Manitoba is forecasting a 496-million-dollar deficit for this fiscal year. That’s two million dollars less than the province projected in its spring budget.

The first-quarter update shows revenue coming in 294 million dollars above budget, helped by stronger income tax revenue and improved earnings from Manitoba Hydro.

But expenses are also expected to rise by 292 million dollars, largely because of flooding and wildfire response.

Finance Minister Adrien Sala says the province is continuing to invest in health care and disaster recovery.