VICTORIA - Maintaining fiscal discipline and controlling spending helped government balance the budget and post a modest surplus of $353 million last fiscal despite lower than forecast revenues, Minister of Finance Michael de Jong announced today with the release of the 2013-14 Public Accounts.

Government revenues were $511 million lower than forecast in Budget Update 2013, primarily due to a drop in taxation revenues and lower-than-anticipated earnings for self-supported Crown corporations. Even with the decline in revenues, government increased spending on health by $360 million and education by $299 million compared to 2012-13.

By maintaining spending controls including a hiring freeze and restrictions on discretionary spending government continued to bend down the spending curve in 2013-14. Overall government spending was $561 million less than forecast in Budget Update 2013 and total program spending increased by only 0.4 per cent over the previous year.

Government invested $3.2 billion in capital projects throughout British Columbia such as schools, roads, public transit and hospitals. This included $1 billion in B.C.’s transportation network; over $980 million to build, upgrade and modernize K-12 and post-secondary schools; and $690 million for health facilities. Projects included improvements to Highway 97 as part of the Cariboo Connector Program; replacement of Belmont Secondary school in Langford; and replacement of the Lakes District Hospital in Burns Lake.

British Columbia’s ratio of taxpayer supported debt to GDP, a key measure of affordability, ended the year at 18.2% - one of the lowest in Canada and below the 18.4% forecast in Budget Update 2013.

Total financial statement debt increased by $4.0 billion to $60.8 billion as government continued to invest in capital projects. This includes an increase in taxpayer-supported debt of $2.9 billion to finance capital infrastructure and support working capital requirements for programs and services. The increase in taxpayer-supported debt was $1.6 billion lower than forecast in Budget Update 2013 primarily due to a $1.1 billion reduction in borrowing for operating purposes and a $371 million reduction in capital requirements.

Self-supported debt increased more than $2 billion. The increase in self-supported debt was $239 million lower than forecast in Budget Update 2013 as a result of lower capital requirements for BC Hydro and the Transportation Investment Corporation.

British Columbia continues to maintain a strong credit rating with all four major credit rating agencies. Standard and Poor’s; Moody’s Investors Services; and Fitch Ratings Inc. have affirmed the province’s rating at Triple-A. Dominion Bond Rating Service has affirmed the province at a rating of AA (high).

Online versions of the public accounts and related documents can be found at the following link: http://www.fin.gov.bc.ca/ocg/pa/13_14/pa13_14.htm

Unaudited Public Accounts supplementary data sets including salary information, travel expenses and payments to suppliers are available on the Data B.C. website at: www.data.gov.bc.ca

Quotes:

Minister of Finance Michael de Jong −

“Being fiscally vigilant has meant making some tough choices in order to get B.C. back to balanced budgets. With the support of B.C. taxpayers, we have managed to hold the line on spending and deliver a modest surplus while protecting the public services that are so important to British Columbians.”  

“We remain on track to balance the budget, but ongoing challenges in global and domestic economies mean we must continue to exercise discipline and sustain our commitment that we will not spend more money than taxpayers send to government.”

A backgrounder follows.

Media Contacts:

Glen Plummer
Media Relations
Ministry of Finance
250 387-3514

BACKGROUNDER

Audited Public Accounts confirms balanced budget

Surplus

The Province ended the 2013-14 fiscal year with a surplus of $353 million, $200 million more forecast in the budget. Government remains on track to balance the 2014-15 budget.

Economic Growth

British Columbia’s economy grew by 2.0% in the 2013 calendar year, on par with the national average of 2.0%, according to preliminary data from Statistics Canada. Sectors that saw strong gains included mining, quarrying and oil and gas extraction - up 5.1%, finance and insurance services - up 3.8%; and real estate, rental and leasing services - up 3.7%. Retail sales, an indicator of consumer confidence, increased by 2.4% in 2013. Exports of goods and services from British Columbia increased 6.3% due to strong external demand for B.C. products.

Revenue

Provincial revenue totalled $43,728 million in 2013-14, an increase of $1,679 million over 2012-13, primarily due to higher corporate income tax and tobacco tax revenues. These increases were offset by a decrease in personal income tax revenue.

Tax revenue decreased by $120 million (0.6%) over 2012-13. Personal income tax revenue decreased by $115 million. These decreases were offset by a $223 million increase in corporate income tax revenue, and a $109 million tobacco tax increase over 2012-13. All other tax revenues increased by $337 million over the same period.

Contributions from the federal government were $458 million higher than contributions received in 2012-13. This increase was from Canada Health and Social Transfers.

Natural resource revenues increased by $482 million (19.5%) from 2012-13 to 2013-14. Petroleum, natural gas and mineral royalties were $230 million more than in 2012-13. All other sources of natural resource revenue increased by $252 million over 2012-13.

Expense

Operating expenses totalled $43,375 million, a $174 million increase from 2012-13 and $561 million less than forecast in Budget Update 2013. Overall program spending was held to an increase of 0.4%. 

Debt

The taxpayer-supported debt to GDP ratio, a key measure of affordability, was 18.2% in 2013-14, lower than the 18.4% forecast in Budget 2013.

Total financial statement debt increased by $4.0 billion to $60.8 billion as government continued to invest in capital projects.

Total provincial debt, the most commonly used measure of debt, was $60,693 million in 2013-14. Debt increased $4,877 million over 2012-13. This was due to increased borrowing to fund capital projects and working capital requirements.

British Columbia continues to maintain one of the strongest credit ratings among Canadian provinces. Standard and Poor’s and Moody’s Investment Services each rate the Province triple A, the highest-possible rating, while Dominion Bond Rating Service rates the Province AA(high).

Capital Spending

Government invested $3.2 billion to build and upgrade schools, universities, colleges, hospitals, roads, bridges and other infrastructure to deliver programs and services.

Media Contacts:

Glen Plummer
Media Relations
Ministry of Finance
250 387-3514