EX-99.12 4 tm2325641d1_ex99-12.htm EXHIBIT 99.12

 

Exhibit 99.12

 

 

First quarterly report september 2023

 

 

 

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First quarterly report fiscal plan update 2023/24 – 2025/26 2023/24 economic outlook and financial forecast & three month results april - june 2023

 

 

 

British Columbia Cataloguing in Publication Data

 

British Columbia. Ministry of Finance.

Quarterly report on the economy, fiscal situation and Crown corporations. — ongoing–

 

Quarterly.

Title on cover: Quarterly report.

Continues: British Columbia. Ministry of Finance.

Quarterly financial report. ISSN 0833-1375.

ISSN 1192-2176 — Quarterly Report on the economy, fiscal situation and Crown corporations.

 

1. Finance, Public — British Columbia — Accounting — Periodicals. 2. British Columbia — Economic conditions — 1945–              — Periodicals.*

3. Corporations, Government — British Columbia — Accounting — Periodicals. I. Title.

 

HJ13.B77               354.711’007231’05

 

 

 

2023/24 First Quarterly Report
September 15, 2023
| TABLE OF CONTENTS

 

Updated Fiscal Plan 2023/24 to 2025/26  
Tables:  
Updated Fiscal Plan 2023/24 to 2025/26 1
   
Part One — Updated 2023/24 Financial Forecast  
Introduction 5
Revenue 7
Expense 10
Consolidated Revenue Fund (CRF) Spending 10
Service Delivery Agency Spending   11
Full-Time Equivalents for the BC Public Service 12
Provincial Capital Spending 12
Projects Over $50 Million 13
Provincial Debt 16
Risks to the Fiscal Forecast 17
Supplementary Schedules   19

Tables:

1.1   Forecast Update 5
1.2 Financial Forecast Changes 6
1.3 Comparison of Major Factors Underlying Revenue 8
1.4 Pandemic Recovery Contingencies 11
1.5 Capital Spending Update 12
1.6 Provincial Debt Update 16
1.7 Operating Statement 19
1.8 Revenue by Source 20
1.9 Expense by Ministry, Program and Agency 21
1.10   Expense by Function 22
1.11 Capital Spending 23
1.12 Capital Expenditure Projects Greater Than $50 million 24
1.13 Provincial Debt 28
1.14 Statement of Financial Position 29

 

 

  First Quarterly Report 2023/24 |  i

 

 

Table of Contents

 

 

Part Two — Economic Review and Outlook

Summary 31
British Columbia Economic Activity and Outlook 32
Labour Market 33
Consumer Spending and Inflation 34
Housing 36
Business and Government 38
External Trade and Commodity Markets 39
Demographics 41
Risks to the Economic Outlook 41
External Outlook 42
United States 42
Canada 45
Asia 47
Europe 48
Financial Markets 48
Interest Rates 48
Exchange Rates 50
     
Tables:  
2.1 British Columbia Economic Indicators 32
2.2 U.S. Real GDP Forecast: Consensus vs B.C. Ministry of Finance 44
2.3 Canadian Real GDP Forecast: Consensus vs B.C. Ministry of Finance 46
2.4 Private Sector Canadian Interest Rate Forecasts 50
2.5 Private Sector Exchange Rate Forecasts 51
2.6.1 Gross Domestic Product (GDP): British Columbia 52
2.6.2 Selected Nominal Income and Other Indicators: British Columbia 53
2.6.3 Labour Market Indicators: British Columbia 53
2.6.4 Major Economic Assumptions 54

 

 

ii  | First Quarterly Report 2023/24  

 

 

Table of Contents

 

 

Appendix — Fiscal Plan Update

 

Tables:

A1 Material Assumptions – Revenue 55
A2 Natural Gas Price Forecasts – 2023/24 to 2025/26 60
A3 Material Assumptions – Expense 62
A4 Operating Statement – 2016/17 to 2025/26 65
A5 Revenue by Source – 2016/17 to 2025/26 66
A6 Revenue by Source Supplementary Information – 2016/17 to 2025/26 67
A7 Expense by Function – 2016/17 to 2025/26 68
A8 Expense by Function Supplementary Information – 2016/17 to 2025/26 69
A9 Full-Time Equivalents (FTEs) – 2016/17 to 2025/26 70
A10 Capital Spending – 2016/17 to 2025/26 71
A11 Statement of Financial Position – 2016/17 to 2025/26 72
A12 Changes in Financial Position – 2016/17 to 2025/26 73
A13 Provincial Debt – 2016/17 to 2025/26 74
A14 Provincial Debt Supplementary Information – 2016/17 to 2025/26 75
A15 Key Provincial Debt Indicators – 2016/17 to 2025/26 76

 

 

  First Quarterly Report 2023/24 |  iii

 

 

 

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UPDATED FISCAL PLAN – 2023/24 to 2025/26

 

($ millions)   2023/24   2024/25   2025/26
Deficit - Budget 2023   (4,216)   (3,754)   (3,043)
Fiscal Plan Updates:               
Personal income tax   (522)   (556)   (579)
Corporate income tax   99    1,165    (561)
Sales tax   175    195    191 
Carbon tax   (111)   (113)   (114)
Property transfer tax   151    104    94 
Other taxation revenue   77    57    78 
Natural gas royalties   (1,179)   (469)   (336)
Other natural resources revenue   (201)   (89)   25 
Contributions from the federal government - DFAA   (420)   459    181 
Contributions from the federal government - other   319    13    45 
Other revenue   150    246    287 
Wildfires   (762)   -    - 
Other spending changes   (234)   (405)   (405)
Deficit - First Quarterly Report   (6,674)   (3,147)   (4,137)
                
Prudence included in fiscal plan:               
Contingencies - General, CleanBC and Climate & Emergency Response   (4,500)   (4,800)   (4,700)
Pandemic Recovery Contingencies   (1,000)   -    - 
Forecast allowance   (700)   (500)   (500)
                
Capital Spending:               
Taxpayer-supported capital spending   12,180    12,639    13,076 
Self-supported capital spending   4,073    4,117    2,853 
    16,253    16,756    15,929 
Provincial Debt:               
Taxpayer-supported debt   70,772    84,737    98,130 
Self-supported debt   31,562    34,092    34,713 
Total debt (including forecast allowance)   103,034    119,329    133,343 
                
Taxpayer-supported debt-to-GDP ratio   17.6%   20.3%   22.6%
Taxpayer-supported debt-to-revenue ratio   95.5%   108.7%   124.6%

 

Financial Outlook

 

 

The First Quarterly Report shows an increased deficit forecast for 2023/24 mainly due to lower natural gas royalties, lower personal income tax, and higher spending for wildfire response. The deficit projection is lower in 2024/25 but higher in 2025/26 reflecting updated revenue forecasts for corporate income tax and other streams, as outlined in this report.

 

Compared to Budget 2023, revenue forecasts are lower by $1.5 billion in 2023/24, higher by $1.0 billion in 2024/25 and lower by $689 million in 2025/26. Expense projections are higher by $996 million in 2023/24 and by $405 million in 2024/25 and 2025/26. These changes result in a forecast deficit of $6.7 billion in 2023/24, $3.1 billion in 2024/25, and $4.1 billion in 2025/26, as shown in the table above.

 

Personal income taxation revenue is lower by $1.7 billion over the fiscal plan mainly reflecting preliminary 2022 income tax returns. Corporate income tax projections have shifted based on the federal government’s updated forecast of national corporate taxable income, with an increase in 2024/25 and reduction in 2025/26. This is in contrast to last year’s first quarterly update, when the income tax data showed significant improvements.

 

 

  First Quarterly Report 2023/24 |  1

 

 

Updated Fiscal Plan – 2023/24 to 2025/26

 

 

Over the three years, natural resource revenue is forecast to be $2.2 billion lower than at Budget 2023, mostly from natural gas royalties as a result of lower prices. The updated natural gas price forecast for 2023/24 is $1.29 ($Cdn/gigajoule, plant inlet), down from the budget outlook ($3.04), a 58 per cent reduction. The Ministry of Finance incorporates a prudent forecast for natural gas revenue, using a price forecast that is within the 20th percentile of the private sector forecasts.

 

Contributions from the federal government are higher mainly as a result of a one-time top-up payment of $273 million under the Canada Health Transfer. Also, funding under the Disaster Financial Assistance Arrangements is re-profiled to reflect updated spending timelines.

 

Compared to budget, expenses in 2023/24 are expected to be higher mainly as a result of wildfire response costs, as the province faces record-breaking wildfires in many areas. The updated expense outlook also includes higher spending by government organizations, higher interest expense and lower uptake of refundable tax credits.

 

Economic Outlook

 

 

B.C.’s economy continues to be resilient, despite the higher-than-expected interest rate environment. Employment has posted modest gains, and consumer spending has been supported by strong population growth. Total inflation has eased from 8.1 per cent in May 2022 to 3.0 per cent in July 2023. Housing markets are adjusting to higher interest rates, with increased home sales activity in recent months, and robust new home construction. However, merchandise exports have declined in the first half of 2023, reflecting weaker demand from B.C.’s trading partners and lower prices for key commodities compared to the first half of 2022.

 

The First Quarterly Report forecast for B.C. real GDP growth in 2023 has been revised up to 1.2 per cent from the Budget 2023 forecast of 0.4 per cent, and the forecast for 2024 has been revised down to 0.8 per cent from 1.5 per cent. This revision largely reflects weaker exports and the impact of higher interest rates over a longer than expected period, with increased borrowing costs weighing on consumer spending and business investment.

 

British Columbia’s Real GDP Outlook

 

 

The economic outlook over the 2025 to 2027 period is relatively unchanged from the Budget 2023 forecast. Over this period, inflation is expected to normalize and interest rates are expected to stabilize.

 

Capital Investments

 

 

Taxpayer-supported capital spending on hospitals, education facilities, transportation infrastructure, housing and other projects is financed through a combination of provincial borrowing, funding provided by third parties, and from internal cash flows. Taxpayer-supported capital spending is forecast to total $37.9 billion over the fiscal plan period, which is $350 million higher than the Budget 2023 forecast mainly due to changes in the timing of capital projects and increased spending in health and social housing sectors.

 

Over the three years, self-supported infrastructure spending by commercial Crown corporations totals $11.0 billion.

 

Debt Affordability

 

 

Government’s key debt affordability metric, the taxpayer-supported debt-to-GDP ratio, is forecast to improve from Budget 2023 due to lower debt balances from fiscal 2022/23 (see chart below). Taxpayer-supported debt is projected at $98.1 billion at the end of the fiscal plan period, which is $1.3 billion lower than the budget forecast.

 

B.C. continues to have low debt-affordability metrics relative to other Canadian provinces.

 

 

2   | First Quarterly Report 2023/24  

 

 

Updated Fiscal Plan – 2023/24 to 2025/26

 

  

Taxpayer-Supported Debt-to-GDP

 

 

Including the self-supported debt of commercial Crown corporations and a $500 million forecast allowance, the total provincial debt is projected at $133.3 billion by the end of 2025/26.

 

Risks to the Fiscal Plan

 

 

The main risks to the government’s fiscal plan include:

 

·risks to the B.C. economic outlook, largely due to uncertainty surrounding global economic activity, as persistent price pressures may lead to higher than anticipated interest rates for longer;

 

·assumptions underlying revenue and Crown corporation forecasts such as economic factors and commodity prices;

 

·increased spending which may include wildfire and floods response and increased demand and costs for government services such as health care and social services; and

 

·potential changes to federal government transfer allocations, cost-sharing agreements with the federal government, and impacts on the provincial income tax bases arising from federal tax policy and budget changes.

 

Government incorporates several levels of prudence in its projections to help mitigate the risks to the fiscal plan, including the following:

 

·economic forecast prudence, as shown by a lower outlook for B.C.’s major trading partners, resulting in a projection for B.C.’s real GDP growth that is within the range of private sector forecasters in 2023 and 2024;

 

·contingencies vote allocations of $5.5 billion in 2023/24, $4.8 billion in 2024/25 and $4.7 billion in 2025/26 to help manage unexpected pressures including pandemic and climate change and emergency response-related costs, as well as the cost of unsigned labour agreements;

 

·a forecast allowance of $700 million in 2023/24 and $500 million in 2024/25 and 2025/26 to guard against volatility, including revenue changes; and

 

·the natural gas revenue forecast continues to incorporate a prudent price forecast that is within the 20th percentile of the private sector forecasts.

 

Conclusion

 

 

B.C.’s fiscal forecast for 2023/24 shows a higher deficit from budget, mainly as a result of lower natural gas royalties and higher spending for wildfire response. The province’s economy continues to be resilient, and debt projections have improved, maintaining the Province’s fiscal sustainability.

 

Government continues to invest in the priorities outlined in Budget 2023, including housing, health care and mental health, affordability, and climate change.

 

 

  First Quarterly Report 2023/24 |  3

 

 

 

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PART 1     |      UPDATED 2023/24 FINANCIAL FORECAST

  

Introduction

 

Table 1.1 2023/24 Forecast Update               
                
($ millions) 

Budget

2023

  

First

Quarterly

Report

   Change 
Revenue   77,690    76,228    (1,462)
Expense   (80,206)   (81,202)   (996)
Pandemic Recovery Contingencies   (1,000)   (1,000)   - 
Forecast allowance   (700)   (700)   - 
Surplus (Deficit)    (4,216)   (6,674)   (2,458)
Capital Spending:               
Taxpayer-supported capital spending   11,813    12,180    367 
Self-supported capital spending   4,027    4,073    46 
    15,840    16,253    413 
Provincial Debt:               
Taxpayer-supported debt   75,617    70,772    (4,845)
Self-supported debt   31,607    31,562    (45)
Total debt (including forecast allowance)   107,924    103,034    (4,890)
Taxpayer-supported debt-to-GDP ratio   18.9%   17.6%   -1.3%
Taxpayer-supported debt-to-revenue ratio   100.1%   95.5%   -4.6%

 

The first quarter update for 2023/24 shows a decline in revenue and an increase in spending resulting in a deficit of $6.7 billion — up $2.5 billion from the budget deficit forecast of $4.2 billion. The forecast for revenue is lower for personal income tax, carbon tax, natural gas royalties, and other natural resources, with increases in sales tax and property transfer tax. The expense forecast is higher mainly due to the wildfire response.

 

Details of the revenue and expense forecast changes from Budget 2023 are shown in Chart 1.1 and Table 1.2.

 

Chart 1.1 2023/24 Deficit – Major Changes from Budget 2023

 

 

 

 

  First Quarterly Report 2023/24 |   5

 

 

Updated 2023/24 Financial Forecast

 

 

Table 1.2 2023/24 Financial Forecast Changes

 

 

   ($ millions) 
2023/24 deficit at Budget 2023 (February 28, 2023)   (4,216)
      
Revenue1 changes:     
Personal income tax – weaker preliminary 2022 tax assessment partly offset by improvement in 2023 household income   (522)
Corporate income tax – gain in prior-year settlement payment, offset by decrease in instalments reflecting revised outlook of 2023 national corporate taxable income   99 
Provincial sales tax – higher 2022/23 carry forward and year-to-date sales activity   175 
Property transfer tax – due to higher than expected sales results   151 
Carbon tax – lower sales volume in most fuel types reflecting prior year and year-to-date results   (111)
Tobacco tax – reflecting lower prior year and year-to-date sales results   (45)
Other taxation sources – mainly reflecting the impacts of the 2022/23 year-end and year-to-date results   122 
Natural gas royalties – lower prices, volumes and natural gas liquids royalties, partly offset by decreased utilization of royalty and infrastructure programs/credit   (1,179)
Mining – lower coal prices and production, partly offset by higher copper prices   (174)
Electricity sales under the Columbia River Treaty – lower Mid-C electricity prices   (44)
Forests – mainly higher stumpage rates   40 
Other natural resources – mainly lower water rental revenues, other fees and rental tenure revenue   (23)
Fees, licences, investment earnings and miscellaneous revenue:     
Post-secondary institutions   36 
Other sources – mainly higher revenue from fees and investment earnings   111 
Canada health and social transfers – mainly one-time funding to strengthen public health care   282 
Other federal government transfers – mainly lower claims under the Disaster Financial Assistance Arrangements relating to 2021 rainstorm   (383)
Commercial Crown corporation net income   3 
Total revenue changes   (1,462)
      
Less : expense1 increases (decreases):     
Consolidated Revenue Fund changes:     
Statutory spending:     
Fire management costs   762 
Housing Priority Initiatives Special Account   104 
Other statutory spending   17 
Refundable tax credits – mainly reflects lower film tax credits   (81)
Other expense changes – mainly higher interest costs   91 
Spending funded by third party recoveries   (73)
Changes in spending profile of service delivery agencies:     
School districts   177 
Universities   165 
Colleges and institutes   152 
Health authorities and hospital societies   1,170 
Other service delivery agencies2   455 
(Increase) decrease in transfers to service delivery agencies - accounting elimination     (1,943 )
Total expense changes   996 
Total changes   (2,458)
2023/24 deficit at the First Quarterly Report    (6,674)

 

 

1 Detailed descriptions of changes are provided in the revenue and expense sections of this report. 

2 Includes BC Transportation Financing Authority, BC Transit, BC Housing Management Commission, Community Living BC, and other entities.

