Provincial debt
The provincial debt, including a $200 million forecast allowance, is projected to total $63.7 billion by the end of the fiscal year – $991 million lower than the projection in Budget 2014.
This reduction in debt is due to a combination of a lower 2013/14 ending
balance and anticipated changes in the fiscal year.
Total debt at the end of 2013/14 was $950 million lower than the forecast for the year
in Budget 2014 (excluding the forecast allowance), mainly due to higher than expected
achievement of government’s cash management strategy and lower capital spending. This reduction carried forward into 2014/15, lowering the debt projection for the current year.
In 2014/15, taxpayer-supported debt is projected to be $42.3 billion – $785 million
lower than the projection in Budget 2014, reflecting an $807 million reduction carried
forward from 2013/14, partially offset by a $22 million increase to the projected change in debt for 2014/15 in Budget 2014.
The increase reflects lower direct operating debt (down $101 million), primarily due
to higher revenue cash receipts less downward adjustments to government’s cash.
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2012-2013 total provincial debt (actual) – $55,816 million
Deficit – (1,152 million)
2013-2014 total provincial debt (actual) – $60,693 million
Surplus (actual) – 353 million
2014-2015 total provincial debt (including forecast allowance) – $63,747 million
Forecast surplus (updated as of Q1) – $266 million
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Despite challenges to the fiscal plan from wildfires and flood-related costs, B.C. is currently on target to balance the 2014-15 budget, Finance Minister Michael de Jong announced today.
The year-end surplus for 2014-15 is now projected to be $266 million, up by $82 million from Budget 2014. Revenues have improved by $515 million, partly offset by higher expenses of $433 million primarily for statutory spending on fighting fires and flood-related emergency programs. Firefighting costs alone are expected to reach $350 million this year.
As a result of the successful implementation of government’s debt-management strategy, the taxpayer-supported debt for 2014-15 is projected to be $785 million lower than Budget 2014. Consequently, the taxpayer-supported debt-to-GDP ratio for this fiscal year is forecast at 18.1%, three-tenths of a percentage point lower than at Budget. Maintaining an affordable debt-to-GDP ratio is key to maintaining B.C.’s triple-A credit rating, which saves B.C. taxpayers millions of dollars a year on government’s cost of borrowing.
B.C.’s real GDP is forecast to grow by 1.9% in 2014, down slightly by one-tenth of a percentage point from Budget 2014. While most indicators of B.C.’s economic performance in 2014 show improved domestic activity compared to last year, domestic labour market activity and exports are slightly weaker than forecast earlier in the year. Growth forecasts of 2.3% in 2015 and 2.5% in 2016 are unchanged from Budget.