Manitoba deficit now pegged at $394 million

The Manitoba government's projected deficit is still higher than expected, but has been trimmed a bit in recent months.

The government's third-quarter financial report estimates the deficit for the fiscal year that ends next month will come in at $394 million.

That's $37 million more than originally predicted in last spring's budget, but down $8 million from the last fiscal update in December.

Finance Minister Greg Dewar says there are ongoing spending pressures in health care and child welfare, as well as flood compensation being paid out for last year's heavy rains in western Manitoba.

The government has promised to balance the budget in two years, although Dewar and Premier Greg Selinger have said they will not do that if it requires deep spending cuts to government programs.