B.C.’s economic growth continues to be robust this year, reflecting solid employment gains, near record lumber prices, higher energy and mineral prices, sustained housing market activity and stronger retail sales.
Robust economic conditions and sound fiscal management are generating a healthy budget surplus.
The first quarterly report expects this year’s budget surplus to reach $865 million, significantly higher than the $100 million surplus estimated when Budget 2004 was tabled in February.
Larger budget surpluses in the years ahead will provide British Columbians with more choices and more opportunities to realize their vision for our province.
“Our plan to balance the budget and revitalize the economy is working," said Finance Minister Gary Collins. "The B.C. economy continues to gather steam and the budget surplus is growing.”
B.C.’s economic growth continues to be robust this year, reflecting solid employment gains, near record lumber prices, higher energy and mineral prices, sustained housing market activity and stronger retail sales.
“Our economy continues to create more and better jobs,” said Collins. “Again this year, we’re leading the country in job growth, the construction sector is booming, and small business owners are very optimistic about B.C.’s future.”
Government revenue is forecast to be $1.2 billion higher than budget due to higher natural resource royalties, revenues from taxation, and commercial Crown corporation net incomes. Excluding the BC Rail transaction, which is bottom line neutral, spending for ministries and other programs in the consolidated revenue fund is on track to come in $45 million below budget. This includes the estimated $175 million cost of fighting this year's forest fires, offset by lower debt interest costs.
Provincial debt is expected to decline to $37.2 billion by the end of 2004/05, $603 million lower than in 2003/04 and $2.2 billion lower than the February budget, mainly due to improvements in government's cash position and forecast surplus.
To help manage the risk associated with potentially volatile commodity revenues and unexpected economic or financial shocks, the forecast allowance is increased from $100 million to $300 million. In the event that it is not required, the forecast allowance would increase the size of the budget surplus.
In addition to presenting the first quarterly report, Collins also made public today the government's Budget 2005 Consultation Paper. This discussion paper will form the basis upon which the Select Standing Committee on Finance and Government Services consults with British Columbians about the development of Budget 2005.
The First Quarterly Report and the Budget 2005 Consultation Paper can be found at www.gov.bc.ca/fin online.
Download an audio clip of Minister Collins talking about the First Quarterly Report at http://www.mediaroom.gov.bc.ca/events/September14_04e2/ online.
