Manitoba is bleeding a little less red ink than expected this year, government figures show.

However, the cost of battling this year's "unprecedented flooding" is putting added pressure government finances, a report from the Department of Finance says.

The province is heading for a deficit of $490 million, $102 million less than forecast in the spring budget, the report says.

Revenues have been up slightly, the government said, while spending on health, education and other areas has come in under budget.

The total cost of the flooding, more than $730 million, includes:

  • $555 million to raise dikes, repair roads, fund the emergency channel under construction at Lake St. Martin and provide financial compensation to homeowners, businesses, municipalities and First Nations communities that suffered damage.
  • $177 million in compensation for farmers who lost their crop season.

The province expects the federal government to cover most of those costs, with the provincial portion of the tab expected to be about $154 million. The provincial government has issued a special warrant that gives it authority to exceed the spending approved in the spring budget.

The overall figures, which cover the first quarter of the 2011-12 fiscal year, will be updated three more times before the final numbers are in.