 

 

6   | First Quarterly Report 2023/24  

 

 

Updated 2023/24 Financial Forecast

 

 

Projected taxpayer-supported capital spending in 2023/24 is $12.2 billion, which is $367 million higher than forecast in Budget 2023, with increased spending in the health sector and social housing, partly offset by lower spending in the education sector. The self-supported capital spending forecast is $4.1 billion, with minor changes from budget.

 

The taxpayer-supported debt at the end of 2023/24 is forecast at $70.8 billion, which is lower by $4.8 billion compared to the Budget 2023 forecast as a result of lower debt balances at the end of fiscal 2022/23 in addition to higher cash balances. Self-supported debt is forecast to be $31.6 billion with minor changes from budget.

 

Revenue

 

Revenue for 2023/24 is forecast to be $76.2 billion — $1.5 billion lower than the projection in Budget 2023. The natural resource revenue forecast is lower by $1.4 billion mainly reflecting lower natural gas royalties. The remaining $138 million decrease to the revenue forecast reflects lower taxation revenue, mainly due to lower than expected preliminary 2022 income tax returns, effects of the economic update, the impacts of final 2022/23 revenue that carry forward, year-to-date results, and weaker federal government outlook of national corporate taxable income.

 

Chart 1.2 Revenue Changes from Budget 2023 

 

 

  

Detailed revenue projections are disclosed in Table 1.8, and key assumptions and sensitivities relating to revenue are provided in Table A1. An analysis on historical volatility of major economic drivers can be found in the 2023 B.C. Financial and Economic Review (pages 17-18). For 2023/24, the major changes from the Budget 2023 forecast include the following:

 

 

  First Quarterly Report 2023/24 |   7

 

 

Updated 2023/24 Financial Forecast

 

 

Table 1.3 Comparison of Major Factors Underlying Revenue

 

 

Calendar Year  First Quarterly Report   Budget 2023 
Per cent growth unless otherwise indicated  2022   2023   2024   2025   2022   2023   2024   2025 
Real GDP   3.3    1.2    0.8    2.4    2.8    0.4    1.5    2.4 
Nominal GDP   11.7    2.9    3.3    4.3    11.0    2.8    3.7    4.2 
Household income   6.7    6.3    4.2    4.1    7.1    6.1    4.3    4.1 
Wages and salaries   10.7    5.9    5.1    4.6    11.3    6.3    5.2    4.4 
Corporations net operating surplus   20.8    -11.8    -9.1    1.5    13.5    -14.5    -7.0    2.3 
Employment   3.2    1.1    0.8    1.3    3.2    0.4    1.0    1.2 
Consumer expenditures on durable goods   -2.6    2.0    0.8    2.2    -4.3    -3.6    0.1    2.6 
Consumer expenditures on goods and services   10.4    6.4    4.7    4.4    9.6    6.9    4.9    4.2 
Business investment   12.7    4.0    4.8    5.5    11.5    1.4    5.5    7.0 
Residential investment   8.6    3.3    3.5    2.9    8.2    -1.5    4.7    5.3 
Retail sales   3.1    2.4    2.5    3.4    3.0    1.8    2.9    3.4 
Consumer Price Index   6.9    3.9    2.5    2.2    6.9    3.9    2.5    2.2 
Residential sales value   -30.4    -11.6    16.9    7.4    -30.3    -19.8    20.5    8.2 
B.C. Housing starts   -1.9    0.0    -9.8    -5.0    -1.9    -16.5    -5.1    2.7 
U.S. Housing starts   -3.0    -11.1    -2.5    0.4    -3.0    -16.6    3.9    0.4 
SPF 2x4 price ($US/thousand board feet)  $814   $400   $450   $500   $814   $400   $450   $500 
Exchange rate (US cents/Canadian dollar)   76.8    74.7    75.8    77.6    76.8    74.7    77.4    78.6 

 

Fiscal Year  2022/23  2023/24  2024/25  2025/26  2022/23  2023/24  2024/25  2025/26
Natural gas price ($Cdn/GJ at plant inlet)  $4.09   $1.29   $2.03   $2.33   $3.81   $3.04   $2.69   $2.55 
Bonus bid average bid price per hectare ($)  $0   $200   $200   $300   $200   $275   $300   $200 
Electricity price ($US/mega-watt hour, Mid-C)  $85   $93   $90   $92   $93   $108   $99   $95 
Metallurgical coal price ($US/tonne, fob Australia)  $322   $248   $222   $210   $318   $252   $223   $204 
Copper price ($US/lb)  $3.87   $3.82   $3.96   $4.09   $3.74   $3.56   $3.73   $3.85 
Average stumpage rates ($Cdn/cubic metre)  $38.05   $19.04   $19.42   $22.14   $36.20   $18.07   $18.96   $21.82 
Crown harvest volumes (million cubic metres)   37.2    38.0    38.0    38.0    39.0    38.0    38.0    38.0 

 

Income Tax Revenue

 

Personal income tax revenue is down $522 million reflecting weaker 2022 preliminary tax assessment information, partly offset by slightly improved 2023 household income.

 

Corporate income tax revenue is up $99 million as a result of improvement from prior-year settlement payments, partially offset by lower advance instalments from the federal government. The budget forecast included a $1.1 billion prior-year settlement payment due to the federal government but instead this adjustment was recognized in the fiscal year 2022/23, reflecting the preliminary 2022 tax assessment information. 

This improvement is offset by lower advance instalments from the federal government. The lower forecast for advance instalments is due to a significant change in the federal government forecast for 2023 national corporate taxable income, which is expected to decline by 16.5 per cent compared to a decline of 3.1 per cent assumed at budget.

 

Other Tax Revenue

 

Provincial sales tax revenue is up $175 million mainly due to improvements reflected in the 2022/23 Public Accounts that will carry forward, as well as increases in various components of taxable expenditures in 2023.

 

Property transfer tax revenue is up $151 million mainly due to higher-than-expected activity in the housing market reflecting demand, consistent with higher than assumed residential sales values.

 

Tobacco tax revenues are down $45 million due to lower year-to-date sales.

 

 

8   | First Quarterly Report 2023/24  

 

 

Updated 2023/24 Financial Forecast

 

 

Fuel tax revenues are down $30 million due to the impacts of lower 2022/23 and year-to-date sales volumes.

 

Carbon tax revenues are down $111 million due to the impacts of lower 2022/23 year-end results as well as year-to-date sales volumes on major fuel types. Carbon tax projection includes a tax rate increase to $65/tonne of carbon dioxide equivalent emissions, effective April 1, 2023, which was included in the Budget 2023 forecast.

 

Other taxation revenues are up $152 million due to higher property, insurance premium and employer health taxes reflecting the impacts of the 2022/23 results.

 

Natural Resources Revenue

 

Revenue from natural gas royalties is down $1.2 billion mainly due to lower prices for natural gas and natural gas liquids as well as slightly lower natural gas volumes, partially offset by decreased utilization of royalty and infrastructure program credits.

 

The updated natural gas price forecast is $1.29 ($Cdn/gigajoule, plant inlet), down from the Budget 2023 outlook ($3.04). The price assumption is within the 20th percentile of the private sector forecasters, continuing the prudence incorporated since 2013/14. Natural gas royalty rates are sensitive to prices in the $1.22 to $2.42 range. Hence, the effective royalty rate is generally expected to fall as prices decrease, depending on the take up of royalty program credits. Since the prices for natural gas liquids (e.g. pentane and condensate) are more closely aligned to oil rather than natural gas, the lower byproduct royalties from these commodities reflect the expected decrease in oil prices, now forecast to be $74.56 US/barrel in 2023/24, down 8 per cent from the budget outlook.

 

Revenue from coal, metals, minerals and other mining-related sources is down $174 million mainly due to lower coal prices and production reflecting global excess coal supply. This decrease is partially offset by higher copper prices.

 

Revenue from electricity sales under the Columbia River Treaty is down $44 million mainly reflecting lower Mid-C electricity prices which are closely aligned with natural gas prices. The price forecast reflects increased hydro capacity and availability of solar power in western electricity markets. Mid-C electricity prices, now forecast to be $92.90 US/mega-watt hour, are down 14 per cent from the budget outlook.

 

Forest revenue is up $40 million mainly due to higher stumpage revenue reflecting regular updates to the market pricing system. Total stumpage rates, now forecast to be $19.04 Cdn/cubic metre, are up 5 per cent from the budget outlook.

 

Revenue from other natural resources is down $23 million mainly due to decreased water rentals collected under the Water Sustainability Act and lower revenue related to annual natural gas and petroleum tenure payments.

 

Other Taxpayer-Supported Revenue

 

Other taxpayer-supported revenue consists of revenue from fees, licences, investment earnings and miscellaneous sources. These revenue sources are now expected to total $10.7 billion, up $147 million from budget.

 

The updated forecast for fee revenues totals $5.3 billion, up $81 million from budget mainly due to higher projections from post-secondary institutions and health authorities. The revised forecast for investment earnings is $1.4 billion, up $60 million from budget mainly due to higher interest rates. The miscellaneous revenue outlook of $4 billion is up $6 million from budget mainly due to increased projections from taxpayer-supported Crown entities.

 

 

  First Quarterly Report 2023/24 |   9

 

 

Updated 2023/24 Financial Forecast

 

  

Federal Government Transfers

 

Federal government contributions are expected to be $13.5 billion, down $101 million from budget.

 

Canada health and social transfers have improved by $282 million, mainly reflecting one-time funding to strengthen the public health care system.

 

Other federal government contributions are down $383 million mainly due to lower claims under the Disaster Financial Assistance Arrangements, reflecting changes in cost and timing related to the 2021 November rainstorm event.

 

Expense

 

The First Quarterly Report expense forecast for 2023/24 is $996 million higher than Budget 2023 mainly due to higher spending for wildfire response and supportive housing initiatives.

 

Chart 1.3 Expense Changes from Budget 2023

  

 

 

Consolidated Revenue Fund (CRF) Spending

 

Statutory spending is projected at $802 million in 2023/24 and includes the following:

 

·$762 million for fire management costs — this is in addition to the $204 million in the fire management voted appropriation, for a total spending forecast of $966 million;

 

·$104 million increase to support decampment in Vancouver and to provide permanent housing for individuals residing in temporary housing through the Housing Priority Initiatives Special Account;

 

·$17 million in other statutory spending; offset by,

 

·$81 million lower refundable tax transfers mainly reflecting lower film tax credits.

  

 
10   | First Quarterly Report 2023/24  

 

 

Updated 2023/24 Financial Forecast

 

 

Other changes in CRF spending include $91 million increase in debt servicing costs due to higher interest rates.

 

Contingencies

 

Budget 2023 includes a Contingencies vote of $5.5 billion in 2023/24, with $1.0 billion in the Pandemic Recovery sub-vote, $2.2 billion allocated to Shared Recovery Mandate, and $2.3 billion allocated to General Programs, CleanBC and Climate & Emergency Response. Contingencies help fund unexpected costs such as flood recovery, wage mandate, increased costs for government services, and emerging priorities. These allocations remain unchanged in the First Quarterly Report.

 

Pandemic Recovery Contingencies

 

Budget 2023 allocated $1.0 billion for continued measures related to the pandemic and economic recovery. Table 1.4 provides an update on the notional allocations of the Province’s pandemic measures as of June 30, 2023.

 

Table 1.4 2023/24 Pandemic Recovery Contingencies

 

$ millions  Updated Forecast 

Initiative

 

Budget 2023

  

Q1

 
Health COVID-19 Management   875    875 
Supports for Vulnerable Populations   20    20 
Tourism Initiative Envelope   20    20 
Unallocated: available for additional health or recovery measures   85    85 
Total   1,000    1,000 

 

Spending Recovered from Third Parties

 

Expenses funded by third parties are forecast to decrease by $73 million mainly due to lower recoveries from commercial Crown corporations through the fiscal agency loan program.

 

Operating Transfers to Service Delivery Agencies

 

Operating transfers to service delivery agencies are forecast to be $1.9 billion higher than Budget 2023 mainly due to higher grants to health organizations ($973 million) and education sector ($412 million) for wage mandate, a $311 million increase to BC Housing Management Commission, and an additional $247 million to other service delivery agencies. These funding increases are related to spending forecast changes noted below.

 

Service Delivery Agency Spending

 

Service delivery agency expenses are forecast to increase by $2.1 billion in 2023/24 compared to Budget 2023.

 

·School district expense forecasts are higher by $177 million mainly to reflect salary increases under the Shared Recovery Mandate and higher inflationary pressures affecting operating costs.

  

 

  First Quarterly Report 2023/24 |   11

 

 

Updated 2023/24 Financial Forecast

 

 

·Post-secondary sector expenses are forecast to increase by $317 million mainly due to salary increases under the Shared Recovery Mandate, which are funded by increased provincial grants to the institutions.

 

·The health authority and hospital society expense forecast is $1.2 billion higher than Budget 2023, mainly due to salary increases under the Shared Recovery Mandate and higher operating costs.

 

·Other service delivery agency spending is forecast to be $455 million higher than budget mainly due to increased spending by the BC Housing Management Commission to fund additional supportive housing and various updates across a number of other agencies.

 

Detailed expense projections are disclosed in Table 1.9. Key spending assumptions and sensitivities are provided in the appendix Table A3.

 

Full-Time Equivalents for the BC Public Service

 

The projection of full-time equivalent (FTE) staff utilization for 2023/24 is 35,500 FTEs, an increase of 1,100 since budget, to support the continued response to a significant wildfire season and to implement key government priorities such as child care and education.

 

Provincial Capital Spending

 

Capital spending is projected to total $16.3 billion in 2023/24 — $413 million higher than the forecast in Budget 2023 (see Tables 1.5 and 1.11).

 

Table 1.5 2023/24 Capital Spending Update    
     
   ($ millions) 
Taxpayer-supported capital spending at Budget 2023   11,813 
Changes:     
Timing of school district spending   (29)
Timing of post-secondary institution spending   (33)
Higher health authority spending   288 
Timing of transportation sector spending   (3)
Higher social housing spending   133 
Other net adjustments to capital schedules   11 
Total taxpayer-supported changes   367 
Taxpayer-supported capital spending - updated forecast   12,180 
      
Self-supported capital spending at Budget 2023   4,027 
Higher BC Hydro spending   46 
Self-supported capital spending - updated forecast   4,073 
2023/24 provincial capital spending at the First Quarterly Report   16,253 

 

Taxpayer-supported capital spending is projected at $12.2 billion. The $367 million increase since Budget 2023 is primarily due to higher planned spending on health routine capital programs by health authorities and social housing projects. This is partially offset by timing changes in capital spending on K-12 and post-secondary projects.

 

 

12   | First Quarterly Report 2023/24  

 

 

Updated 2023/24 Financial Forecast

 

 

At $4.1 billion, self-supported capital spending is $46 million higher than Budget 2023 primarily due to changes in the timing of BC Hydro expenditures.

 

Projects Over $50 million

 

Capital spending on projects greater than $50 million is presented in Table 1.12. Since Budget 2023 thirty projects have been added to the table:

 

·Carson Elementary School ($61 million);

 

·Guildford Park Secondary School ($65 million);

 

·La Vallée (Pemberton) Elementary School ($66 million);

 

·New Cloverley Elementary School ($64 million);

 

·New East Side Elementary School ($59 million);

 

·North East Latimer Elementary School ($52 million);

 

·Prince Rupert Middle School ($127 million);

 

·Tamanawis Secondary School ($57 million);

 

·Capilano University – New Squamish Campus ($63 million);

 

·Vancouver Community College – Centre for Clean Energy and Automotive Innovation ($291 million);

 

·Abbotsford Long-Term Care ($211 million);

 

·Campbell River Long-Term Care ($134 million);

 

·Delta Long-Term Care ($180 million);

 

·FW Green Long-Term Care ($156 million);

 

·Richmond Long-Term Care ($178 million);

 

·Burnaby Hospital Redevelopment Phase 2 and BC Cancer Centre ($1.731 billion);

 

·Belleville Terminal Replacement ($304 million);

 

·Blackwater North Fraser Slide ($203 million);

 

·Cottonwood Hill at Highway 97 Slide ($335 million);

 

·Highway 1 Corridor – Falls Creek ($143 million);

 

·Highway 1 Goldstream Safety Improvements ($162 million);

 

·Highway 1 Jumping Creek to MacDonald ($245 million);

 

·Highway 1 Selkirk ($129 million);

 

·1015 Hastings St. Development ($151 million);

 

·128 to 134 East Cordova St. ($166 million);

 

·320 Hastings St E. Redevelopment ($86 million);

 

·BC Hydro – Kootenay Canal modernize controls project ($61 million);

 

·BC Hydro – Peace to Kelly Lake stations sustainment project ($344 million);

 

 

  First Quarterly Report 2023/24 |   13

 

 

Updated 2023/24 Financial Forecast

 

 

·BC Hydro – John Hart dam seismic upgrade project ($913 million); and

 

·BC Hydro – Bridge River 1 replace units 1-4 generators/governors project ($313 million).

