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NEWS RELEASE
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July 9, 2009 |
Ministry of Finance |
BRITISH
COLUMBIA PUBLIC ACCOUNTS SHOW SURPLUS
VICTORIA
– Despite a weaker economy and declining revenues, British Columbia posted a
surplus in the last fiscal year, announced Minister of Finance and Deputy
Premier Colin Hansen today as he released the 2008/09 Public Accounts.
The audited financial statements show the
“Last year’s economic environment required prudent fiscal management to
maintain a balanced budget,” said Hansen. “The sharp revenue declines we
experienced underscore the need for continued vigilance to ensure we can
continue to deliver the vital services British Columbians depend on while
keeping our program spending sustainable.”
The largest declines were seen in personal
income tax revenues, which decreased by
$863 million compared to last year; corporate tax revenues, which decreased by
$212 million; and social services tax revenues, which decreased by $114
million. Lower personal and corporate tax revenues are in part the result of
the accelerated tax reductions associated with the Province’s carbon tax
announced last fall. Natural resource revenues increased by $70 million from
last year, due primarily to improvements in natural gas prices.
Even with the decline in revenues,
government increased health-care spending by
$885 million, to $15.1 billion. Education expenditures were also increased by
$491 million, to $10.5 billion, and social service spending was increased by
$200 million, to $3.2 billion. Approximately 75 per
cent of the Province’s total operating costs are spent in these areas.
In 2008/09, the Province continued to make major investments in public
infrastructure needed to deliver social programs and stimulate the economy.
“The Province spent $3.8 billion on capital last year to build and upgrade schools,
universities, colleges, hospitals, roads, bridges and other projects,” said
Hansen. “At the same time,
“Through responsible fiscal management, the
taxpayer-supported debt-to-GDP ratio, a key measure of the Province’s ability
to repay debt, remains low,” said Hansen. “This is critical to ensuring that
future generations are not saddled with a debt burden they cannot afford.”
Online versions of the public accounts and related documents can be
found at the following link: www.fin.gov.bc.ca/ocg.htm.
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BACKGROUNDER
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PUBLIC
ACCOUNTS FOR 2008/09 FISCAL YEAR
Surplus
The Province ended the 2008/09 fiscal year with a surplus of $78 million, $28 million higher than budget. The 2008/09 surplus of $78 million was $2,759 million lower than the record surplus reported in the 2007/08 fiscal year.
Economic
Growth
British Columbia’s economy contracted by 0.3 per cent in the 2008 calendar year, below the national average of a 0.5 per cent expansion according to preliminary data from Statistics Canada.
Business investment in 2008, increased by 1.1 per cent, marking the second straight year in which there has been little change in business investment. Real consumer spending, which accounts for two-thirds of all provincial economic activity, increased by 2.8 per cent in 2008 compared to 5.2 per cent growth in 2007 and 5.7 per cent growth in 2006.
Revenue
Provincial revenue totalled $38,328 million in 2008/09, a decrease of $1,472 million, or four per cent over 2007/08.
The most significant decline was a decrease in taxation revenue of $1,209 million. Natural resource revenues improved marginally in 2008/09 despite continuing weakness in lumber prices, primarily due to higher natural gas prices. Forest revenues declined by $531 million in 2008/09.
Expense
Operating expenses totalled $38,250 million in 2008/09, an increase of $1,287 million or three per cent over 2007/08.
Health expenditures increased by $885 million or six per cent over the previous year. Education spending increased by $491 million or five per cent. Spending on social programs increased by $200 million, or seven per cent over 2007/08. Expenditures for health, education and social services represent approximately 75 per cent of the Province’s total operating costs.
Debt
Total provincial debt was $38,014 million in 2008/09, an increase of $3,377 million over 2007/08. This increase was due to increased borrowing to fund capital projects and working capital requirements, and borrowing in advance of requirements under the warehouse borrowing program.
The taxpayer-supported debt-to-GDP ratio, a key measure of fiscal sustainability, was 13.3 per cent in 2008/09. This compares to 13.8 per cent in 2007/08, 14.2 per cent in 2006/07, and is down from 21.3 per cent in 2002/03.
British Columbia continues to maintain one of the strongest credit ratings among Canadian provinces, with only Alberta rated higher. Standard and Poor’s and Moody’s Investment Services rate the province triple A, the highest possible rating, while Dominion Bond Rating Service rates the province AA(high).
Capital
Spending
The
Province’s total capital stock reached a value of $30,679 million in fiscal
2008/09. Taxpayer spending on capital of $3,778 million was offset by
amortization and disposals totalling $1,854 million. The net capital investment
to build and upgrade schools, universities, colleges, hospitals, roads, bridges
and other infrastructure needed to deliver programs and services was $1,924
million in 2008/09, $1,953 million in 2007/08, and $1,870 million in 2006/07.
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Contact: |
Jamie
Edwardson Communications
Manager Ministry
of Finance 250
356-9872 |
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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.
