Manitoba's quarterly update says the province's deficit is less than expected at $485 million.
That's about $33 million less than forecast in last spring's budget.
The update released Friday said the government has taken in $41 million more than it expected in revenue, but is still feeling the pinch in public safety costs, social programs and forest-fire-fighting expenses.
Finance Minister Jennifer Howard said the province continues to be "on track." But she has also said Statistics Canada undercounted Manitoba's population by 18,000 — costing the province $37 million in federal transfer payments this year.
"Higher projections for both corporate and individual income tax and the one-time revenue associated with the completion of the sale of the property registry were offset by lower lottery revenues and a decrease in federal health and social transfers as a result of Statistics Canada's downward revision to Manitoba's estimated population numbers," the update said.
Statistics Canada has said it stands by the province's population as calculated in the 2011 census.
The province estimates the alleged population discrepancy will cost Manitoba $100 million a year. Howard has said the decrease in revenue will make it a challenge for Manitoba to fulfil its pledge to balance the books by 2016.
The update says the province is reviewing ways to reduce costs while maintaining core services.
The update is a little more rosy, calling Manitoba's economy "resilient."
"(It) is expected to expand modestly over the medium term as the global economic environment remains uncertain," the financial document said. "The outlook for Manitoba's real GDP growth is virtually unchanged from the forecast in budget 2013; however, the global forecast has marginally weakened."
While Manitoba "is not immune" to the global economy, the update said the province's economic growth was the second-highest among provinces and above the national average. Manufacturing has struggled a bit, but the agriculture, housing and retail sector all appear to have improved.
The province is spending $300 million less than budgeted on infrastructure, but the update noted that the government has committed to spend $5.5 billion on infrastructure improvements over the next five years.
"This commitment supports economic growth, reduces the maintenance burden and provides for the services Manitobans need in the future."