 

The following projects have been removed since Budget 2023 and are no longer listed in the table:

 

·British Columbia Institute of Technology – Health Sciences Centre for Advanced Simulation; and

 

·Highway 1 Lower Lynn Corridor improvements.

 

Changes since Budget 2023 for existing projects include:

 

·Burnaby North Secondary project’s year of completion was amended from 2023 to 2024 to align with revised project schedule;

 

·Simon Fraser University – Student Housing project’s anticipated total cost decreased from $112 million to $108 million to reflect final project cost. Other contributions decreased from $39 million to $35 million;

 

·University of Victoria – Student Housing project’s anticipated total cost increased from $231 million to $236 million to reflect revised project cost. Contributions from other sources increased from $103 million to $108 million;

 

·Royal Roads University – West Shore Learning Centre project’s anticipated total cost increased from $100 million to $106 million to reflect revised project cost. Contributions from other sources increased from $20 million to $26 million;

 

·University of Victoria - Engineering and Computer Science Building Expansion project’s anticipated total cost increased from $90 million to $133 million to reflect revised project cost. Internal borrowing increased from $65 million to $97 million and other contributions increased from $25 million to $36 million. Project’s anticipated year of completion was amended to align with revised project schedule;

 

·British Columbia Institute of Technology – Student Housing project’s year of completion was amended from 2024 to 2025 to align with revised project schedule;

 

·North Island College – Student Housing project’s year of completion was amended from 2024 to 2025 to align with revised project schedule;

 

·Vancouver Island University – Student Housing project’s year of completion was amended from 2025 to 2026 to align with revised project schedule;

 

·Peace Arch Hospital Renewal project’s anticipated total cost decreased from $91 million to $87 million to reflect revised project cost. Other contributions decreased from $83 million to $79 million;

 

·The Clinical and Systems Transformation project’s anticipated total cost increased from $754 million to $799 million to reflect revised project cost. Other contributions increased from $52 million to $97 million;

 

·Burnaby Hospital Redevelopment – Phase 1 project’s anticipated total cost increased from $612 million to $683 million to reflect the revised project scope. Internal borrowing increased from $578 million to $633 million and other contributions increased from $34 million to $50 million;

 

 

14   | First Quarterly Report 2023/24  

 

 

Updated 2023/24 Financial Forecast

 

 

·Dawson Creek and District Hospital Replacement project’s anticipated total cost increased from $378 million to $590 million to reflect the updated post-tender budget. Internal borrowing increased from $247 million to $413 million and other contributions increased from $131 million to $177 million;

 

·Royal Inland Hospital Phil and Jennie Gaglardi Tower project’s year of completion was amended from 2026 to 2027 to align with revised project schedule;

 

·Cariboo Memorial Hospital Redevelopment project’s year of completion was amended from 2028 to 2029 to align with revised project schedule;

 

·Vancouver General Hospital – Operating Rooms Renewal Phase 2 project’s year of completion was amended from 2028 to 2029 to align with revised project schedule;

 

·Royal BC Museum – Collections and Research Building project’s anticipated total cost increased from $224 million to $270 million to reflect revised project budget. Internal borrowing increased from $224 million to $270 million;

 

·Highway 1 Chase Four-Laning project’s anticipated total cost decreased from $220 million to $196 million to reflect revised project cost. Internal borrowing decreased from $208 million to $184 million;

 

·Highway 1 Salmon Arm West project’s anticipated total cost decreased from $155 million to $140 million to reflect revised project cost. Internal borrowing decreased from $124 million to $109 million;

 

·Highway 1 Quartz Creek Bridge Replacement project’s anticipated total cost decreased from $121 million to $119 million to reflect revised project cost. Internal borrowing decreased from $71 million to $69 million;

 

·BC Transit Victoria HandyDART Facility project’s anticipated total cost increased from $60 million to $84 million to reflect revised project cost. Internal borrowing increased from $26 million to $41 million and other contributions increased from $13 million to $22 million;

 

·Highway 1 R.W. Bruhn Bridge project’s year of completion was amended from 2025 to 2027 to align with revised project schedule. The project’s anticipated total cost increased from $225 million to $255 million to reflect revised project cost. Internal borrowing increased from $134 million to $164 million;

 

·UBC load increase stage 2 project’s anticipated total cost decreased from $56 million to $53 million as final costs were lower than estimated for underground works;

 

·Bridge River 2 upgrade units 7 and 8 project’s anticipated total cost decreased from $78 million to $75 million due to lower contractor cost;

 

·Mica units 1 to 4 generator transformers replacement project’s anticipated total cost increased from $80 million to $89 million due to purchasing additional spare transformer and constructing infrastructure to store this equipment;

 

·Mount Lehman substation upgrade project’s anticipated total cost decreased from $58 million to $55 million due to construction efficiencies and an earlier in service date; and

 

·Wahleach refurbish generator project’s anticipated total cost increased from $51 million to $64 million to reflect changes to project scope, severe weather in 2021 and supply chain disruptions.

 

 

  First Quarterly Report 2023/24 |   15

 

 

Updated 2023/24 Financial Forecast

 

 

Provincial Debt

 

The provincial debt is projected to total $103.0 billion by the end of the fiscal year — $4.9 billion lower than the forecast in Budget 2023. This improvement is primarily due to lower debt balance from fiscal 2022/23 and changes in cash balances.

 

Table 1.6 2023/24 Provincial Debt Update 1 

 

 

   ($ millions) 
Taxpayer-supported debt forecast at Budget 2023  75,617 
Changes:     
Lower debt level from 2022/23   (3,767)
Changes in operating results (before forecast allowance)   2,458 
Non-cash items   57 
Changes in cash balances 2    (3,760)
Changes in other working capital balances 3    (200)
Taxpayer-supported capital spending   367 
Total taxpayer-supported changes   (4,845)
Taxpayer-supported debt - updated forecast   70,772 
      
Self-supported debt forecast at Budget 2023   31,607 
Changes:     
Lower debt level from 2022/23   (296)
Higher capital spending   46 
Changes in internal financing   205 
Total self-supported changes   (45)
      
Self-supported debt - updated forecast   31,562 
Forecast allowance   700 
2023/24 provincial debt forecast at the First Quarterly Report   103,034 

 

 
1 Provincial debt is prepared in accordance with Generally Accepted Accounting Principles and presented consistent with the Debt Summary Report included in the Public Accounts. Debt is shown net of sinking funds and unamortized discounts, excludes accrued interest, and includes non-guaranteed debt directly incurred by commercial Crown corporations and debt guaranteed by the Province.
2 Reflects changes in cash balances at April 1, 2023 and includes all cash balances from the Consolidated Revenue Fund, School Districts, Universities, Colleges, Health Authorities, Hospital Societies and other taxpayer-supported agencies.
3 Changes in other working capital balances include changes in accounts receivables, accounts payable, accrued liabilities, deferred revenue, investments, restricted assets and other assets.

 

Taxpayer-supported debt is forecast to be $70.8 billion at the end of 2023/24 — $4.8 billion lower than forecast in Budget 2023. This decrease reflects a lower opening balance of $3.8 billion, and changes in cash and other working capital balances of $4.0 billion, offset by higher operating deficit of $2.5 billion and higher capital spending of $367 million.

 

The taxpayer-supported debt-to-GDP ratio is projected to end 2023/24 at 17.6 per cent — 1.3 percentage points lower than forecast in Budget 2023. The taxpayer-supported debt-to-revenue ratio is forecast to end the fiscal year at 95.5 per cent — 4.6 percentage points lower than forecast at budget.

 

 
16   | First Quarterly Report 2023/24  

 

 

Updated 2023/24 Financial Forecast

 

 

Chart 1.4 Debt Affordability

 

 

1  The ratio of interest costs (less sinking fund interest) to revenue. Figures include capitalized interest expense in order to provide a more comparable measure to outstanding debt.

 

Self-supported debt is forecast to be $31.6 billion at the end of 2023/24 — consistent with the forecast in Budget 2023. The forecast allowance remains at $700 million.

 

While the Province’s debt level is expected to increase by $13.6 billion over the year, the B.C. government is able to borrow at relatively low interest rates, with debt affordability remaining at levels that are lower than they have been historically. The Province’s taxpayer-supported interest bite is 3.1 cents per dollar of revenue.

 

Details on provincial debt are shown in Table 1.13.

 

Total provincial debt is presented consistent with the Debt Summary Report included in the Public Accounts. Debt is shown net of sinking fund investments and unamortized discounts, excludes accrued interest, and includes non-guaranteed debt directly incurred by commercial Crown corporations and debt guaranteed by the Province. The reconciliation between provincial debt and the financial statement debt is shown in Table 1.14.

 

Risks to the Fiscal Forecast

 

The major risks to the updated economic and fiscal forecasts include persistent price pressures leading to higher than anticipated interest rates for longer and weaker global demand. Other risks include climate change impacts, housing affordability, and volatility in commodity markets.

 

Personal and corporate income tax revenues take over a year to finalize. For example, tax assessments for the 2022 tax year will not be finalized until March 2024 (and assessments for the 2023 tax year will not be finalized until March 2025, and so on). Property transfer tax and provincial sales tax revenues are impacted by the number of residential transactions, average home sale prices and the amount of taxable purchases of goods and services. Natural resource revenues are affected by international commodity prices, and the health of B.C.’s major trading partners.

 

 
  First Quarterly Report 2023/24 |   17

 

 

Updated 2023/24 Financial Forecast

 

 

The spending forecast contained in the fiscal plan is based on ministry and service delivery agency plans. Risks include changes in planning assumptions such as demand for government services in the health care, education, and community social services sectors, as well as costs associated with fighting forests fires and responding to other natural disasters.

 

Capital spending may be influenced by several factors including design development, procurement activity, labour shortages, ongoing supply chain issues, inflation, weather, geotechnical conditions and interest rates.

 

As a result of these uncertainties, the actual operating result, capital spending, and debt levels may differ from the current forecast. Government will continue to update the fiscal outlook throughout the year in the second and third quarterly reports.

 

The potential fiscal impacts from these risks may be partly offset by the prudence incorporated in the updated forecast, including an economic outlook within the range of the private sector forecasters, the $5.5 billion contingencies vote allocation, and the $700 million forecast allowance.

 

 
18   | First Quarterly Report 2023/24  

 

 

Updated 2023/24 Financial Forecast

 

 

Supplementary Schedules

 

The following tables provide the financial results for the three months ended June 30, 2023 and the 2023/24 full-year forecast.

 

Table 1.7 2023/24 Operating Statement

 

 

   Year-to-Date to June 30   Full Year 
   2023/24   Actual   2023/24   Actual 
($ millions)  Budget   Actual   Variance   2022/23 1    Budget   Forecast   Variance   2022/23 
Revenue  20,106   20,729   623   17,751   77,690   76,228   (1,462)  81,536 
Expense   (17,834)   (18,405)   (571)   (16,619)   (81,206)   (82,202)   (996)   (80,832)
Surplus (deficit) before forecast allowance   2,272    2,324    52    1,132    (3,516)   (5,974)   (2,458)   704 
Forecast allowance   -    -    -    -    (700)   (700)   -    - 
Surplus (deficit)   2,272    2,324    52    1,132    (4,216)   (6,674)   (2,458)   704 
Accumulated surplus (deficit) beginning of the year before remeasurement gains and losses   8,355    2,905    (5,450)   2,211    8,355    2,905    (5,450)   2,201 
Adjustments to accumulated surplus (deficit) 1    -    942    942    674    -    -    -    - 
Accumulated surplus (deficit) before remeasurement gains and losses   10,627    6,171    (4,456)   4,017    4,139    (3,769)   (7,908)   2,905 
Effect of remeasurement gains and (losses)   (836)   (282)   554    170    (836)   (202)   634    (202)
Accumulated surplus (deficit) end of period   9,791    5,889    (3,902)   4,187    3,303    (3,971)   (7,274)   2,703 

 

 
1 Restated to reflect government’s current accounting policies.

 

 
  First Quarterly Report 2023/24 |   19

 

 

Updated 2023/24 Financial Forecast

 

 

Table 1.8 2023/24 Revenue by Source

 

 

   Year-to-Date to June 30   Full Year 
   2023/24   Actual   2023/24   Actual 
($ millions)  Budget   Actual   Variance   2022/23 1    Budget   Forecast   Variance   2022/23 
Taxation                                        
Personal income  3,942   3,942   -   3,181   15,953   15,431   (522)  17,268 
Corporate income   3,533    3,533    -    2,612    5,938    6,037    99    9,156 
Employer health   683    679    (4)   599    2,731    2,750    19    2,720 
Sales 2    2,460    2,709    249    2,319    10,187    10,362    175    9,818 
Fuel   239    239    -    250    1,072    1,042    (30)   1,021 
Carbon   680    708    28    566    2,811    2,700    (111)   2,161 
Tobacco   126    123    (3)   157    565    520    (45)   531 
Property   864    861    (3)   773    3,488    3,591    103    3,253 
Property transfer   507    555    48    863    1,799    1,950    151    2,293 
Insurance premium   194    194    -    165    780    810    30    804 
    13,228    13,543    315    11,485    45,324    45,193    (131)   49,025 
Natural resource                                        
Natural gas royalties   505    193    (312)   552    2,016    837    (1,179)   2,255 
Forests   148    149    1    277    846    886    40    1,887 
Other natural resource revenues 3    415    481    66    587    1,902    1,661    (241)   2,056 
    1,068    823    (245)   1,416    4,764    3,384    (1,380)   6,198 
Other revenue                                        
Post-secondary education fees   484    483    (1)   463    2,770    2,829    59    2,651 
Fees and licenses 4    554    590    36    555    2,412    2,434    22    2,277 
Investment earnings   350    418    68    291    1,349    1,409    60    1,316 
Miscellaneous 5    874    1,089    215    976    3,989    3,995    6    4,445 
    2,262    2,580    318    2,285    10,520    10,667    147    10,689 
Contributions from the federal government                                        
Health and social transfers   2,243    2,516    273    2,098    8,970    9,252    282    8,769 
Other federal government contributions 6     694    531    (163)   522    4,623    4,240    (383)   3,757 
    2,937    3,047    110    2,620    13,593    13,492    (101)   12,526 
Commercial Crown corporation net income                                        
BC Hydro   21    (4)   (25)   (12)   712    712    -    360 
Liquor Distribution Branch   303    304    1    324    1,150    1,150    -    1,199 
BC Lottery Corporation 7    286    292    6    405    1,456    1,456    -    1,584 
ICBC 8    (39)   95    134    (817)   -    -    -    (197)
Other 9    40    49    9    45    171    174    3    152 
    611    736    125    (55)   3,489    3,492    3    3,098 
Total revenue   20,106    20,729    623    17,751    77,690    76,228    (1,462)   81,536 

 

 
1 Restated to reflect government’s current accounting policies.
2 Includes provincial sales tax and HST/PST housing transition tax related to prior years.
3 Columbia River Treaty, other energy and minerals, water rental and other resources.
4 Healthcare-related, motor vehicle, and other fees.
5 Includes reimbursements for health care and other services provided to external agencies, and other recoveries.
6 Includes contributions for health, education, community development, housing and social service programs, and transportation projects.
7 Net of payments to the federal government and payments to the BC First Nations Gaming Revenue Sharing Limited Partnership in accordance with section 14.3 of the Gaming Control Act (B.C.).
8 2022/23 full year actual does not include non-controlling interest and will be restated in future quarterly reports to reflect the adoption of IFRS 9 and IFRS 17.
9 Includes Columbia Power Corporation, BC Railway Company, Columbia Basin power projects, and post-secondary institutions’ self-supported subsidiaries.

