B.C. remains on target to balance the 2013-14 Budget with a projected year-end surplus of $165 million, up by $29 million since the First Quarterly Report, Finance Minister Michael de Jong announced today.
Revenue for 2013-14 is forecast to be $44.3 billion, which is $15 million lower than the First Quarterly Report projection. Reductions in revenue from taxation sources, natural resources and federal transfers were offset by an improvement in the net income of commercial Crown corporations and a reduction in forecast allowance. A forecast allowance of $100 million remains as a buffer against future economic and fiscal risks.
The government's taxpayer-supported debt-to-GDP ratio - a key measure of affordability - is forecast to be 18.5 per cent, 0.2 percentage points lower than the revised first quarter projection.
B.C.'s real GDP is forecast to grow by 1.4 per cent in 2013 and 2.2 per cent in 2014, unchanged from the June Budget Update.
Members of the independent Economic Forecast Council will provide their updated B.C. real GDP forecasts to de Jong at their annual meeting in Vancouver on Dec. 6, 2013. The meeting is open to media.
de Jong outlined government's plan for the next round of collective bargaining. Government aims to create certainty and stability throughout the public sector through longer-term voluntarily negotiated agreements that are affordable to B.C. taxpayers.
The mandate also provides public sector employees with the opportunity to share in future economic growth based conditionally on B.C.'s economic performance.
Michael de Jong, Minister of Finance -
"Given the size of our $44 billion budget, this update shows there are no wild fluctuations, not a lot of volatility, which demonstrates good fiscal management, and helps create economic stability."
"We've had to make some tough choices to get B.C. back on track with balanced budgets. I've been travelling the province talking to people and conducting telephone town halls to ask British Columbians how they think surplus funds should be allocated. These conversations are helping me prepare Balanced Budget 2014."
- Inflation in B.C., through the first ten months of 2013, remains low with consumer prices down 0.1 per cent compared to the same period last year.
- Retail sales have been almost flat since early 2012, but have shown some modest growth in the past few months. Year-to-date to September, B.C. retail sales have increased by 1.1 per cent.
- The B.C. housing market is going through a period of moderation from unsustainably high levels prior to the 2008 downturn.
- B.C. exports have performed fairly well this year, with strong external demand for B.C. products. Year-to-date, B.C. exports are up 5.2 per cent in the first nine months of 2013 compared to the same period of 2012.
- The improvement in the U.S. housing market is benefitting B.C., with softwood lumber exports to the U.S. up 28.5 per cent, year-to-date to September, due to increases in volumes and prices. Exports of softwood lumber to China are also up year-to-date, 35.9 per cent, mainly due to stronger prices.
British Columbia's 2013-14 Second Quarterly Report is available online at: www.fin.gov.bc.ca/pubs.htm
Ministry of Finance