B.C.'s Fiscal Outlook Improves, Prudence Maintained
VICTORIA – B.C.’s economy is showing signs of recovery, and a reviving business sector helped improve the Province’s four-year fiscal outlook by $2.7 billion since Budget 2010 through higher than expected corporate income tax revenues, Finance Minister Colin Hansen announced with the release of the Province’s First Quarterly Report.
“These results show how vital B.C.’s strong and growing corporate sector is to our economy,” said Hansen. “However, significant volatility still exists in the American and global markets. We need to maintain fiscal discipline and build on the competitive tax environment we’ve created to ensure our economy continues to improve.”
Over four years, corporate income tax revenues are $2.5 billion higher than anticipated. The higher revenues enable government to maintain the current spending plan as well as make $2.1 billion available over the next three years for further tax reductions or additional spending. In addition, government has been able to reduce the projected deficit by $335 million in 2010-11, $135 million in 2011-12 and $15 million in 2012-13, and increase the projected surplus by $80 million in 2013-14.
The deficit is now forecast at $1.4 billion in 2010-11, $810 million in 2011-12 and $130 million in 2012-13, returning to a surplus of $490 million in 2013-14. The forecast allowance is maintained at Budget 2010 levels. Available revenues are $650 million in 2011-12, $700 million in 2012-13, and $750 million in 2013-14.
The improvement in B.C.’s economy is demonstrated by increases in key indicators such as retail sales, employment and exports. The Ministry of Finance forecasts economic growth in B.C. at 3.1 per cent in 2010 and 2.2 per cent in 2011. By comparison, private sector forecasters predict growth of 3.6 per cent in 2010 and 3.0 per cent in 2011.
“Our proven track record of sound fiscal management remains a top priority,” said Hansen. “While B.C.’s economy is regaining strength there is still a need to maintain fiscal prudence.”
British Columbia’s 2010-11 First Quarterly Report is available online at: www.gov.bc.ca/fin.