 

 
20   | First Quarterly Report 2023/24  

 

 

Updated 2023/24 Financial Forecast

 

   

Table 1.9 2023/24 Expense by Ministry, Program and Agency

 

 

   Year-to-Date to June 30   Full Year 
   2023/24   Actual   2023/24   Actual 
($ millions)  Budget   Actual   Variance   2022/23 1    Budget   Forecast   Variance   2022/23 
Office of the Premier  4   4   -   4   16   16   -   14 
Agriculture and Food   24    25    1    38    112    112    -    292 
Attorney General   202    219    17    202    773    776    3    807 
Children and Family Development   474    451    (23)   401    1,912    1,912    -    1,743 
Citizens’ Services   155    191    36    172    683    683    -    768 
Education and Child Care   2,470    2,587    117    2,330    8,874    8,874    -    8,233 
Emergency Management and Climate Readiness   28    27    (1)   27    101    101    -    821 
Energy, Mines and Low Carbon Innovation   21    18    (3)   17    129    134    5    399 
Environment and Climate Change Strategy   48    66    18    78    255    263    8    574 
Finance   412    472    60    197    1,578    1,682    104    4,059 
Forests   218    283    65    206    925    1,687    762    1,190 
Health   6,373    6,464    91    6,030    28,674    28,674    -    26,385 
Housing   213    214    1    163    897    897    -    897 
Indigenous Relations and Reconciliation   47    39    (8)   84    188    188    -    777 
Jobs, Economic Development and Innovation   28    34    6    26    113    113    -    225 
Labour   5    9    4    7    21    21    -    34 
Mental Health and Addictions   4    4    -    3    27    27    -    198 
Municipal Affairs   228    175    (53)   230    269    269    -    1,923 
Post-Secondary Education and Future Skills   718    755    37    656    2,770    2,770    -    2,691 
Public Safety and Solicitor General   260    243    (17)   248    1,028    1,028    -    1,126 
Social Development and Poverty Reduction   1,136    1,162    26    1,111    4,745    4,745    -    4,689 
Tourism, Arts, Culture and Sport   60    55    (5)   39    182    182    -    427 
Transportation and Infrastructure   246    240    (6)   237    1,021    1,021    -    2,044 
Water, Land and Resource Stewardship   27    43    16    34    124    124    -    464 
Total ministries and Office of the Premier   13,401    13,780    379    12,540    55,417    56,299    882    60,780 
Management of public funds and debt   294    346    52    332    1,309    1,400    91    1,314 
Contingencies - Shared Recovery Mandate    -    -    -    -    2,200    2,200    -    - 
Contingencies - General programs, CleanBC and Climate & Emergency Response   -    -    -    -    2,300    2,300    -    1 
Pandemic Recovery Contingencies   -    -    -    151    1,000    1,000    -    - 
Funding for capital expenditures   464    382    (82)   238    4,540    4,429    (111)   2,248 
Refundable tax credit transfers   676    664    (12)   497    3,159    3,078    (81)   3,920 
Legislative Assembly and other appropriations   50    46    (4)   38    214    216    2    181 
Total appropriations   14,885    15,218    333    13,796    70,139    70,922    783    68,444 
Elimination of transactions between appropriations 2    -    (8)   (8)   (4)   (32)   (33)   (1)   (24)
Prior year liability adjustments   -    -    -    -    -    -    -    (98)
Consolidated revenue fund expense   14,885    15,210    325    13,792    70,107    70,889    782    68,322 
Expenses recovered from external entities   867    879    12    693    4,909    4,836    (73)   4,919 
Elimination of funding provided to service delivery agencies   (9,666)   (9,133)   533    (8,495)   (41,212)   (43,044)   (1,832)   (38,236)
Total direct program spending   6,086    6,956    870    5,990    33,804    32,681    (1,123)   35,005 
Service delivery agency expense                                        
School districts   2,428    2,460    32    2,253    8,356    8,533    177    7,933 
Universities   1,451    1,493    42    1,385    6,369    6,534    165    6,053 
Colleges and institutes   379    385    6    379    1,574    1,726    152    1,591 
Health authorities and hospital societies   5,601    5,379    (222)   5,043    22,645    23,815    1,170    22,814 
Other service delivery agencies   1,889    1,732    (157)   1,569    8,458    8,913    455    7,436 
Total service delivery agency expense   11,748    11,449    (299)   10,629    47,402    49,521    2,119    45,827 
Total expense   17,834    18,405    571    16,619    81,206    82,202    996    80,832 

 

 
1 Restated to reflect government’s current organization and accounting policies.
2Reflects payments made under an agreement where an expense from a voted appropriation is recorded as revenue by a special account.

 

 
  First Quarterly Report 2023/24 |   21

 

 

Updated 2023/24 Financial Forecast

 

 

Table 1.10 2023/24 Expense by Function

 

 

   Year-to-Date to June 30   Full Year 
   2023/24   Actual   2023/24   Actual 
($ millions)  Budget   Actual   Variance   2022/23 1    Budget   Forecast   Variance   2022/23 
Health 2   7,035   7,217   182   6,614   30,927   30,956   29   30,322 
Education 3    4,521    4,686    165    4,277    17,600    17,862    262    16,991 
Social services   2,087    2,061    (26)   1,783    9,158    9,148    (10)   9,652 
Protection of persons and property   567    558    (9)   567    2,324    2,319    (5)   3,483 
Transportation   569    618    49    507    2,616    2,634    18    3,319 
Natural resources and economic development   817    950    133    773    4,432    5,161    729    6,284 
Other   1,039    1,009    (30)   762    3,485    3,437    (48)   5,736 
Contingencies - Shared Recovery Mandate   -    -    -    -    2,200    2,200    -    - 
Contingencies - General programs, CleanBC and Climate & Emergency Response 4    -    -    -    -    2,300    2,300    -    - 
Pandemic Recovery Contingencies 4    -    -    -    151    1,000    1,000    -    - 
General government   456    527    71    480    1,929    1,931    2    2,326 
Debt servicing   743    779    36    705    3,235    3,254    19    2,719 
Total expense   17,834    18,405    571    16,619    81,206    82,202    996    80,832 

 

 
1 Figures have been restated to reflect government’s current accounting policies.
2 Payments for healthcare services by the Ministry of Social Development and Poverty Reduction and the Ministry of Children and Family Development made on behalf of their clients are reported in the Health function.
3 Payments for training costs by the Ministry of Social Development and Poverty Reduction made on behalf of its clients are reported in the Education function.
4 Contingencies for the prior fiscal year are reported in the relevant functions; the current year forecast is not yet allocated to functions.

 

 
22   | First Quarterly Report 2023/24  

 

 

Updated 2023/24 Financial Forecast

 

 

Table 1.11 2023/24 Capital Spending

 

 

   Year-to-Date to June 30   Full Year 
   2023/24   Actual   2023/24   Actual 
($ millions)  Budget   Actual   Variance   2022/23   Budget   Forecast   Variance   2022/23 
Taxpayer-supported                                        
Education                                        
School districts  233   184   (49)  214   1,019   990   (29)  934 
Post-secondary institutions   258    219    (39)   161    1,716    1,683    (33)   1,071 
Health   218    195    (23)   129    3,243    3,531    288    1,915 
BC Transportation Financing Authority   851    392    (459)   393    3,947    3,968    21    1,823 
BC Transit   60    22    (38)   26    232    208    (24)   100 
Government ministries   116    97    (19)   78    701    699    (2)   470 
Social housing 1    140    232    92    62    808    941    133    357 
Other   21    19    (2)   12    147    160    13    85 
Total taxpayer-supported   1,897    1,360    (537)   1,075    11,813    12,180    367    6,755 
                                         
Self-supported                                        
BC Hydro   1,145    1,099    (46)   894    3,815    3,861    46    3,919 
Columbia Basin power projects 2    2    5    3    2    9    9    -    10 
BC Railway Company   1    1    0    -    7    7    -    6 
ICBC   13    8    (5)   18    65    65    -    41 
BC Lottery Corporation 3    18    6    (12)   4    103    103    -    95 
Liquor Distribution Branch   6    2    (4)   3    28    28    -    16 
Other 4    -    -    -    -    -    -    -    78 
Total self-supported   1,185    1,121    (64)   921    4,027    4,073    46    4,165 
                                         
Total capital spending   3,082    2,481    (601)   1,996    15,840    16,253    413    10,920 

 

 
1 Includes BC Housing Management Commission and Provincial Rental Housing Corporation.
2 Joint ventures of the Columbia Power Corporation and Columbia Basin Trust.
3 Excludes right-of-use assets except for 2022/23 full year actual.
4 Includes post-secondary institutions’ self-supported subsidiaries.

 

 
  First Quarterly Report 2023/24 |   23

 

 

Updated 2023/24 Financial Forecast

 

 

Table 1.12 Capital Expenditure Projects Greater Than $50 million 1
Note: Information in bold type denotes changes from Budget 2023 released on February 28, 2023.

 

 

($ millions)  Year of
Completion
   Project
Cost to
Jun. 30, 2023
   Estimated
Cost to
Complete
   Anticipated
Total
Cost
   Internal/
Borrowing
   P3
Liability
   Federal
Gov’t
   Other
Contrib’ns
 
Schools                                
Centennial Secondary 2  2017    59    2    61    61    -    -    - 
Grandview Heights Secondary 2  2021    78    5    83    63    -    -    20 
New Westminster Secondary 2  2021    93    14    107    107    -    -    - 
Handsworth Secondary 2  2022    66    3    69    69    -    -    - 
Pexsisen Elementary and Centre Mountain Lellum Middle 2  2022    88    1    89    89    -    -    - 
Quesnel Junior School 2  2022    46    6    52    52    -    -    - 
Stitó:s Lá:lém totí:lt Elementary Middle School 2  2022    52    2    54    49    -    -    5 
Coast Salish Elementary 3  2023    22    21    43    38    -    -    5 
Burnaby North Secondary  2024    94    14    108    99             9 
Cowichan Secondary  2024    38    48    86    84    -    -    2 
Eric Hamber Secondary  2024    66    40    106    94    -    -    12 
Victoria High School  2024    80    20    100    97    -    -    3 
North East Latimer Elementary  2025    -    52    52    52    -    -    - 
Burke Mountain Secondary  2026    4    156    160    135    -    -    25 
Carson Elementary  2026    -    61    61    61    -    -    - 
New East Side Elementary  2026    -    59    59    59    -    -    - 
New Cloverley Elementary  2026    -    64    64    61    -    -    3 
Pineview Valley Elementary  2026    -    65    65    65    -    -    - 
George Pringle Secondary (formerly Westside Secondary)  2027    7    99    106    103    -    -    3 
La Vallée (Pemberton) Elementary  2027    -    66    66    66    -    -    - 
Prince Rupert Middle  2027    -    127    127    127    -    -    - 
Guildford Park Secondary  2028    -    65    65    60    -    -    5 
Tamanawis Secondary  2028    -    57    57    52    -    -    5 
Seismic mitigation program 4  2030    1,390    636    2,026    2,026    -    -    - 
Total schools       2,183    1,683    3,866    3,769    -    -    97 
Post-secondary institutions                                       
Simon Fraser University - Student Housing 2  2023    108    -    108    73    -    -    35 
University of Victoria – Student Housing  2023    200    36    236    128    -    -    108 
Capilano University                                       
– New Squamish Campus  2023    63    -    63    48    -    -    15 
Okanagan College – Student Housing  2024    16    59    75    74    -    -    1 
Capilano University – Student Housing  2024    6    52    58    41    -    -    17 
Royal Roads University - West Shore Learning Centre  2024    33    73    106    80    -    -    26 
British Columbia Institute of Technology – Student Housing  2025    27    93    120    108    -    -    12 
North Island College – Student Housing  2025    5    73    78    76    -    -    2 
The University of British Columbia                                       
– School of Biomedical Engineering  2025    35    104    139    25    -    -    114 
University of the Fraser Valley – Student Housing  2025    -    75    75    63    -    -    12 
University of Victoria                                       
– Engineering and Computer Science Building Expansion  2026    5    128    133    97    -    -    36 
Vancouver Island University – Student Housing and Dining  2026    -    88    88    87    -    -    1 
British Columbia Institute of Technology                                       
– Trades and Technology Complex  2027    1    177    178    152    -    -    26 
Douglas College – Academic and Student Housing  2027    4    289    293    203    -    -    90 
Vancouver Community College                                       
Centre for Clean Energy & Automotive Innovation  2027    -    291    291    271    -    -    20 
Total post-secondary institutions       503    1,538    2,041    1,526    -    -    515 

 

 

 

 

24   | First Quarterly Report 2023/24  

 

 

Updated 2023/24 Financial Forecast

 

 

Table 1.12 Capital Expenditure Projects Greater Than $50 million 1
Note: Information in bold type denotes changes from Budget 2023 released on February 28, 2023.

 

 

($ millions)  Year of
Completion
   Project
Cost to
Jun. 30, 2023
   Estimated
Cost to
Complete
   Anticipated
Total
Cost
   Internal/
Borrowing
   P3
Liability
   Federal
Gov’t
   Other
Contrib’ns
 
Health facilities                                       
Royal Columbian Hospital Redevelopment – Phase 1 2  2020    247    4    251    242    -    -    9 
Red Fish Healing Centre for Mental Health and Addiction - θəqiʔ ɫəwʔənəq leləm 2  2021    129    2    131    131    -    -    - 
Vancouver General Hospital – Operating Rooms                                       
Renewal – Phase 1 2  2021    101    1    102    35    -    -    67 
Peace Arch Hospital Renewal 2  2022    86    1    87    8    -    -    79 
Penticton Regional Hospital Patient Care Tower 2                                       
– Direct procurement  2022    65    11    76    18    -    -    58 
– P3 contract  2019    232    -    232    -    139    -    93 
Dogwood Lodge Long-Term Care Home Replacement  2023    56    9    65    -    -    -    65 
Lions Gate Hospital – New Acute Care Facility  2024    146    164    310    144    -    -    166 
Nanaimo Regional General Hospital – ICU/HAU Redevelopment  2024    31    29    60    22    -    -    38 
Stuart Lake Hospital Replacement  2024    61    97    158    140    -    -    18 
Clinical and Systems Transformation  2025    726    73    799    702    -    -    97 
iHealth Project – Vancouver Island Health Authority  2025    133    22    155    55    -    -    100 
Mills Memorial Hospital Replacement  2026    421    212    633    513    -    -    120 
Royal Columbian Hospital Redevelopment Phases 2 & 3 5  2026    487    757    1,244    1,182    -    -    62 
Abbotsford Long-Term Care  2027    -    211    211    157    -    -    54 
Burnaby Hospital Redevelopment - Phase 1  2027    68    615    683    633    -    -    50 
Campbell River Long-Term Care  2027    -    134    134    80    -    -    54 
Cowichan District Hospital Replacement  2027    92    1,354    1,446    1,148    -    -    298 
Dawson Creek and District Hospital Replacement  2027    23    567    590    413    -    -    177 
Delta Long-Term Care  2027    -    180    180    162    -    -    18 
New St Paul’s Hospital  2027    606    1,574    2,180    1,327    -    -    853 
New Surrey Hospital and BC Cancer Centre  2027    9    1,715    1,724    1,664    -    -    60 
Richmond Long-Term Care  2027    -    178    178    178    -    -    - 
Royal Inland Hospital Phil and Jennie Gaglardi Tower                                       
– Direct procurement  2027    62    67    129    39    -    -    90 
– P3 contract  2022    288    -    288    -    164    -    124 
Western Communities Long-Term Care  2027    -    224    224    157    -    -    67 
Centre for Children and Youth Living with Health Complexity  2028    3    219    222    193    -    -    29 
St. Vincent’s Heather Long-Term Care  2028    1    206    207    207    -    -    - 
Cariboo Memorial Hospital Redevelopment  2029    25    342    367    257    -    -    110 
FW Green Long-Term Care  2029    -    156    156    94    -    -    62 
Vancouver General Hospital –                                       
Operating Rooms Renewal – Phase 2  2029    10    322    332    312    -    -    20 
Burnaby Hospital Redevelopment Phase 2 and BC Cancer Centre  2030    -    1,731    1,731    1,703    -    -    28 
Richmond Hospital Redevelopment 6  2031    5    856    861    791    -    -    70 
Total health facilities       4,113    12,033    16,146    12,707    303    -    3,136 

 

 

 

 

  First Quarterly Report 2023/24 |   25

 

 

Updated 2023/24 Financial Forecast

 

 

Table 1.12 Capital Expenditure Projects Greater Than $50 million 1
Note: Information in bold type denotes changes from Budget 2023 released on February 28, 2023.

