Manitobans hoping for a break in the flooding disaster got more bad news on Wednesday, as officials said there's a new crisis area in the flood zone, along the Portage Diversion where the west bank of the channel dike has been seeping and needs major repair.

That could have a ripple effect along the Assiniboine River, said Steve Ashton, the minister of emergency measures.

"The real issue here is whether we can repair it without drawing down the Portage Diversion," Ashton said. "If we draw down the Portage Diversion, that will reduce the flows through."

Soldiers are doing their best to plug the dike, said Steve Topping of Manitoba Water Stewardship.

"It is key on the progress that the military makes today on that," he told CBC News. "We could not get equipment in there — heavy equipment — because of the seepage zone, so that's going to be the issue."

No place like home

The floodwaters are still a long way off from cresting on Lake Manitoba, the Fairford River and Lake St. Martin, and that could mean months away from home for those who have had to leave.

For residents such as Rhonda Beardy, the wait is becoming painful. The university student from the Lake St. Martin First Nation, who has taken to eating her meals at a restaurant in a gas station in Ashern, tries to study to keep her mind off what's happening.

"It's actually pretty hard, yeah, because you're going to school and then you're thinking of back home and your belongings," she told CBC News.

She said her biggest worry is for the First Nation's elders such as Ruth Anderson, 81. She uses a wheelchair and is spending her days at the Interlake Hotel in Ashern.

"I miss my place, I miss my home," Anderson said, adding she has been told she could be away from her home in Fairford until October.

Nine farmhouses, whose owners have already left, are at immediate risk, but the problem could have a ripple effect along the Assiniboine because flows on the diversion may have to be lowered.

That could force officials to increase flows through the controlled breach on the Hoop and Holler Bend, Ashton said.

Earlier Wednesday, the City of Brandon extended its local state of emergency amid continuing flood risks.

In a special city council meeting, councillors voted unanimously to extend the state of emergency until June 4 from the existing May 21 deadline. The extension gives the city power to evacuate areas if another risk of flooding occurs.

The city also voted to cancel penalties for all unpaid city taxes up to July 31 for all homes and businesses in Brandon, which will give businesses and homeowners some breathing room.

The decision comes even as the Assiniboine River in Brandon has dropped another 15 centimetres since Tuesday. However, the city's emergency co-ordinator warned that the water levels are still above the 100-year flood level and the current is still moving very fast.

Few answers

On Tuesday, Brandon business owners crowded a chamber of commerce meeting for an update on the flood, but left with little new information.

The owners of some 75 businesses in the flood zone that were forced to close last week were seeking answers from the city's mayor about compensation and when they could resume business once again.

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Peter Bradley walks through the floodwaters in front of his home in Twin Beach, Man., where water levels are at historic highs. (Ryan Remiorz/Canadian Press)

But Mayor Shari Decter Hirst provided few answers to their questions.

"We haven't got any answers tonight, as frustrating as that is," she said. "But we're trying really hard to get you back in your businesses as soon as we can."

The mayor said that until the water goes down even farther, business owners are going to have to continue to contend with losses of revenue and staff.

On Tuesday, Emergency Measures Minister Steve Ashton said the bill for widespread property damage has already been more than $200 million — and that doesn't include massive post-flood damages that can only be tallied later.

"It's early to really start to get into specific numbers," he added.

About 3,600 people have been displaced from their homes due to flooding or the threat of flooding, and 97 homes have been damaged — mostly flooded basements. But the cost to infrastructure — hundreds of roads are closed and washed out — and to the overall provincial economy in terms of lost production can only be calculated later.

Compensation coming

In another development, the government is expected to announce a compensation package late this week or early next week to outline exactly what kind of reimbursement will be given to residents.

The government has talked in broad strokes about offering special compensation to restore land and cover all damages, especially for agricultural producers and businesses.

But Premier Greg Selinger was unable to say Tuesday whether residential property owners would be fully compensated.

"The final details of that are being worked out," Selinger said.

"I think the challenge here is … treat people fairly, and we'll have to take those kind of things into account."

With files from The Canadian Press