023		(695	)		825,968		3,565,346
Net Income of Government
Business Enterprises (GBEs)
Manitoba Liquor Control Commission		106,000		106,000		-			96,000		615,055
Manitoba Lotteries Corporation		-		-		-			-		-
Subtotal: Net Income of GBEs		106,000		106,000		-			96,000		615,055
Total Revenue		2,840,535		2,798,257		42,278			2,565,647		11,523,830

- 9 -

PROVINCE OF MANITOBA APRIL TO JUNE 2013

2013/14 Core Government Expenditure by Sector/Department UNAUDITED Appendix II

	Year-to-Date to June 30								Full Year
	2013/14						2012/13		2013/14
($000s)	Actual		Estimated		Variance		Actual1		Budget2
Health and Healthy Living
Health		1,445,351		1,430,443		14,908		1,320,101		5,230,778
Healthy Living, Seniors and Consumer Affairs		16,999		17,965		(966)		15,753		55,646
Total Health and Healthy Living		1,462,350		1,448,408		13,942		1,335,854		5,286,424
Education
Advanced Education and Literacy		131,819		133,224		(1,405)		133,297		707,662
Education		545,115		545,620		(505)		533,754		1,681,786
Total Education		676,934		678,844		(1,910)		667,051		2,389,448
Family Services
Children and Youth Opportunities		13,404		14,768		(1,364)		12,993		48,888
Family Services and Labour		254,618		267,999		(13,381)		247,728		1,099,032
Total Family Services		268,022		282,767		(14,745)		260,721		1,147,920
Community, Economic and Resource Development
Aboriginal and Northern Affairs		9,109		11,689		(2,580)		10,514		34,249
Agriculture, Food and Rural Initiatives		14,527		18,726		(4,199)		16,815		215,051
Conservation and Water Stewardship		37,169		43,338		(6,169)		39,323		147,637
Entrepreneurship, Training and Trade		140,484		152,961		(12,477)		136,209		585,718
Housing and Community Development		26,446		25,558		888		24,667		82,587
Infrastructure and Transportation		148,904		147,583		1,321		156,197		639,203
Innovation, Energy and Mines		31,494		33,785		(2,291)		25,915		85,736
Local Government		28,979		38,604		(9,625)		53,802		398,678
Total Community, Economic and Resource Development		437,112		472,244		(35,132)		463,442		2,188,859
Justice and Other Expenditures
Legislative Assembly		10,382		10,896		(514)		8,968		42,560
Executive Council		1,651		1,654		(3)		1,622		3,622
Civil Service Commission		5,074		6,279		(1,205)		5,182		20,200
Culture, Heritage and Tourism		20,836		22,190		(1,354)		17,303		60,987
Employee Pensions and Other Costs		(2,619)		(3,634)		1,015		(1,861)		18,288
Finance		17,183		20,114		(2,931)		15,683		70,088
Immigration and Multiculturalism		4,856		7,233		(2,377)		7,477		21,001
Justice		96,057		104,021		(7,964)		89,580		508,336
Sport		3,003		3,041		(38)		3,009		11,770
Enabling Appropriations		1,593		2,454		(861)		1,504		43,987
Other Appropriations		18,569		20,000		(1,431)		39,504		55,393
Total Justice and Other Expenditures		176,585		194,248		(17,663)		187,971		856,232
Debt Servicing Costs		(9,589)		(9,923)		334		26,800		230,000
Total Expenditure		3,011,414		3,066,588		(55,174)		2,941,839		12,098,883
Subtract: Total Revenue Estimate (Appendix I)		2,840,535		2,798,257		42,278		2,565,647		11,523,830
In-Year Adjustment/Lapse		-		-		-		-		(70,000)
NET INCOME (LOSS)		(170,879)		(268,331)		97,452		(376,192)		(505,053)

1. For comparative purposes the 2012/13 Actual has been re-stated to reflect the 2013/14 appropriation structure.

2. Budget figures are adjusted to include Enabling Appropriations.

- 10 -

PROVINCE OF MANITOBA APRIL TO JUNE 2013

2013/14 Core Government Capital Investment UNAUDITED Appendix III

	Year-to-Date to June 30								Full Year
	2013/14						2012/13 Actual		2013/14
($000s)	Actual		Estimated		Variance				Budget1
General Assets
Government Services Capital Projects		9,779		15,581		(5,802)		15,581		112,000
Transportation Equipment and Aircraft		398		1,600		(1,202)		1,267		16,920
Information Technology Projects		704		5,843		(5,139)		354		23,744
Other Equipment and Buildings		402		4,875		(4,473)		15		19,582
		11,283		27,899		(16,616)		17,217		172,246
Infrastructure Assets
Provincial Roads, Highways and Airport Infrastructure		33,411		34,000		(589)		32,482		470,510
Water Related Infrastructure		7,272		12,000		(4,728)		10,447		37,100
Parks, Cottage and Camping Projects		520		3,100		(2,580)		1,107		15,839
		41,203		49,100		(7,897)		44,036		523,449
Total Capital Investment		52,486		76,999		(24,513)		61,253		695,695

1. Budget figures are adjusted to include Enabling Appropriations.

- 11 -