British Columbia’s Second Quarterly Report continues to forecast increased revenues and reduced debt, demonstrating that government’s ongoing fiscal prudence, economic diversification and debt reduction continue to have a positive impact on the provincial economy, Finance Minister Michael de Jong announced today.
Revenues are forecast to increase by $372 million in 2016-17, compared to the first quarter forecast, primarily due to further improvements in personal income tax revenues driven by higher than anticipated household income in 2015. The increase is partly offset by a lower forecast for property transfer tax revenues.
Government expense is forecast to be $71 million higher than in the first quarter forecast, including compensation increases for the Economic Stability Mandate dividend and higher emergency program flood-related costs.
Taxpayer-supported debt is forecast to end the year $2.1 billion lower than was forecast at budget and $1.6 billion less than last year. The reduction is primarily due to the reduction in direct operating debt – money borrowed in the past to fund programs and services. B.C.’s taxpayer supported debt to GDP ratio is now projected to be 15.8%. The lower taxpayer-supported debt is forecast to reduce debt servicing costs $5 million. Government now borrows only to build capital projects.
On Nov. 25, 2016, the independent economic forecast council provided its forecasts, showing B.C. is projected to outperform Canada, with robust growth this year and ongoing modest growth thereafter.
Year-to-date economic data continue to show strong domestic activity when compared to 2015, and private sector forecasters expect B.C. to rank first in provincial economic growth in 2016. Retail sales and exports are performing better than expected in the first Quarterly Report. So far this year, B.C. has seen an increase in 71,400 jobs over the same period last year. However, the external economic situation has been mixed and uncertainty remains. Government will publish an updated economic forecast with Budget 2017.
Finance Minister Michael de Jong –
“B.C. continues to outperform the country in economic growth, but with modest growth expected for next year. That means we must remain vigilant and continue to create a healthy economic profile, with a fiscal plan that balances spending with debt repayment and an economic strategy that diversifies our industries and export partners.”
- B.C. employment increased 3.1% year-to-date to October 2016, compared to the first 10 months of 2015, or by approximately 71,400 jobs.
- Year-to-date to September 2016, B.C. retail sales rose 6.4% compared to the first nine months of 2015.
- Year-to-date to October, B.C. housing starts have averaged 41,782 annualized units, an increase of 32.7% compared to the first 10 months of 2015.
British Columbia’s 2016-17 Second Quarterly Report is also available online at: www.gov.bc.ca/fin