Thank you, Minister. We have agreed to begin with general comments. Does the Minister of Finance wish to bring witnesses into the House?

Yes, please, Madam Chair.

Thank you. Sergeant-at-Arms, please escort the witnesses to the Chamber.

Minister, please introduce your witnesses.

Madam Chair, thank you. I have deputy minister of Finance Bill MacKay on my left and Terence Courtoreille, the deputy secretary to the Financial Management Board on my right.

Thank you. I will now open the floor to general comments. Member for Frame Lake.

Yes, thanks, Madam Chair. Yes, I have some questions about what's in here and also something that's not in here.

So I'd like to start by acknowledging that the Minister has carried through with her commitments, as I fully expected, in terms of some increased spending that we had negotiated as part of the budget discussions earlier this year. There is extra money in here for housing, $4 million; $2.2 million for shelter funding; an increase of half a million dollars for heritage centres; there's some reductions in contracted services, but the area that's not covered in the supplementary appropriation is the increased revenues from a tobacco tax increase.

So can the Minister tell us why that's not included in the supplementary appropriation. I'll start with that. Thanks, Madam Chair.

Thank you, Member. Minister of Finance.

Thank you, Madam Chair. Madam Chair, it does require a regulatory change and so that is being worked on at present. And we are expecting that those regulations should be implemented by August the 1st. Thank you, Madam Chair.

Thank you. Member for Frame Lake.

Okay, thanks, Madam Chair, and thanks to the Minister for that. So we passed the budget on -- and received assent I think on March 31st, so April, May, June, July, August - five months. Is there no way that we can do this a little bit quicker next time? Thanks, Madam Chair.

Thank you. Minister of Finance.

Thank you, Madam Chair. So Madam Chair, these things do take a bit of time. I mean, the commitment was made at the time of budgeting but then, you know, it does have to get -- the drafting has to get put through the Department of Justice, as well as ourselves, and in this case, there is an element where we rely on Manitoba for the -- it's not quite a sticker, Madam Chair, but essentially it's something to that effect. So there's just a few steps to be taken. We knew it wouldn't be immediate.

And Madam Chair, I'm having trouble hearing but I gather there was a question as well with respect to needing to bring back a further sup to appropriate revenue. We don't need to appropriate the revenue. It would come in by way of it being revenue. Thank you.

Thank you, Minister. Member for Frame Lake.

Yes, okay, thanks, Madam Chair, and thanks to the Minister. I'm sure I don't have to remind her that every day we wait for the tobacco tax increases, money that's not captured, but.

I want to move on to the supplementary reserve. Can someone tell me what that was originally set at and where it will stand as a result of this set of supplementary estimates. Thanks, Madam Chair.

Thank you, Member. Minister of Finance.

Thank you, Madam Chair. So Madam Chair, this year we had set aside -- not set aside but had created a supplementary reserve of $35 million. We are down to 10.754 after this.

Thank you. Member for Frame Lake.

Yes, thanks, Madam Chair. So this is the first of a supplementary appropriation for the current fiscal year, and I expect that there's probably going to be at least two, maybe three more. What happens when we exceed that reserve amount and what does it mean? Thanks, Madam Chair.

Thank you. Minister of Finance.

Thank you, Madam Chair. Madam Chair, it's an excellent question. I'm happy to answer it although the news isn't necessarily good.

If we exceed the supplementary reserve, essentially what we are likely to be doing is any projected surplus would likely get dipped into in a sense. So if there was a projected surplus and we run out of supplementary needs and we continue to have more needs, then we're likely eating into that projected surplus. Thank you, Madam Chair.

Thank you, Minister. Member for Frame Lake.

Thanks, Madam Chair, and as we eat into the supplementary reserve, that means that there's less money for capital projects, the capital budget, which we're going to get to, moving forward as a result of the fiscal responsibility policies; is that correct? Thanks, Madam Chair.

Thank you, Member. Minister of Finance.

Thank you, Madam Chair. So yes, you'll recall the Fiscal Responsibility Policy requires that 50 percent of our capital budget is funded through supplementary -- or from operations surpluses. So yes, if there's less surplus available, then there'd be less money to spend in compliance with that policy. Thank you.