B.C. stays course with balanced budget in second quarter

November 26, 2014

VICTORIA – B.C. remains on target to balance the 2014-15 Budget with a projected year-end surplus of $444 million, up by $178 million since the First Quarterly Report, Finance Minister Michael de Jong announced today.

Revenue for 2014-15 is forecast to be $45.5 billion, which is $194 million higher than the First Quarterly Report projection. Increases in revenue from taxation sources, federal transfers and net income of commercial Crown corporations were partly offset by lower natural resource revenues. Much of this net gain in revenue is not expected to carry forward into future years.

Total government spending is forecast to be $16 million higher than projected in the First Quarterly report, partly due to higher spending by health authorities to respond to demand for services. Spending by government ministries is forecast to be down $29 million, compared to the first quarter forecast, partly due to lower debt servicing costs.

Taxpayer-supported debt is forecast to be $300 million less than projected at the First Quarterly Report. The government’s taxpayer-supported debt-to-GDP ratio — a key measure of affordability — is forecast to be 17.7%, 0.1 percentage points lower than the restated First Quarterly Report projection. Compared to Budget 2014, taxpayer-supported debt is forecast to be $1.1 billion lower, and the debt-to-GDP ratio 0.4 percentage points lower — down from 18.1% (restated) at budget.

B.C.’s real GDP is forecast to grow by 1.9% in 2014 and 2.3% in 2015, unchanged from the First Quarterly Report.

de Jong will meet with members of the independent Economic Forecast Council to discuss B.C.’s economic outlook at their annual meeting in Vancouver on Dec. 5, 2014. The meeting is open to media.

Quotes:

Michael de Jong, Minister of Finance –

“With a provincial budget of almost $45 billion, the current forecast surplus of $444 million is still a modest amount. While this quarterly update demonstrates there have been some positive short-term gains, we’re committed to continuing to exercise fiscal discipline to ensure B.C.’s budget remains balanced.”

“We have continually set and met, or exceeded, our fiscal targets. For this fiscal year, taxpayer-supported debt is forecast to be $1.1 billion less than projected at budget. This government remains committed to managing taxpayer-supported debt and further reducing the taxpayer-supported debt-to-GDP ratio.”

Quick facts:

• Retail sales are a source of strength in the B.C. economy, advancing 5.7% year-to-date to August 2014 compared to the previous year, with notable increases at motor vehicle and parts dealers, general merchandise stores, and food and beverage stores.
• B.C. housing starts increased by 5.8% year-to-date to October compared to the same period in 2013.
• B.C. businesses have enjoyed solid growth in export sales in the first nine months of 2014. The value of B.C. international merchandise exports was up 8% year-to-date compared to the same period of 2013.
• Increased economic activity in the United States has benefited B.C. with exports to the U.S. up 15.4% year-to-date to September 2014 compared to the previous year.
• B.C. employment growth remains modest with a 0.7% increase year-to-date to October compared to the same period last year. This increase translates to about 15,800 more jobs.

Media Contacts:

Jamie Edwardson
Communications Director
Ministry of Finance
250 356-2821

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