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VICTORIA – Government’s budget plan remains resilient despite natural disaster costs and continued volatility in federal equalization payments, Finance Minister Gary Collins said today in releasing the province’s second quarterly report.
At this point in the fiscal year, the deficit forecast remains unchanged from the February 2003 budget estimate of $2.3 billion. The current forecast includes a $450-million forecast allowance and an unallocated contingencies budget of $85 million.
“Prudent fiscal planning, increased revenues, lower debt interest costs, and continued diligence on the part of ministries has helped to offset more than $500 million in forest fire and flood related costs, while maintaining a contingency budget and forecast cushion,” said Collins.
This year, B.C. anticipates receiving $675 million less in equalization revenue from the federal government than was forecast in the February 2003 budget, due mainly to a negative prior-year adjustment. Despite the equalization revision, total government revenues are expected to surpass the budget forecast due to improvements in other areas. These include higher energy revenues, taking into account the $418 million sale of drilling rights in September, higher Crown Corporation income, and higher personal income tax and property transfer tax revenues.
“The B.C. economy continues to recover from the effects of SARS, BSE, forest fires and floods. Despite these shocks, we’ve made good progress over the first six months of this fiscal year and recent economic indicators give us reason for optimism,” said Collins.
Total provincial debt is forecast to be $2.2 billion lower than budget, which contributes to continued improvement in the province’s debt outlook. The government’s first full budget in February 2002 forecast the taxpayer-supported debt to GDP ratio at 25 per cent for this year. That was lowered to 23 per cent in the February 2003 budget and is now forecast to come in at 21.6 per cent.
In preparation for the 2004 budget, the Minister of Finance is scheduled to meet with the independent Economic Forecast Council in early December. An updated government economic forecast, the third quarterly report for 2003/04 and an updated three-year fiscal plan will be released with the introduction of a balanced provincial budget on February 17, 2004.
-30- The second quarterly report can be found at: http://www.fin.gov.bc.ca/tbs/qrt-rpt/qr03/Q2_03.pdf
A summary of the second quarterly report can be found at: http://www.fin.gov.bc.ca/tbs/qrt-rpt/qr03/Q2_summary.pdf
The minister’s PowerPoint presentation can be found at:
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