 

 

($ millions)  Year of
Completion
   Project
Cost to
Jun. 30, 2023
   Estimated
Cost to
Complete
   Anticipated
Total
Cost
   Internal/
Borrowing
   P3
Liability
   Federal
Gov’t
   Other
Contrib’ns
 
Transportation                                
Highway 91 Alex Fraser Bridge Capacity Improvements 2  2019    67    3    70    37    -    33    - 
Highway 1 Illecillewaet Four-Laning and Brake Check improvements 2  2021    74    1    75    59    -    16    - 
Highway 99 10-Mile Slide 2  2021    75    9    84    84     -    -    - 
Highway 4 Kennedy Hill Safety Improvements2  2022    54    -    54    40    -    14    - 
Highway 14 Corridor improvements  2023    66    11    77    48    -    29    - 
Highway 1 Chase Four-Laning  2023    99    97    196    184    -    12    - 
Highway 1 Salmon Arm West  2023    88    52    140    109    -    31    - 
Highway 91 to Highway 17 and Deltaport Way Corridor improvements  2023    241    19    260    87    -    82    91 
Kootenay Lake ferry service upgrade  2023    51    34    85    68    -    17    - 
West Fraser Road Realignment  2023    62    41    103    103    -    -    - 
Highway 1 Quartz Creek Bridge Replacement  2024    61    58    119    69    -    50    - 
Highway 1 Ford Road to Tappen Valley Road Four-Laning  2024    43    200    243    161    -    82    - 
Highway 1 Kicking Horse Canyon Phase 4 7  2024    495    106    601    386    -    215    - 
Pattullo Bridge Replacement 8  2024    722    655    1,377    1,076    301    -    - 
Highway 5 Corridor  2024    141    209    350    350    -    -    - 
Highway 1 Corridor - Falls Creek  2024    3    140    143    143    -    -    - 
BC Transit Victoria HandyDART Facility  2025    24    60    84    41    -    21    22 
Highway 1 216th - 264th Street widening  2025    59    286    345    226    -    96    23 
Highway 7 Widening - 266th St to 287th St.  2025    34    72    106    77    -    29    - 
Highway 99 / Steveston Interchange, Transit & Cycling Improvements 9  2025    39    98    137    137    -    -    - 
Highway 17 Keating Cross Overpass  2025    12    65    77    58    -    17    2 
Broadway Subway 10  2026    1,185    1,642    2,827    1,380    450    897    100 
Blackwater North Fraser Slide  2026    -    203    203    203    -    -    - 
Cottonwood Hill at Highway 97 Slide  2026    -    335    335    335    -    -    - 
Highway 1 Selkirk  2026    5    124    129    97    -    32    - 
Highway 1 Jumping Creek to MacDonald  2027    10    235    245    199    -    46    - 
Highway 1 Goldstream Safety Improvements  2027    12    150    162    162    -        - 
Belleville Terminal Replacement  2027    3    301    304    262    -    42    - 
Highway 1 R.W. Bruhn Bridge  2027    36    219    255    164    -    91    - 
Surrey Langley SkyTrain Project 11  2028    98    3,912    4,010    2,476    -    1,306    228 
Fraser River Tunnel Project 9, 12  2030    58    4,090    4,148    4,148    -    -    - 
Total transportation       3,917    13,427    17,344    12,969    751    3,158    466 
Housing                                       
Stanley New Fountain 2  2023    77    1    78    9    -    -    69 
13583 81st Ave  2023    46    4    50    37    -    -    13 
Crosstown  2024    41    31    72    61    -    -    11 
58 W Hastings  2024    39    119    158    67    -    19    72 
1015 Hastings St. Development  2025    14    137    151    110    -    22    19 
128 to 134 East Cordova St.  2025    10    156    166    36    -    27    103 
320 Hastings St. E. Redevelopment  2025    -    86    86    49    -    5    32 
Clark & 1st Ave  2026    7    102    109    75    -    -    34 
Total housing       234    636    870    444    -    73    353 
Other taxpayer-supported                                       
Nanaimo Correctional Centre Replacement  2024    124    57    181    181    -    -    - 
Royal BC Museum –                                       
Collections and Research Building  2025    31    239    270    270    -    -    - 
Total other taxpayer-supported      155    296    451    451    -    -    - 
Total taxpayer-supported       11,105    29,613    40,718    31,866    1,054    3,231    4,567 

 

 

 

 

26   | First Quarterly Report 2023/24  

 

 

Updated 2023/24 Financial Forecast

 

 

Table 1.12 Capital Expenditure Projects Greater Than $50 million 1
Note: Information in bold type denotes changes from Budget 2023 released on February 28, 2023.

 

 

($ millions)  Year of
Completion
   Project
Cost to
Jun. 30, 2023
   Estimated
Cost to
Complete
   Anticipated
Total
Cost
   Internal/
Borrowing
   P3
Liability
   Federal
Gov’t
   Other
Contrib’ns
 
Power generation and transmission                                       
BC Hydro                                       
–UBC load increase stage 2 project 2  2020    53    -    53    53    -    -    - 
–Bridge River 2 upgrade units 7 and 8 project 2  2021    74    1    75    75    -    -    - 
–LNG Canada load interconnection project 2  2021    81    1    82    58    -    -    24 
–Peace Region Electricity Supply (PRES) project 2, 13  2021    218    1    219    219    -    TBD    - 
–Mica replace units 1 to 4 generator transformers project 2  2022    76    13    89    89    -    -    - 
–Mount Lehman substation upgrade project 2  2023    55    -    55    55    -    -    - 
– G.M. Shrum G1 to 10 control system upgrade  2023    69    6    75    75    -    -    - 
– 5L063 Telkwa relocation project  2023    47    19    66    66    -    -    - 
– Lake Buntzen 1 Coquitlam Tunnel Gates Refurbishment project  2023    46    21    67    67    -    -    - 
– Street light replacement program  2023    56    19    75    75    -    -    - 
– Various Sites - NERC Critical Infrastructure Protection implementation project for cyber assets  2023    44    16    60    60    -    -    - 
– Wahleach refurbish generator project  2023    52    12    64    64    -    -    - 
– Capilano substation upgrade project  2024    61    26    87    87    -    -    - 
– Mica modernize controls project  2024    48    8    56    56    -    -    - 
– Vancouver Island radio system project  2024    42    11    53    53    -    -    - 
– Natal - 60-138 kV switchyard upgrade project  2025    29    55    84    84    -    -    - 
–Site C project 14  2025    11,669    4,331    16,000    16,000    -    -    - 
– Sperling substation metalclad switchgear replacement project  2026    37    39    76    76    -    -    - 
– Treaty Creek Terminal - Transmission Load Interconnection (KSM) project  2026    29    80    109    72    -    -    37 
– Mainwaring station upgrade project  2026    14    140    154    154    -    -    - 
Kootenay Canal modernize controls project  2028    4    57    61    61    -    -    - 
Peace to Kelly Lake stations sustainment project  2028    25    319    344    344    -    -    - 
John Hart dam seismic upgrade project  2029    89    824    913    913    -    -    - 
Bridge River 1 replace units 1-4 generators / governors project  2030    14    299    313    313    -    -    - 
Total power generation and transmission       12,932    6,298    19,230    19,169    -    -    61 
Total self-supported       12,932    6,298    19,230    19,169    -    -    61 
Total $50 million projects       24,037    35,911    59,948    51,035    1,054    3,231    4,628 

 

 

1Only projects that receive provincial funding and have been approved by Treasury Board and/or Crown corporation boards are included in this table. Ministry service plans may highlight projects that still require final approval. Capital costs reflect current government accounting policy.

2Assets have been put into service and only trailing costs remain.

3The anticipated total cost was previously reported as $52 million and has been reduced to $43 million to reflect current estimates.

4The Seismic Mitigation Program consists of all spending to date on Phase 2 of the program and may include spending on projects greater than $50 million included in the table above.

5The Royal Columbian Hospital new acute care tower is expected to be available to patients in 2025.

6The Richmond Hospital new acute care tower is expected to be available to patients in 2028.

7Kicking Horse Canyon Project costs exclude $11 million of past planning costs which are expensed.

8Pattullo Bridge forecasted to open to the public in 2024 with old bridge decommissioning to follow. Forecasted amount reflects total expenditures including capitalized and expensed items.

9Project is part of the Highway 99 Tunnel Program.

10The Broadway Subway Project forecast and value of costs incurred to date include the City of Vancouver in-kind contribution of land rights, in keeping with the approved project budget. Under current government accounting, purchased intangible assets are given accounting recognition, and contributed intangible assets, such as land use rights or licenses are not.

11Total project cost includes $3.939 billion capital costs and $0.071 billion operating costs.

12The Fraser River Tunnel is forecasted to open to the public in 2030 with the removal of the existing tunnel to follow.

13The total cost represents the gross cost of the project and has not been netted for Federal Government contributions. The Federal Government’s contribution amount is dependent on the final actual project costs and what costs are eligible under the agreement.

14The approved updated project cost estimate is $16 billion, with a project in-service date of 2025 (first and last generating unit in-service in December 2024 and 2025, respectively). The anticipated project cost and cost to date include capital costs, charges subject to regulatory deferral and certain operating expenditures.

 

 

  First Quarterly Report 2023/24 |   27

 

 

Updated 2023/24 Financial Forecast

 

 

Table 1.13 2023/24 Provincial Debt 1

 

   Year-to-Date to June 30   Full Year 
   2023/24   Actual   2023/24   Actual 
($ millions)  Budget   Actual   Variance   2022/23   Budget   Forecast   Variance   2022/23 
Taxpayer-supported debt                                 
Provincial government                                
Operating  -   -   -   4,710   2,440   1,871   (569)  - 
Capital 2  37,817   37,366   (451)  36,801   44,089   40,739   (3,350)  36,538 
Total provincial government  37,817   37,366   (451)  41,511   46,529   42,610   (3,919)  36,538 
Taxpayer-supported entities                                
BC Transportation Financing Authority  19,570   19,570   -   17,623   23,171   22,930   (241)  18,992 
Health authorities and hospital societies  2,147   2,047   (100)  1,833   2,381   2,380   (1)  1,983 
Post-secondary institutions  909   909   -   924   952   944   (8)  910 
Social housing 3  1,244   1,044   (200)  1,190   2,227   1,566   (661)  1,241 
Other  294   297   3   171   357   342   (15)  270 
Total taxpayer-supported entities  24,164   23,867   (297)  21,741   29,088   28,162   (926)  23,396 
Total taxpayer-supported debt  61,981   61,233   (748)  63,252   75,617   70,772   (4,845)  59,934 
Self-supported debt  30,339   30,347   8   28,795   31,607   31,562  (45  29,492 
Total debt before forecast allowance  92,320   91,580   (740)  92,047   107,224   102,334   (4,890)  89,426 
Forecast allowance  -   -   -   -   700   700   -   - 
Total provincial debt  92,320   91,580   (740)  92,047   107,924   103,034   (4,890)  89,426 

 

 

1Provincial debt is prepared in accordance with Generally Accepted Accounting Principles and presented consistent with the Debt Summary Report included in the Public Accounts . Debt is shown net of sinking funds and unamortized discounts, excludes accrued interest, and includes non-guaranteed debt directly incurred by commercial Crown corporations and debt guaranteed by the Province.

2Includes debt incurred by the government to fund the building of capital assets in the education, health, social housing and other sectors.

3Includes debt incurred by BC Housing Management Commission and the Provincial Rental Housing Corporation to fund investments in affordable housing through HousingHub. The debt forecast reflects projects that have been approved as of June 2023.

 

 

28   | First Quarterly Report 2023/24  

 

 

Updated 2023/24 Financial Forecast

 

 

Table 1.14 2023/24 Statement of Financial Position

 

 

($ millions)  Actual
March 31,
2023
   Year-to-Date
June 30,
2023
   Forecast
March 31,
2024
 
Financial assets:               
Cash and temporary investments   8,247    6,310    2,961 
Other financial assets   19,077    19,398    16,492 
Sinking funds   521    531    485 
Investments in commercial Crown corporations:               
Retained earnings   12,634    13,086    13,349 
Recoverable capital loans   28,145    29,001    30,147 
Total investments in commercial Crown corporations   40,779    42,087    43,496 
Total financial assets   68,624    68,326    63,434 
Liabilities:               
Accounts payable, accrued liabilities and others   25,402    21,045    22,305 
Deferred revenue   15,005    15,081    16,068 
Debt:               
Taxpayer-supported debt   59,934    61,233    70,772 
Self-supported debt   29,492    30,347    31,562 
Forecast allowance   -    -    700 
Total provincial debt   89,426    91,580    103,034 
Add: debt offset by sinking funds   521    531    485 
Add: foreign exchange adjustments   472    326    - 
Less : guarantees and non-guaranteed debt   (1,523)   (1,897)   (1,415)
Financial statement debt   88,896    90,540    102,104 
Total liabilities   129,303    126,666    140,477 
Net liabilities   (60,679)   (58,340)   (77,043)
Capital and other non-financial assets:               
Tangible capital assets   59,811    60,503    69,032 
Other non-financial assets   3,571    3,726    4,040 
Total capital and other non-financial assets   63,382    64,229    73,072 
Accumulated surplus (deficit)   2,703    5,889    (3,971)

 

Changes in Financial Position

 

 

($ millions)  Year-to-Date
June 30,
2023
   Forecast
March 31,
2024
 
Deficit (Surplus) for the period   (2,324)   6,674 
Change in remeasurement (gains) losses and other adjustments   (862)   - 
Decrease/(Increase) in accumulated surplus/deficit   (3,186)   6,674 
           
Capital and other non-financial asset changes:          
Taxpayer-supported capital investments   1,360    12,180 
Less: amortization and other accounting changes   (668)   (2,959)
Increase in net capital assets   692    9,221 
Increase (decrease) in other non-financial assets   155    469 
Increase in capital and other non-financial assets   847    9,690 
Increase (decrease) in net liabilities   (2,339)   16,364 
           
Investment and working capital changes:          
Investment in commercial Crown corporations:          
Decrease in retained earnings   452    715 
Self-supported capital investments   1,121    4,073 
Less: loan repayments and other accounting changes   (265)   (2,071)
Increase/(decrease) in investment in commercial Crown corporations   1,308    2,717 
Decrease in cash and temporary investments   (1,937)   (5,286)
Increase in other working capital   4,612    (587)
Increase in Investment and working capital   3,983    (3,156)
           
Increase in financial statement debt   1,644    13,208 
Changes in sinking fund debt and foreign exchange adjustments   136    508 
Decrease in guarantees and non-guaranteed debt   374    (108)
Increase in total provincial debt   2,154    13,608 

 

 

  First Quarterly Report 2023/24 |   29

 

 

 

 

 PART 2 | ECONOMIC REVIEW AND OUTLOOK 1

 

Summary

 

B.C.’s economy continues to be resilient, despite the higher-than-expected interest rate environment. Employment has posted modest gains, while strong population growth has helped to reduce job vacancies and support consumer spending. Housing markets are adjusting to higher interest rates, with increased home sales activity in recent months and robust new home construction. However, merchandise exports declined in the first half of 2023 reflecting weaker demand from B.C.’s trading partners and lower prices for key commodities compared to the first half of 2022.

 

Inflation has fallen from the high rates seen last year but prices remain elevated, particularly for food and shelter. Persistent price pressures and economic strength have led to interest rates rising higher than anticipated around the world, which are expected to weigh on domestic and external demand. While the significant uncertainty around COVID-19 disruptions has subsided compared to recent years, B.C.’s economy faces headwinds including the potential impacts of commodity price volatility, extreme weather events, and lingering supply-chain and labour disruptions amid a weaker global outlook.

 

The Ministry of Finance (Ministry) estimates that B.C.’s economy grew by 3.3 per cent in 2022. The Ministry forecasts economic growth to be 1.2 per cent in 2023 and then slow to 0.8 per cent growth in 2024 as the cumulative effect of higher interest rates works its way through the broader economy. As Chart 2.1 shows, the Ministry’s outlook for B.C. real GDP is within the range of private sector forecasters in 2023 and 2024. Ministry of Finance analysis suggests that the province’s economic growth will be stronger than the current average private sector outlook in both years. The Ministry will continue to monitor trends to assess and update the economic outlook. Over the medium-term (2025 to 2027), the Ministry expects B.C.’s economic growth to range between 2.2 per cent and 2.4 per cent annually.

 

Chart 2.1  Ministry’s Outlook for B.C. Compared to Private Sector

 

 

 

Sources: B.C. Ministry of Finance; Private Sector range (low/average/high of Economic Forecast Council subset consisting of BMO, CIBC, National Bank, RBC, Scotiabank and TD).

 

 

1 Reflects data available as of August 23, 2023, unless otherwise indicated.

 

 

First Quarterly Report 2023/24 | 31

 

 

Economic Review and Outlook

 

 

The main downside risks to B.C.’s outlook include persistent price pressures leading to higher than anticipated interest rates for longer and weaker global demand. Other risks include climate change impacts, housing affordability, and volatility in commodity and financial markets.

