FISCAL discipline, controlled spending, and prudent revenue forecasts have delivered a balanced 2014-15 budget, a better-than-forecast debt-to-GDP ratio, and a reduced direct operating debt, Finance Minister Mike de Jong announced on Tuesday with the release of the 2014-15 Public Accounts.
The Province ended the 2014-15 fiscal year with a surplus of $1.68 billion, with revenues $1.3 billion higher than forecast in Budget 2014 and expenses $23 million higher than forecast. The higher revenues were mainly due to increases in tax revenue and stronger net earnings of self-supported Crown corporations, partially offset by decreases in contributions from the federal government and other revenues, including lower natural resource revenue.
Government increased program spending by $1 billion compared to 2013-14, including an additional $508 million on health (up 2.8%) and $42 million in the social services sector. Total education spending was consistent with the previous year at $11.8 billion. An additional $436 million was spent on natural resources and economic development over the previous year, primarily for wildfire response, funding to support LNG, the environment and economic development.
Government also invested $3.4 billion in capital projects around the province in hospitals, schools, post-secondary facilities, transit and roads. Projects of note include the redevelopment of B.C. Children’s and Women’s Hospital in Vancouver, the Surrey Memorial Hospital Emergency Department and Critical Care Tower, replacement of Oak Bay Secondary, planning and preparations for the George Massey Tunnel replacement, and Highway 1 improvements.
Taxpayer-supported debt to GDP – a key measure of affordability – was lower by nine-tenths of a percentage point to 17.5%, an improvement over the Budget 2014 forecast of 18.4%.
Total provincial debt, which is a combination of taxpayer-supported debt and self-supported debt, increased by $2.2 billion, or 3.6%, in 2014-15 to $62.9 billion, as government continued to invest in capital projects. This increase in total provincial debt is $1.8 billion less than forecast in Budget 2015. The amount reflects an increase to taxpayer-supported debt of $812 million and an increase to self-supported debt of $1.4 billion. Government direct operating debt — including money borrowed to fund programs and services during the global economic downturn — decreased by $943 million.
Preliminary GDP growth numbers show the provincial economy grew 2.6% in 2014, better than the Budget 2014 forecast of 2% and ahead of the Canadian average of 2.4%. The provincial annual average unemployment rate for 2014 was 6.1%, better than the previous year’s rate of 6.6%.
British Columbia continues to maintain a strong credit rating with all three major credit rating agencies. Standard and Poor’s and Moody’s Investors Services have affirmed the Province’s rating at Triple-A, while upgrading the outlook to stable. Dominion Bond Rating Service has affirmed the Province at a rating of AA (high). Standard and Poor’s recently cited B.C. as having the best financial management practices among all of the provinces.
De Jong said: “Thanks to the determination of British Columbians to maintain a balanced budget, the Province is on a steady and firm fiscal path. This determination allows us to continue repaying the money borrowed to protect programs and services during the global economic crisis, and continue modest new investments in priority programs — the dividend that flows from a balanced budget.
“While our fiscal position last year was strong, we continue to see ongoing challenges in Canada, the U.S., and our major trading partners. This means we must continue to be disciplined and sustain our commitment to only spend on programs what taxpayers can afford to contribute.”