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VICTORIA – Stronger tax assessments from 2005 and
one-time federal transfers are pushing British Columbia’s forecast surplus to
$2.15 billion, despite continued caution on commodity prices and the slowing
U.S. economy, Finance Minister Carole Taylor announced today with the release
of the second Quarterly Report for
2006/07.
“We are seeing some fiscal benefits carry forward from the economic
strength we have enjoyed in recent years,” said Taylor. “But the outlook
includes the same risks and challenges we identified in the first Quarterly
Report.”
Strong domestic performance in retail sales and employment, along with
higher private sector forecasts, suggest British Columbia’s economic growth in
2006 could now be stronger than the 3.6 per cent forecast in the first
Quarterly Report. However, risks to the economic outlook continue to gather,
including the current slowing of the U.S. economy, particularly in the U.S.
housing sector, as well as declining and volatile commodity prices.
“It looks like 2006 will be a good year for B.C.’s economy, but
forecasters are growing increasingly cautious about 2007,” Taylor said. “This
will be a key topic when I meet with the Province’s Economic Forecast Council
next week.”
The revenue forecast is $1,044 million higher than the first Quarterly Report forecast, including
an additional $725 million due to stronger 2005 tax assessment reports from the
Canada Revenue Agency and one-time federal trust funds for capital projects.
The federal trust funds were only recently finalized, as they were contingent
on the size of the 2005/06 federal surplus.
The spending forecast is up $94 million from the first Quarterly Report,
in part reflecting projected deficits by health authorities and hospital
societies.
The Province’s surplus for 2006/07 is now forecast at $2.15 billion,
$950 million higher than at first quarter and $1.55 billion higher than budget.
Taxpayer-supported debt is projected to decline to $26.3 billion by the end
of the 2006/07 fiscal year, and the taxpayer-supported debt-to-GDP ratio, a key
measure of debt affordability, is projected to fall to 14.7 per cent.
“To meet the needs of our growing province, we’ll continue to borrow
money to help fund new construction of health facilities, roads and other
public infrastructure,” said Taylor. “But to keep debt affordable, our
commitment is to ensure our debt does not grow faster than our economy. So I
was pleased to see that Moody’s cited our well-structured fiscal framework,
leading to a lower debt-to-GDP ratio, as one of the key reasons they recently
upgraded our credit rating to Aaa – their highest possible rating.”
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For more information on the
second Quarterly Report - 2006/07, please visit www.fin.gov.bc.ca.
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Communications Director Ministry of Finance 250 356-2821 |
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For more information on government services or to subscribe to the Province’s news feeds using RSS, visit the Province’s website at www.gov.bc.ca. |
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