 

British Columbia Economic Activity and Outlook

 

B.C.’s economy has been more resilient to the impact of higher interest rates than expected. However, rates have risen further than anticipated, which is weighing on the outlook for next year. Steady economic activity is expected to support modest real GDP growth in B.C. this year as the cumulative effects of higher interest rates and elevated inflation soften domestic and global demand. The Ministry’s forecast for B.C. real GDP growth in 2023 has been revised up to 1.2 per cent from the Budget 2023 forecast of 0.4 per cent. The forecast for 2024 has been lowered to 0.8 per cent from 1.5 per cent. This revision largely reflects weaker exports and the impact of higher interest rates over a longer than expected period. Nominal GDP growth for 2023 has been revised up slightly to 2.9 per cent from 2.8 per cent, and in 2024 down to 3.3 per cent from 3.7 per cent.

 

Table 2.1 British Columbia Economic Indicators

 

 

     First Quarter  Second Quarter  Year-to-date
  All data seasonally adjusted, per cent change  Jan. to Mar. 2023
change from
Oct. to Dec. 2022
  Apr. to Jun. 2023
change from
Jan. to Mar. 2023
  Jan. to Jun. 2023
change from
Jan. to Jun. 2022
  Employment  +0.6  +0.2  +1.4
  Manufacturing shipments  -3.7  -0.9  -7.7
  Exports  +2.0  -5.7  -14.2
  Retail sales  -1.0  +2.5  +1.0
  Consumer price index 1  +5.7  +3.7  +4.7
  Housing starts  +1.2  +3.2  +19.7
  Residential sales units  +0.8  +33.7  -25.0
  Residential average sale price  -1.8  +9.3  -7.5
  Non-residential building permits  +18.1  -15.2  -10.5

 

 

1 Quarterly calculations for CPI are year-over-year, e.g. First Quarter is Jan. to Mar. 2023 change from Jan. to Mar. 2022

 

In the near-term, B.C.’s labour market is expected to see modest employment gains, supported by strong population growth. An up-tick in the unemployment rate from the historically low levels seen in 2022 is expected before trending down over the forecast horizon. Construction activity is expected to continue at high levels, supported by public sector investment. Consumer spending is forecast to ease as higher interest rates and elevated prices limit consumers’ purchasing power. Inflation is forecast to average 3.9 per cent in 2023 and 2.5 per cent in 2024. On the trade front, weaker global demand and lower prices for key commodities are expected to weigh on exports.

 

Real GDP growth over the 2025 to 2027 period is relatively unchanged from the Budget 2023 forecast. Over this period, inflation is expected to normalize and interest rates are expected to stabilize.

 

 

32 | First Quarterly Report 2023/24

 

 

Economic Review and Outlook

 

 

Labour Market

 

B.C.’s labour market growth has eased in 2023 from the rapid pace associated with the pandemic recovery. Overall, employment grew by 1.3 per cent year-to-date to July 2023 compared to the same period last year. Full-time employment increased by nearly 47,000 jobs and part-time employment decreased by about 11,000 jobs on a year-to-date basis. During this period, the number of jobs created was balanced between the public sector (+21,314 jobs) and self-employment (+19,443 jobs), while private sector jobs declined (-4,757 jobs).

 

On an industry basis, year-to-date employment gains were concentrated in the services sector (+37,643 jobs), led by educational services (+17,743 jobs); accommodation and food services (+14,943 jobs); and finance, insurance, real estate, and leasing (+10,729 jobs). Meanwhile, the largest service-sector declines were in transportation and warehousing (-7,514 jobs) and health care and social assistance (-4,557 jobs) compared to the first seven months of 2022. During this period, employment in the goods sector edged down (-1,643 jobs), where growth in construction (+11,886 jobs), agriculture (+2,829 jobs) and utilities (+1,014 jobs) was offset by declines in manufacturing (-16,571 jobs) and forestry, fishing, mining, oil, and gas (-757 jobs).

 

Employment among women accounted for the majority of growth in the labour market so far this year. Women represented 48.4 per cent of B.C.’s labour force and filled 80.8 per cent of the 46,986 new full-time jobs created in the first seven months of 2023. While total employment increased by 1.3 per cent during this period, employment among women grew by 2.1 per cent, outpacing employment growth among men at 0.6 per cent.

 

Chart 2.2  B.C. Employment

 

 

 

Sources: Statistics Canada (Labour Force Survey); Haver Analytics

 

The provincial unemployment rate has increased from the historical lows seen in 2022 as labour force growth has outpaced job gains. B.C.’s unemployment rate reached 5.4 per cent in July 2023 and averaged 5.0 per cent year-to-date, 0.2 percentage points below the national average. Meanwhile, job vacancies in the province have steadily declined since peaking in mid-2022 but remain elevated relative to pre-pandemic levels.

 

 

First Quarterly Report 2023/24 | 33

 

 

Economic Review and Outlook

 

 

The size of B.C.’s labour force increased by 1.6 per cent year-to-date to July 2023, supported by strong population growth. Meanwhile, the province’s labour force participation rate averaged 65.1 per cent, 0.1 percentage points lower than the first seven months of 2022. While the prime-age (25-54 years) labour force participation rate has surpassed its pre-pandemic five-year average, the participation rate among the 55+ years age group has fallen. An aging population poses a challenge for labour markets across the country.

 

Employee compensation (aggregate wages, salaries, and employers’ social contributions) in B.C. increased by 5.8 per cent year-to-date to March 2023 compared to the same period of 2022. So far this year, the average hourly wage rate rose by 6.0 per cent compared to the first seven months of 2022. On average, wages grew faster than the consumer price index for B.C., which increased by 4.4 per cent over the same period.

 

Outlook

 

The outlook for B.C.’s labour market remains stable but faces headwinds next year amid slower domestic and global economic activity. The Ministry forecasts employment in B.C. to increase by 1.1 per cent in 2023 (approximately +30,200 jobs), followed by annual growth of 0.8 per cent in 2024 (approximately +22,000 jobs). Over the medium-term, employment growth is forecast to average 1.3 per cent annually.

 

In the near-term, the province’s unemployment rate is expected to average 5.4 per cent in 2023 and 5.9 per cent in 2024 reflecting solid labour force growth and a broader slowdown in economic activity. Then B.C.’s unemployment rate is forecast to trend down over the medium-term to 5.1 per cent in 2027.

 

Consumer Spending and Inflation

 

Consumer spending has moderated from the strong growth observed in the past two years as the pandemic rebound has faded. Year-to-date to June, B.C. nominal retail sales rose by 1.0 per cent, tempered by higher interest rates and elevated inflation. Meanwhile, consumer prices rose by 4.4 per cent over a similar period, indicating a lower volume of sales. Year-to-date sales gains were led by increased spending at food and beverage stores (+5.8 per cent); clothing, accessories and related retailers (+15.7 per cent); and general merchandise stores (+6.4 per cent). Declines in spending were led by lower sales at building material and garden equipment and supplies dealers (-15.7 per cent) and gasoline stations (-8.7 per cent) compared to the first six months of 2022.

 

Sales at food services and drinking places in B.C., a component of the service sector, rose by 15.4 per cent year-to-date to May 2023 compared to the same period last year, partly due to higher prices.

 

Consumer sentiment has weakened amid higher interest rates and elevated inflation. The Conference Board of Canada’s consumer confidence index for B.C. averaged 79.0 points in the first eight months of 2023, 28.6 points lower than the same period of 2022. Similarly, the Bank of Canada’s latest Canadian Survey of Consumer Expectations (conducted in May 2023 before the Bank resumed hiking interest rates in June) cited high interest rates and increased living expenses across a broad range of goods and services as key concerns for Canadian consumers.

 

 

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Economic Review and Outlook

 

 

Chart 2.3  B.C. Retail Sales

 

 

 

Sources: Statistics Canada; Haver Analytics

 

Inflation has eased since peaking at 8.1 per cent in May 2022 to reach 3.0 per cent in July 2023. The slower pace partly reflects lower energy prices compared to the high prices for commodities seen in 2022 amid global supply uncertainty following Russia’s invasion of Ukraine. Despite slowing, inflation in the province and globally has not returned to the target levels observed prior to the sharp rise in 2021 and 2022. B.C.’s consumer price index averaged 4.4 per cent in the first seven months of 2023. During this period, price growth was led by shelter (+5.4 per cent) and food (+8.2 per cent). This reflects higher owned and rented accommodation costs, as well as higher prices for food purchased at both stores and restaurants. In the Bank of Canada’s (BoC) Monetary Policy Statement on July 12, 2023, the BoC forecast Canadian inflation to hover around 3 per cent before gradually slowing toward the 2 per cent target by mid-2025.

 

Chart 2.4  B.C. Inflation

 

 

 

Sources: Statistics Canada; Haver Analytics 

 

 

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Economic Review and Outlook

 

 

Outlook

 

Household consumption is expected to continue to ease in the near-term as the cumulative effects of interest rate hikes and elevated prices reduce consumers’ purchasing power. The Ministry forecasts real household consumption of goods and services to increase by 2.4 per cent in 2023, followed by 2.2 per cent growth in 2024. Then growth is expected to range between 2.3 per cent and 2.6 per cent annually in the 2025 to 2027 period.

 

The Ministry expects nominal retail sales to grow by 2.4 per cent in 2023 and by 2.5 per cent in 2024, as support from strong population growth is somewhat offset by the cooling effects of higher interest rates and slower income growth. Then over the medium-term, retail sales are expected to average 3.5 per cent growth annually.

 

While inflation has fallen from the high rates seen last year, price pressures, particularly for food and shelter, are anticipated to persist in the near-term. However, inflation is expected to gradually ease toward the BoC’s target rate of 2 per cent in the medium-term. Overall, consumer price inflation in B.C. is forecast to be 3.9 per cent in 2023, 2.5 per cent in 2024 and 2.2 per cent in 2025. Then inflation is expected to normalize, averaging 2.0 per cent in 2026 and 2027. Annual inflation rates for Canada are expected to be relatively similar to B.C. over the forecast period.

 

Housing

 

B.C. housing market activity has picked up in recent months following a decline last year in response to the sharp increase in interest rates. Still, year-to-date to July, MLS home sales decreased by 19.5 per cent compared to the first seven months of 2022. Further, the additional interest rate increases in June and July of 2023 are expected to dampen activity. On a year-to-date basis, sales decreased in every region in B.C., including Greater Vancouver (-21.8 per cent), Fraser Valley (-15.3 per cent), Okanagan-Mainline (-22.6 per cent) and Victoria (-16.8 per cent).

 

Chart 2.5  Home Sales and Price

 

 

 

Sources: Canadian Real Estate Association; Haver Analytics

 

 

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Economic Review and Outlook

 

 

Year-to-date to July, the MLS average home sale price was 5.7 per cent below the high levels seen in the same period of 2022. However, the MLS average home sale price has edged up in recent months, partly due to low inventories of homes for sale.

 

Despite recent gains, MLS composite benchmark house prices (which incorporates benchmark attributes by dwelling type in each region) decreased across many markets in B.C. on a year-to-date basis. Declines were seen in the Fraser Valley (-13.4 per cent), Vancouver Island (-9.7 per cent), Victoria (-8.7 per cent), the Okanagan Valley (-6.7 per cent) and Greater Vancouver (-5.5 per cent) compared to the first seven months of 2022.

 

Chart 2.6  Greater Vancouver HPI Benchmark Price

 

 

 

Sources: Canadian Real Estate Association; Haver Analytics

 

The impact of rising interest rates on home construction has been muted compared to home sales. Robust homebuilding activity has continued so far this year, up 17.4 per cent year-to-date to July 2023. Averaging 51,312 annualized units in the first seven months of 2023, housing starts remain well above the ten-year historical average of 39,073 units. However, a decline in both the value and number of residential building permits, a leading indicator of home construction, points to the potential for some moderation in homebuilding activity moving forward. Year-to-date to June, the value of single-dwelling permits fell by 20.7 per cent and the value of multiple-dwelling permits fell by 8.3 per cent.

 

 

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Economic Review and Outlook

 

 

Chart 2.7  B.C. Housing Starts

 

 

 

Sources: Canada Mortgage and Housing Corporation; Haver Analytics

* Historical average from Jan. 2013 to Dec. 2022

 

Outlook

 

The Ministry expects the impact of high interest rates to continue to weigh on housing market activity this year. The Ministry forecasts unit home sales to decrease by 8.5 per cent in 2023 and then increase by 13.5 per cent in 2024. Average home sale prices are expected to decrease by 3.5 per cent in 2023 and then grow by 3.0 per cent in 2024. Over the medium-term, average sales prices are forecast to increase by 2.6 per cent annually on average. Putting unit sales and prices together, the total value of home sales is forecast to decrease by 11.6 per cent in 2023, increase by 16.9 per cent in 2024, and then average 4.2 per cent growth over the 2025 to 2027 period.

 

The Ministry prudently expects B.C. housing starts to total approximately 46,700 units in 2023, 42,100 units in 2024 and then average around 40,000 units per year over the medium-term, supported by population growth and public sector investment.

 

Business and Government

 

Non-residential construction permitting has slowed from the high levels seen in 2022. The total value of non-residential building permits declined by 10.5 per cent year-to-date to June compared to the same period last year. Underlying the decline was lower permit issuance for institutional and governmental buildings (-30.8 per cent) and industrial structures (-22.5 per cent), while permit issuance increased for commercial buildings (+8.8 per cent).

 

Businesses in B.C. and at the national level have faced challenges with labour shortages and higher wage costs amid tight labour market conditions and high inflation. Year-to-date to July, the Canadian Federation of Independent Business’ 12-month small business confidence index for B.C. was 6.6 points below the same period of 2022. However, in July 2023, the index stood at 54.7 points, above the 50-point threshold, indicating that more small business owners expect stronger performance over the next year.

 

 

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Economic Review and Outlook

 

 

B.C.’s tourism sector has moderated, following a rebound in activity throughout 2022. International travelers entering B.C. rose by 107.6 per cent year-to-date to June 2023 compared to the low levels seen in early 2022. However, the number of U.S. and non-U.S. visitors have levelled off in recent months and the 646,050 international travelers entering B.C. in June 2023 remained below the roughly 700,000 visitors seen in an average month prior to the pandemic.

 

Outlook

 

The Ministry forecasts total real investment in B.C. to rise by 3.7 per cent in 2023, supported by increases in residential construction and government capital investment. Then total real investment is projected to grow by 2.8 per cent in 2024, and range between 1.9 per cent and 2.2 per cent growth annually over the medium-term.

 

In the near-term, real business investment is projected to decrease by 1.3 per cent in 2023 and then increase by 1.0 per cent in 2024, reflecting the dampening effects of higher interest rates. Over the 2025 to 2027 period, real business investment growth is expected to range between 2.4 per cent and 2.9 per cent annually.

 

Real expenditure on goods and services by all levels of government is forecast to rise by 1.1 per cent in 2023 and then decline by 2.8 per cent in 2024 due to the timing and one-time nature of some government expenditures, such as the 2022/23 Supplementary Estimates. In real terms, government expenditures are forecast to be relatively stable over the medium-term.

 

The Ministry expects nominal net operating surplus of corporations (an approximation of corporate profits) to decrease by 11.8 per cent in 2023 and by 9.1 per cent in 2024 amid slower global economic activity. Then, net operating surplus of corporations is forecast to increase between 1.5 per cent and 4.7 per cent in the 2025 to 2027 period.

 

External Trade and Commodity Markets

 

So far this year, weaker global demand and lower prices for key commodities have lowered B.C. merchandise exports. During the first six months of 2023, the value of B.C. goods exports decreased by 14.2 per cent compared to the same period of 2022. Year-to-date declines were broad-based, led by decreases in exports of forestry products and building and packaging materials (-30.2 per cent) and energy products (-17.0 per cent). Meanwhile, exports of electronic and electrical equipment and parts (+17.1 per cent) and industrial machinery, equipment and parts (+16.2 per cent) increased on a year-to-date basis.

 

Merchandise exports to the U.S. accounted for 54.6 per cent of B.C.’s total goods exports in the first six months of 2023. During this period, goods exports to the U.S. fell by 15.9 per cent, largely due to a decline in forestry products and building and packaging materials (-36.0 per cent). Meanwhile, total goods exports to non-U.S. destinations decreased by 12.1 per cent, led by a drop in energy exports (-17.9 per cent).

 

 

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Economic Review and Outlook

 

 

Chart 2.8  B.C. Exports

 

 

 

Source: BC Stats

 

B.C.’s manufacturing shipments decreased by 7.7 per cent year-to-date to June 2023 compared to the same period of 2022, mainly due to reduced shipments of wood products (-36.8 per cent).

