B.C. has posted a $1.5 billion budget surplus for 2018-19 stemming in part from a $2.9 billion increase in revenues over budget, Finance Minister Carole James said Thursday as she released the 2018-19 public accounts.
“We are on a very strong fiscal footing,” James said. “I’m really proud of the work we’ve done.”
James said increased revenue to allow for a balanced budget came about in part because B.C’s economy grew by an estimated 2.4% in the 2018 calendar year; the province had Canada’s third highest growth.
She said the debt-to-GDP ratio is 14.5%, the third lowest in Canada, after Saskatchewan and Alberta.
That improved economic growth, higher household incomes and strong 2017 income tax returns led to $2.9 billion in increased revenue.
Economic growth was led by goods-producing industries with gains in mining, quarrying and oil and gas extraction, construction and manufacturing.
New taxes such as the employer health tax and the real estate speculation tax added $464 million and $115 million, respectively, to provincial coffers.
And, James noted, the natural resources sector has yielded higher dollars, primarily in the area of forestry stumpage rates.
James stressed that taxpayer-supported debt is down.
She repeated that B.C.’s operating debt was eliminated for the first time in 40 years, contributing to a $926 million decrease in taxpayer-supported debt.
James said health care, education, economic development and significant wildfire, emergency response and preparedness activities in the natural resources sector received $2 billion in increased spending.
The minister remained upbeat about B.C.’s economic future, noting the province had the lowest Canadian unemployment rate at 4.7% in 2018 – a decrease from 5.1% in 2017.
And, she said, wage and salary growth also led the country at 5.9% in 2018, and B.C. continues to rank among the top provinces for wage growth this year.
James said dealing with ICBC’s ongoing problems remains a concern for the government, particularly Attorney General David Eby.
She said the public accounts show the insurance Crown corporation’s fiscal challenges stabilized as forecast in the third quarter with a net loss of $1.2 billion, some $174 million lower than the prior year’s $1.3 billion net loss.”
“We’re monitoring that very closely,” James said. “It continues to be a large risk in the budget.”
The numbers are a dramatic shift from a year ago.
The 2017-18 public accounts showed an operating surplus of $301 million, a figure that was $55 million higher than the surplus forecast in the previous fall’s budget update. That surplus had been maintained despite the government boosting spending on programs by almost $3 billion as well as covering significant expenses from disastrous 2017 wildfires.