British Columbia cut its forecast budget surplus for the fiscal year that began in April by 22 percent amid a slowing economy and lower-than-expected tax revenue.
The Canadian province will post a C$153 million ($146 million) surplus in 2013-2014, less than the C$197 million it forecast in February, according to an updated fiscal plan released today by Finance Minister Michael de Jong. The surplus will be little changed in 2014-2015 before rising to C$446 million in 2015-2016, he said.
“I won’t profess to be entirely comfortable, but the numbers are what they are” said de Jong, adding that he’d be more at ease with a 2013-2014 surplus of about C$200 million. “We have now moved below that.”
British Columbia’s economic update, the first since Premier Christy Clark’s ruling Liberal Party was re-elected last month, forecasts the province’s economy to expand by 1.4 percent in 2013, down from the 1.6 percent forecast in February. The province’s economy grew by 1.8 percent in 2012, government documents show.
“The next 12-18 months are going to be tough” as the government moves to encourage private-sector investment, especially development of a multi-billion-dollar liquefied natural gas industry, de Jong said in a briefing for reporters before unveiling the economic blueprint in the legislature in Victoria, the provincial capital.
Long-term debt in the province of 4.65 million people will rise this fiscal year to C$62.6 billion, from C$55.8 billion last year, or 27 percent of gross domestic product. Taxpayer-supported debt, which excludes the obligations of commercially run government businesses such as B.C. Hydro, will increase about 12 percent from a year earlier to C$42.6 billion, or 18.4 percent of GDP.
The province’s budget projection includes a “forecast allowance” of C$150 million this year. It also includes a C$225 million contingency allowance.
The latest 2013-2014 budget surplus incorporates C$50 million from this year’s forecast allowance, an estimated C$30 million of planned spending cuts and expectations for sales of government-owned real estate and other assets, the budget documents show.
The smaller surplus also reflects a C$221 million drop in expected tax revenue, compared to the government’s February forecast in February.
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