 

In 2022, the war in Ukraine, persistent supply-chain disruptions and strong demand led to rapid growth in commodity prices. However, prices for some commodities have declined this year reflecting reduced demand in the manufacturing sector amid high interest rates and slower global economic activity. The price of Western spruce-pine-fir (SPF) 2x4 lumber averaged $393 US/000 board feet during the January to July period of 2023, down 61.6 per cent compared to the same period of 2022.

 

Energy prices have softened amid concerns over a broader global economic slowdown. In the first seven months of 2023, the West Texas Intermediate (WTI) oil price averaged $75.08 per barrel, down 26.1 per cent from the same period of 2022. Similarly, the plant inlet price of natural gas fell 53.2 per cent year-to-date, averaging $1.94 C/GJ in the first seven months of 2023.

 

Meanwhile, the average metallurgical coal price fell by 34.1 per cent year-to-date to July 2023 compared to the same period of 2022 amid weaker market conditions. Zinc and copper declined by 25.5 per cent and 8.2 per cent, respectively. The price for molybdenum rose 44.6 per cent, while price gains for gold and silver were modest compared to the first seven months of 2022.

 

Outlook

 

Real exports of goods and services are forecast to grow by 0.7 per cent in 2023 and decrease by 0.2 per cent in 2024 reflecting lower commodity prices and weaker global demand. Then, real exports of goods and services are expected to grow between 2.8 per cent and 5.6 per cent annually in the 2025 to 2027 period.

 

 

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Economic Review and Outlook

 

 

The price of lumber is forecast to average $400 US/000 board feet in 2023 and $450 US/000 board feet in 2024, before levelling off at $500 US/000 board feet over the medium-term. The plant inlet price for natural gas is expected to average $1.29 C/GJ in 2023/24, $2.03 C/GJ in 2024/25, and $2.33 C/GJ in 2025/26.

 

Demographics

 

On April 1, 2023, B.C.’s population was 5.44 million people, up 3.1 per cent from the same date in 2022. During the January to March period of 2023, the province welcomed 40,128 net migrants, up 66.6 per cent compared to the same period of 2022 and continuing the strong growth seen in recent quarters. The increase in immigration in the first three months of 2023 reflects higher net international migration (from +21,266 persons to +40,840 persons), which offset a decline in net interprovincial migration (from +2,816 persons to -712 persons) compared to the same period last year.

 

Outlook

 

B.C.’s July 1 population is projected to increase by 3.2 per cent in 2023, 2.9 per cent in 2024, and then average 1.7 per cent annual growth over the medium-term.

 

Total net migration is expected to be about 173,500 persons in 2023 and 118,100 persons in 2024. Looking beyond, total net migration is projected to taper down to around 98,800 persons in 2027. Over the forecast horizon, international migrants are expected to average around 95 per cent of total migrants, which is higher than recent historical levels, reflecting higher federal immigration targets and the entry of more non-permanent residents.

 

Risks to the Economic Outlook

 

There are some upside risks to B.C.’s economy, such as inflationary pressures easing sooner than expected and a less pronounced slowing of the global economy. However, risks are weighted to the downside. Downside risks to B.C.’s economic outlook include the following:

 

·persistent high inflation reducing affordability, and leading to higher interest rates over a longer period;

 

·uncertainty around the extent of the impact of higher interest rates on consumer and business borrowing, as well as housing markets;

 

·aging demographics and housing affordability weighing on the supply of labour;

 

·weaker than expected global economic activity, geopolitical conflict weighing on trade and commodity markets, and broader economic challenges in Europe and Asia;

 

·severe climate-related events disrupting the lives and livelihoods of British Columbians, destroying productive capital, and impacting economic activity;

 

·lower prices for B.C.’s major commodity exports, such as lumber, pulp, natural gas, and coal;

 

·higher volatility in international foreign exchange, stock, and bond markets; and

 

·timing of investment and hiring related to the LNG Canada project, similar to the risks that exist for other major capital projects.

 

 

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Economic Review and Outlook

 

 

External Outlook

 

The economic outlook for most of B.C.’s major trading partners has improved for 2023 and worsened for 2024 compared to Budget 2023, reflecting the delayed impact of interest rate increases on global economies. Although global inflation has been easing since the start of 2023, core inflation and specific components, including food prices, have remained elevated. In addition, labour market conditions across numerous countries continue to be tight. While many of B.C.’s major trading partners saw stronger economic activity this year than originally anticipated, the effects of rising interest rates on consumption, investment, and exports, coupled with geopolitical uncertainties, may present economic challenges both later this year and into 2024. As inflation returns to target levels, global economic activity is expected to pick up once again over the medium-term.

 

United States

 

The U.S. economy showed resilience in the first half of 2023, despite a restrictive monetary policy environment. U.S. real GDP grew by an annualized rate of 2.4 per cent in the second (April to June) quarter of 2023, following annualized growth of 2.0 per cent in the first (January to March) quarter. The second quarter growth reflected an increase in consumer spending, primarily on services, and gains in non-residential investment. The increases were partially offset by declines in exports and residential investment compared to the first quarter.

 

Chart 2.9  U.S. Real GDP

 

 

 

Sources: U.S. Bureau of Economic Analysis; Haver Analytics

 

As of July 2023, the U.S. labour market had recorded net payroll job gains for 31 consecutive months. On a year-to-date basis, employment was 4.0 million jobs (+2.7 per cent) above the first seven months of last year. The unemployment rate was 3.5 per cent in July 2023, and was 0.1 percentage points lower on average in the first seven months of 2023 compared to the same period in 2022. Year-to-date to July 2023, the average duration of unemployment was down 14.4 per cent compared to the same period last year and 6.4 per cent lower when compared to the same period in 2019, before the pandemic. However, the U.S. labour force participation rate was 62.6 per cent in July 2023, 0.7 percentage points lower than February 2020, contributing to an already tight labour market.

 

 

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Economic Review and Outlook

 

 

U.S. home sales activity rebounded in the first half of 2023 but generally remains below the levels reached in the past several years. Year-to-date to July 2023, existing home sales were 23.5 per cent lower while new single-family home sales were 1.1 per cent higher compared to the same period last year. The median sales price was down on a year-to-date basis for both existing (-0.6 per cent) and new single-family homes (-3.8 per cent). Similarly, U.S. housing starts declined 13.1 per cent in the first seven months of 2023 compared to the same period of 2022, reflecting fewer single-family starts (-18.6 per cent) and multi-family starts (-1.6 per cent). Furthermore, U.S. residential building permits, an indicator of future building activity, declined by 19.1 per cent in the first seven months of 2023 compared to the same period last year.

 

Chart 2.10  U.S. Housing Starts

 

 

 

Sources: U.S. Census Bureau; Haver Analytics

 

Year-to-date to July 2023, U.S. nominal retail sales were up by 3.3 per cent compared to the first seven months of 2022. However, growth in U.S. retail sales has slowed and was flat in the second quarter of 2023. Furthermore, retail sales (measured in nominal dollars) has been boosted by lingering inflation and estimates of real retail sales growth are negative in the first seven months of 2023 compared to the same period last year.

 

Following its peak of 9.1 per cent (year-over-year) in June 2022, consumer price inflation in the U.S. declined in 12 of the last 13 months and was 3.2 per cent in July 2023. The downward trend in consumer price inflation in 2023 partly reflects easing demand and lower commodity prices.

 

The US Conference Board Consumer Confidence Index has improved in recent months, including substantial gains in June and July. Year-to-date to July 2023, U.S. consumer confidence averaged 106.7 points, which was 2.4 points above the same period last year.

 

 

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Economic Review and Outlook

 

 

Year-to-date to June 2023, the value of U.S. merchandise exports decreased slightly (-0.1 per cent). The decline was led by lower exports of petroleum and natural gas products, which were partly offset by higher pharmaceutical exports.

 

Outlook

 

In July 2023, Consensus Economics (Consensus) projected U.S. economic growth of 1.6 per cent in 2023 compared to 0.3 per cent in the January 2023 Consensus survey. Meanwhile for 2024, Consensus forecasts growth of 0.5 per cent.

 

Table 2.2 U.S. Real GDP Forecast: Consensus versus B.C. Ministry of Finance

 

   2023   2024 
   Per cent change in real GDP 
B.C. Ministry of Finance   1.8    0.4 
Consensus Economics (July 2023*)   1.6    0.5 

 

 

* Comparable month to B.C. Ministry of Finance forecast.

 

The potential for further interest rate increases by the Federal Reserve in the latter half of 2023 is expected to exert pressure on the U.S. economy in the near-term. In addition, geopolitical tensions worldwide and the slowdown of the global economy increases risk for trade and economic growth. Based on these uncertainties, the Ministry assumes that U.S. real GDP will grow by 1.8 per cent in 2023 and by 0.4 per cent in 2024, while averaging 1.8 per cent annually over the 2025 to 2027 period.

 

Chart 2.11  Consensus Outlook for the U.S. in 2023

 

Forecast annual per cent change in U.S. real GDP, 2023

 

 

Source: Consensus Economics

The chart above represents forecasts for U.S. real GDP growth in 2023 as polled on specific dates. For example, forecasters surveyed on January 10, 2022 had an average 2023 U.S. real GDP growth forecast of 2.6 per cent, while on August 7, 2023 they forecast 2023 U.S. real GDP to grow by 1.9 per cent.

 

 
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Economic Review and Outlook

 

 

Canada

 

The Canadian economy grew 3.1 per cent (annualized) in the first quarter of 2023, following a decline of 0.1 per cent (annualized) in the fourth (October to December) quarter of 2022. Real GDP growth in the first quarter was driven by gains in consumer spending and net exports. Consumer spending grew by 5.7 per cent compared to the fourth quarter of 2022, driven by increases in durable goods expenditure, particularly for motor vehicles. Exports grew by 10.1 per cent supported by shipments of motor vehicles, precious metals and agricultural goods. However, increases were partially offset by a slowdown in inventory accumulations and lower residential investment, which fell 14.6 per cent (annualized) in the first quarter of 2023.

 

Chart 2.12  Canadian Real GDP

 

Canadian real GDP (chained 2012 $ billions, saar)

 

 

 

Sources: Statistics Canada; Haver Analytics

 

After rising by 4.0 per cent in 2022, Canadian employment continued to grow in 2023 but at a slower pace. Year-to-date to July 2023, employment was up by 2.4 per cent compared to the same period last year. The unemployment rate, which had held steady at 5.0 per cent since December 2022, rose from 5.2 per cent in May 2023 to 5.5 per cent in July, partly reflecting labour force increases. Year-to-date to July, the unemployment rate was 0.2 percentage points lower compared to the first seven months of 2022 and averaged 5.2 per cent.

 

Job vacancies have fallen 11.9 per cent between the first quarter of 2022 and the first quarter of 2023 but remain elevated compared to pre-2020 levels. Year-to-date to July 2023, Canada’s labour force participation rate has remained consistent at 65.6 per cent, slightly above the rate from the same period in 2022. While the participation rate for the prime- age cohort (25-54 years) has been near record highs in 2023 so far, the participation rate among the 55+ years age group is below its pre-pandemic five-year average. The Bank of Canada’s latest Business Outlook Survey released in June 2023 reports that although labour shortages remain a concern for firms, most notably in sectors such as manufacturing, construction, and retail trade, there are signs of improving conditions due to increased labour supply. 

 

 

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Economic Review and Outlook

 

 

Partly due to higher interest rates, Canadian housing market activity continued to weaken in the first quarter of 2023 before posting a modest rebound in the second quarter. Despite the rebound, housing starts were down 8.1 per cent year-to-date to July compared to the same period last year. The decline so far in 2023 was primarily driven by slower construction in urban centers of Montreal and Edmonton but was partially offset by growth in Toronto and Vancouver. Canadian MLS home sales increased by 17.0 per cent in the second quarter of 2023; however, due to declines earlier in the year, they were down by 20.0 per cent year-to-date to July. The national average home sale price declined by 6.5 per cent year-to-date to July 2023.

 

Canadian nominal retail sales were up 2.2 per cent year-to-date to June compared to the same period last year, partly driven by stronger sales at motor vehicle and parts dealers. On a volume basis, Canadian retail sales were up 1.4 per cent year-to-date to June.

 

Driven in part by rising interest rates and falling energy prices, consumer price inflation in Canada has decelerated in 2023. Year-over-year, national inflation declined to 3.3 per cent in July 2023 (compared to the 8.1 per cent peak in June 2022), which is still above the Bank of Canada’s target range. In July, food (+7.8 per cent, year-over-year) and shelter (+5.1 per cent, year-over-year) prices added the most upward pressure on national inflation.

 

After rising 24.9 per cent in 2022, Canadian merchandise exports declined in the first half of 2023 as commodity prices decreased. Year-to-date to June, the value of Canadian merchandise exports declined by 1.0 per cent compared to the same period in 2022, led by lower exports of energy products (-18.0 per cent), and forestry products and building and packaging materials (-20.1 per cent). Services exports were up 12.9 per cent on a year-to-date basis led by the continued recovery of travel services.

 

Outlook

 

The July 2023 Consensus forecasts Canadian real GDP to rise by 1.4 per cent in 2023 (1.0 percentage points higher than the January 2023 survey) and by 0.9 per cent in 2024.

 

Table 2.3 Canadian Real GDP Forecast: Consensus versus B.C. Ministry of Finance

 

   2023   2024 
   Per cent change in real GDP 
B.C. Ministry of Finance   1.4    0.8 
Consensus Economics (July 2023*)   1.4    0.9 

 

 

* Comparable month to B.C. Ministry of Finance forecast.

 

The impact of higher interest rates on household spending and business investment, along with weaker exports attributed to global economic activity, could create headwinds for the Canadian economy. The Ministry assumes that the Canadian economy will grow by 1.4 per cent in 2023, 0.8 per cent in 2024 and then average 1.9 per cent annual growth over the 2025 to 2027 period.

 

 

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 Economic Review and Outlook

 

 

Chart 2.13  Consensus Outlook for Canada in 2023

 

Forecast annual per cent change in Canadian real GDP, 2023

 

  

 

Source: Consensus Economics

 

The chart above represents forecasts for Canadian real GDP growth in 2023 as polled on specific dates. For example, forecasters surveyed on January 10, 2022 had an average 2023 Canadian real GDP growth forecast of 3.0 per cent, while on August 7, 2023 they forecast 2023 Canadian real GDP to grow by 1.5 per cent.

 

Asia

 

China’s economy witnessed a robust recovery in the first quarter of 2023, marked by the lifting of pandemic restrictions, leading to real GDP growing at an annualized rate of 12.0 per cent. However, real GDP in the second quarter declined by an annualized rate of 1.7 per cent. The underperformance of China’s economy in the second quarter reflected several factors, including a rising youth unemployment rate, a weak housing market, and weaker exports due to waning global demand. China’s consumer price inflation rate has been below 2 per cent since February 2023 and turned negative in July. The People’s Bank of China reduced its main benchmark lending rates in both June and August to stimulate demand.

 

Japan’s economy grew at an annualized rate of 6.0 per cent in the second quarter of 2023, following an increase of 3.7 per cent in the first quarter. Growth in the second quarter was supported by exports, particularly for vehicles and tourism, as well as residential construction. Meanwhile, consumption declined as the fall in the value of the Yen increased import prices. In July, the Bank of Japan adjusted its yield curve control policy, allowing long-term interest rates to rise.

 

Outlook

 

The July 2023 Consensus forecasted that China’s real GDP will grow by 5.5 per cent in 2023 and 4.8 per cent in 2024. However, worsening geopolitical tensions, continued weakness in the property market and a slowdown in external demand could present headwinds for China’s economic growth. The Ministry prudently forecasts that China’s economy will expand by 5.3 per cent in 2023, 4.6 per cent in 2024, and average 4.4 per cent annual growth over the 2025 to 2027 period.

 

 

 

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Economic Review and Outlook

 

 

The July 2023 Consensus expected Japan real GDP growth of 1.2 per cent in 2023 and 1.0 per cent in 2024. In recognition of downside risks, the Ministry assumes a more moderate pace of growth in Japan’s real GDP. The Ministry forecasts economic activity to rise by 1.0 per cent in 2023 and 0.8 per cent in 2024, and average 0.5 per cent annual growth over the 2025 to 2027 period.

 

Europe

 

Economic activity in the euro zone in 2023 has been dampened by elevated inflation and rising interest rates. However, growth improved in the second quarter as annualized real GDP in the euro zone increased by 1.0 per cent, following a 0.1 per cent increase in the first quarter. On a year-to-date basis through the second quarter of 2023 compared to the same period last year, Spain, France, and Italy contributed to euro zone economic growth while Germany’s economy contracted.

