The impact of global economic instability has resulted in an $804-million decline in provincial revenues for 2008/2009. The decrease in projected revenues reflects weakening economic growth and a decline in commodity prices - but a new financial report still shows an estimated surplus of $450 million in the 2008/09 provincial budget.
Nov. 24, 2008
VICTORIA – The impact of global economic instability has resulted in an $804-million decline in provincial revenues for 2008/2009. The decrease in projected revenues reflects weakening economic growth and a decline in commodity prices.
The Province’s second quarterly financial report shows an estimated surplus of $450 million in the 2008/09 provincial budget, down from the estimated $1 billion projected in the last quarterly report, said Finance Minister Colin Hansen. The surplus remains $400 million ahead of what was projected when this years’ budget was introduced. The second quarterly report also includes a $500 million forecast allowance in the event of further deterioration to government’s fiscal position.
“The global economy is facing major challenges, and the significant drop in our revenues proves that B.C. is not immune,” said Hansen. “But we are better-positioned than other jurisdictions in North America. Our strong and prudent fiscal management over the last seven years means we are now able to take measures that provide some certainty to families and businesses while maintaining a resilient economy and a balanced budget.”
On Oct. 22, Premier Gordon Campbell announced a 10-point plan to mitigate the impact of the economic decline on British Columbians. The plan will improve B.C.’s economic competitiveness, reduce costs and provide an additional $485 million in tax relief and support for businesses, families and individuals over the next three years.
The report notes that recent private-sector estimates now project B.C.’s annual real GDP growth will be 1.4 per cent in 2008 and 1.3 per cent in 2009. “Although growth forecasts for B.C. are lower than previously forecast, the overall growth outlook for B.C. in 2008 and 2009 at this time is projected to be more optimistic than Canada as a whole,” said Hansen. “The weaker economic outlook clearly means lower revenues going forward, in excess of $3 billion over the three years of the current fiscal plan.”
The Province is committed to maintaining its record of sound fiscal and economic management. The 2008/2009 budget is the fifth consecutive balanced budget. Since 2004, the Province has received seven credit rating upgrades to the highest possible current status of Triple A. In preparation for Budget 2009, the minister of finance will meet with the independent Economic Forecast Council on Dec. 5, 2008 to obtain its views on the economic outlook. The Second Quarterly Report 2008/09 is available online at: www.fin.gov.bc.ca/qrt-rpt/qr08/Q2_08.pdf