 

Despite headline inflation easing to 5.3 per cent year-over-year in July, it remained well above the European Central Bank’s (ECB) 2 per cent target with some components remaining persistently high (such as food prices). On July 27, 2023 (effective August 2, 2023), the ECB announced its ninth straight interest rate increase, bringing the deposit rate to 3.75 per cent, its highest level since 2000, and kept options open for further rate increases in the future if appropriate.

 

Outlook

 

The July 2023 Consensus forecasted that the euro zone economy would grow by 0.5 per cent in 2023 and 0.9 per cent in 2024. Tighter monetary conditions, a global demand slowdown and ongoing geopolitical tensions are expected to create headwinds for the euro zone economy throughout the rest of 2023 and into 2024. As such, the Ministry forecasts real GDP to grow by 0.4 per cent in 2023, 0.7 per cent in 2024, and average 1.2 per cent over the 2025 to 2027 period.

 

Financial Markets

 

Interest Rates

 

The U.S. Federal Reserve (Fed) continued its interest rate hikes in the first half of 2023 to reduce inflation. The Fed has increased rates four times in 2023, each time by 0.25 percentage points (pp), with the last increase in July bringing the target range for the federal funds rate to 5.25 to 5.50 per cent, the highest level since January 2001. Throughout 2023, the Federal Reserve also continued to reduce its holdings of Treasury securities, agency debt and mortgage-backed securities. Comparing their June 2023 projections to those released prior to Budget 2023 (December 2022), the Fed is anticipating stronger economic growth and lower unemployment in 2023, weaker economic growth in 2024, and higher core inflation over the 2023 to 2025 period. The Fed also left the door open for additional policy tightening in future meetings if deemed appropriate.

 

Following a pause in interest rate increases through the spring, the Bank of Canada (BoC) surprised markets by increasing interest rates twice in the summer. In both June and July, the BoC increased its target for the overnight interest rate by 0.25 pp, bringing the target for the overnight rate to 5.00 per cent, the highest rate since March 2001.

 

 

48  |

First Quarterly Report 2023/24

 

 

Economic Review and Outlook

 

 

The BoC’s increases to the policy interest rate reflected its view that monetary policy was not tight enough to return supply and demand back to balance and bring inflation sustainably back to target. In their July interest rate announcement, the BoC noted that global consumer price inflation was on a downward trend, largely due to lower energy prices, but underlying price pressures remained and core inflation was persistent. Looking ahead, the BoC projects inflation to remain close to 3 per cent until the middle of 2024, before reaching the 2 per cent target in the middle of 2025.

 

Chart 2.14  Interest Rate Forecasts

 

 

  

Sources: Bank of Canada; U.S. Federal Reserve; and B.C. Ministry of Finance forecasts.

 

Outlook

 

Both the U.S. Federal Reserve and the Bank of Canada expect that additional interest rate increases could be necessary if inflationary pressures persist, but emphasized that any rate changes will be dependent on economic data. Based on the average of six private sector forecasts as of July 21, 2023, the Ministry assumes that the U.S. federal funds rate will average 5.20 per cent in 2023 and 5.11 per cent in 2024. By comparison, the Bank of Canada’s target for the overnight rate is expected to average 4.74 per cent in 2023 and 4.54 per cent in 2024.

 

The Canadian three-month treasury bill interest rate is expected to average 4.79 per cent in 2023 and 4.42 per cent in 2024, according to the same six private sector forecasters. Meanwhile, the 10-year Government of Canada bond rate is assumed to average 3.19 per cent in 2023 and 3.10 per cent in 2024.

 

 

 

First Quarterly Report 2023/24 |  49

 

 

Economic Review and Outlook

 

 

Table 2.4 Private Sector Canadian Interest Rate Forecasts

 

 

    3-month Treasury Bill     10-year Government Bond
Average annual interest rate (per cent)   2023   2024     2023   2024
BMO   4.82   4.50     3.22   3.11
CIBC   4.85   4.36     3.25   3.06
National Bank   4.74   4.29     3.19   3.13
RBC   4.78   4.63     3.10   2.86
Scotiabank   4.80   4.50     3.15   3.43
TD   4.76   4.22     3.21   3.04
Average (as of July 21, 2023)   4.79   4.42     3.19   3.10

 

Exchange Rates

 

Since the fourth quarter of 2022, reduced global economic uncertainty, along with slower inflation decreased the demand for safe-haven assets such as the U.S. dollar and contributed to a modest appreciation of the Canadian dollar. During the first seven months of 2023, the Canadian dollar averaged 74.4 US cents.

 

Chart 2.15  Private Sector Expectations for the Canadian Dollar

 

 

Sources: Bank of Canada and B.C. Ministry of Finance forecasts.

 

* Based on the average of private sector forecasts. First Quarterly Report 2023 as of July 21, 2023 and Budget 2023 as of January 5, 2023. 

 

 

50 | First Quarterly Report 2023/24  

 

 

Economic Review and Outlook

 

 

Outlook

 

Based on the average of six private sector forecasts as of July 21, 2023, the Ministry assumes the Canadian dollar will average 74.7 US cents in 2023 and edge up to 75.8 US cents in 2024.

 

Table 2.5 Private Sector Exchange Rate Forecasts

 

 

Average annual exchange rate (US cents/Canadian $)   2023   2024
BMO   75.2   77.7
CIBC   74.9   77.0
National Bank   74.0   73.1
RBC   74.1   74.2
Scotiabank   75.4   79.0
TD   74.6   73.7
Average (as of July 21, 2023)   74.7   75.8

 

 

First Quarterly Report 2023/24 |  51

 

 

Economic Review and Outlook

 

 

Table 2.6.1 Gross Domestic Product (GDP): British Columbia

 

 

           Forecast 
   2021   2022 e   2023   2024   2025   2026   2027 
Gross Domestic Product at Market Prices:                         
– Real (chained 2012 $ billions)   282.1    291.3    294.7    297.0    304.1    311.0    317.7 
(% change)   6.1    3.3    1.2    0.8    2.4    2.3    2.2 
– Nominal (current prices, $ billions)   350.6    391.7    403.2    416.4    434.2    452.2    471.4 
(% change)   14.2    11.7    2.9    3.3    4.3    4.2    4.2 
– GDP price deflator (2012 = 100)   124.3    134.4    136.8    140.2    142.7    145.4    148.4 
(% change)   7.6    8.2    1.8    2.5    1.8    1.9    2.0 
Real GDP per person (chained 2012 $)   54,227    54,772    53,680    52,586    52,941    53,251    53,480 
(% change)   5.2    1.0    -2.0    -2.0    0.7    0.6    0.4 
Real GDP per employed person                                   
(% change)   0.0    0.1    0.1    0.0    1.1    1.0    0.9 
Unit labour cost1 (% change)   6.0    7.2    4.7    4.3    2.2    1.6    1.6 
                                    
Components of Real GDP at Market Prices (chained 2012 $ billions)                 
Household expenditure on goods and services   182.5    188.9    193.4    197.7    202.1    206.9    212.3 
(% change)   7.3    3.5    2.4    2.2    2.3    2.4    2.6 
– Goods   78.3    75.8    75.1    75.2    76.0    77.1    78.2 
(% change)   7.9    -3.2    -0.9    0.1    1.1    1.4    1.5 
– Services   104.4    113.2    118.4    122.6    126.3    130.0    134.2 
(% change)   6.8    8.5    4.5    3.6    3.0    2.9    3.3 
NPISH2 expenditure on goods and services   4.5    4.7    4.8    5.0    5.1    5.2    5.3 
(% change)   2.9    4.9    2.9    2.5    2.2    1.9    1.9 
Government expenditure on goods and services   53.6    55.5    56.1    54.5    54.6    54.7    54.7 
(% change)   7.9    3.5    1.1    -2.8    0.1    0.1    0.1 
Investment in fixed capital   77.0    79.0    81.9    84.2    86.0    87.6    89.4 
(% change)   10.5    2.6    3.7    2.8    2.2    1.9    2.0 
                                    
Final domestic demand   318.3    328.7    336.9    342.0    348.4    354.9    362.1 
(% change)   8.1    3.3    2.5    1.5    1.9    1.9    2.0 
                                    
Exports of goods and services   99.0    105.8    106.6    106.4    112.4    117.3    120.6 
(% change)   3.2    6.9    0.7    -0.2    5.6    4.4    2.8 
Imports of goods and services   136.1    144.2    148.3    150.8    156.1    160.8    164.9 
(% change)   10.3    5.9    2.8    1.7    3.5    3.0    2.5 
Inventory change   1.7    1.7    0.3    0.1    0.1    0.2    0.4 
Statistical discrepancy   0.0    0.0    0.0    0.0    0.0    0.0    0.0 
                                    
Real GDP at market prices   282.1    291.3    294.7    297.0    304.1    311.0    317.7 
(% change)   6.1    3.3    1.2    0.8    2.4    2.3    2.2 

 

 

1Unit labour cost is the nominal cost of labour incurred to produce one unit of real output.
2Non-profit institutions serving households.
eB.C. Ministry of Finance estimate.

 

 

52   | First Quarterly Report 2023/24  

 

 

Economic Review and Outlook

 

 

Table 2.6.2 Selected Nominal Income and Other Indicators: British Columbia

 

 

           Forecast 
   2021   2022   2023   2024   2025   2026   2027 
Compensation of employees1 ($ millions)   171,837    190,233    201,523    211,895    221,663    230,229    238,904 
(% change)   12.5    10.7    5.9    5.1    4.6    3.9    3.8 
                                    
Household income ($ millions)   306,148    326,780e   347,506    362,161    377,041    391,619    406,986 
(% change)   5.5    6.7    6.3    4.2    4.1    3.9    3.9 
                                    
Net operating surplus ($ millions)   44,601    53,878e   47,511    43,173    43,829    45,476    47,615 
(% change)   26.3    20.8    -11.8    -9.1    1.5    3.8    4.7 
                                    
Retail sales ($ millions)   104,653    107,889    110,481    113,252    117,110    121,203    125,506 
(% change)   12.6    3.1    2.4    2.5    3.4    3.5    3.5 
                                    
Housing starts (units)   47,607    46,721    46,727    42,140    40,024    40,044    40,063 
(% change)   26.2    -1.9    0.0    -9.8    -5.0    0.0    0.0 
                                    
Residential sales ($ millions)   115,729    80,559    71,182    83,181    89,336    91,746    94,109 
(% change)   57.7    -30.4    -11.6    16.9    7.4    2.7    2.6 
                                    
Residential sales (units)   124,769    80,848    73,996    83,980    88,032    88,090    88,110 
(% change)   32.9    -35.2    -8.5    13.5    4.8    0.1    0.0 
                                    
Residential average sale price ($)   927,549    996,428    961,969    990,489    1,014,818    1,041,503    1,068,077 
(% change)   18.7    7.4    -3.5    3.0    2.5    2.6    2.6 
                                    
Consumer price index (2002 = 100)   136.1    145.5    151.2    155.0    158.4    161.5    164.8 
(% change)   2.8    6.9    3.9    2.5    2.2    2.0    2.0 

 

 

1Domestic basis; wages, salaries and employers’ social contributions.
eB.C. Ministry of Finance estimate.

 

Table 2.6.3 Labour Market Indicators: British Columbia

 

 

           Forecast 
   2021   2022   2023   2024   2025   2026   2027 
Population (thousands at July 1)   5,202    5,319    5,490    5,648    5,745    5,840    5,941 
(% change)   0.9    2.2    3.2    2.9    1.7    1.7    1.7 
                                    
Net migration (thousands)                                   
– International1,4   67.6    150.8    173.6    117.6    94.3    86.7    86.8 
– Interprovincial4   27.2    0.5    -0.1    0.5    2.3    10.8    12.0 
– Total   94.8    151.3    173.5    118.1    96.6    97.5    98.8 
                                    
Labour force population2 (thousands)   4,350    4,426    4,510    4,643    4,741    4,834    4,927 
(% change)   1.2    1.7    1.9    3.0    2.1    2.0    1.9 
                                    
Labour force (thousands)   2,852    2,881    2,936    2,974    3,006    3,035    3,066 
(% change)   3.3    1.0    1.9    1.3    1.1    1.0    1.0 
                                    
Participation rate3 (%)   65.6    65.1    65.1    64.1    63.4    62.8    62.2 
                                    
Employment (thousands)   2,664    2,748    2,778    2,800    2,837    2,873    2,909 
(% change)   6.2    3.2    1.1    0.8    1.3    1.2    1.2 
                                    
Unemployment rate (%)   6.6    4.6    5.4    5.9    5.6    5.3    5.1 

 

 

1International migration includes net non-permanent residents and returning emigrants less net temporary residents abroad.
2The civilian, non-institutionalized population 15 years of age and over.
3Percentage of the labour force population in the labour force.
4Components may not sum to total due to rounding.

 

 

  First Quarterly Report 2023/24 |  53

 

 

Economic Review and Outlook

 

 

Table 2.6.4 Major Economic Assumptions

 

 

           Forecast 
   2021   2022   2023   2024   2025   2026   2027 
Real GDP                                   
Canada (chained 2012 $ billions)   2,103    2,176    2,206    2,224    2,268    2,309    2,351 
(% change)   5.0    3.4    1.4    0.8    2.0    1.8    1.8 
U.S. (chained 2012 US$ billions)   19,610    20,014    20,374    20,456    20,865    21,241    21,602 
(% change)   5.9    2.1    1.8    0.4    2.0    1.8    1.7 
Japan (chained 2015 Yen trillions)   540    546    551    556    559    562    565 
(% change)   2.2    1.0    1.0    0.8    0.6    0.5    0.5 
China (constant 2010 US$ billions)   12,775    13,157    13,855    14,492    15,130    15,795    16,490 
(% change)   8.4    3.0    5.3    4.6    4.4    4.4    4.4 
Euro zone1 (chained 2015 Euro billions)   11,301    11,687    11,733    11,815    11,969    12,113    12,258 
(% change)   5.4    3.4    0.4    0.7    1.3    1.2    1.2 
                                    
Industrial production index (% change)                                   
U.S.   4.4    3.4    -0.3    -0.8    2.0    1.7    1.7 
Japan   5.6    0.1    -0.8    1.4    0.9    0.7    0.7 
China   10.9    3.8    4.2    4.3    4.1    4.1    4.1 
Euro zone1   8.9    2.3    -0.7    1.1    1.6    1.2    1.2 
                                    
Housing starts (thousands)                                   
Canada   271    262    225    205    200    200    200 
(% change)   24.5    -3.4    -14.1    -8.9    -2.4    0.0    0.0 
U.S.   1,601    1,553    1,380    1,345    1,350    1,350    1,350 
(% change)   16.0    -3.0    -11.1    -2.5    0.4    0.0    0.0 
Japan   856    860    855    855    880    880    880 
(% change)   5.0    0.4    -0.5    0.0    2.9    0.0    0.0 
                                    
Consumer price index                                   
Canada (2002 = 100)   141.6    151.2    156.8    160.7    164.2    167.5    170.9 
(% change)   3.4    6.8    3.7    2.5    2.2    2.0    2.0 
                                    
Canadian interest rates (%)                                   
3-month treasury bills   0.12    2.30    4.79    4.42    3.13    2.75    2.50 
10-year government bonds   1.36    2.77    3.19    3.10    3.00    2.85    2.85 
                                    
United States interest rates (%)                                   
3-month treasury bills   0.04    2.08    5.25    4.84    3.63    2.88    2.50 
10-year government bonds   1.44    2.95    3.72    3.51    3.25    3.13    3.00 
                                    
Exchange rate (US cents / Canadian $)   79.8    76.8    74.7    75.8    77.6    77.7    78.3 
                                    
British Columbia goods and services                                   
Export price deflator (% change)   15.8    12.6e   -2.4    1.8    1.2    1.2    1.2 

 

 

1Euro zone (20) is Austria, Belgium, Croatia, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia, and Spain.
eB.C. Ministry of Finance estimate.

 

 

54   | First Quarterly Report 2023/24  

 

 

APPENDIX | FISCAL PLAN UPDATE

 

Table A1 Material Assumptions – Revenue

 

 

Revenue Source and Assumptions

($ millions unless otherwise specified)

  Budget
Estimate
2023/24
   Updated
Forecast
2023/24
   Plan
2024/25
   Plan
2025/26
   2023/24 Sensitivities
Personal income tax *   15,953    15,431    16,149    16,940    
Current calendar year assumptions                       
Household income growth   6.1%   6.3%   4.2%   4.1%  +/- 1 percentage point change in 2023 B.C.
Employee compensation growth   6.3%   5.9%   5.1%   4.6%  household income growth equals +/- $140 to $160
Tax base growth   6.0%   6.2%   4.3%   4.0%  million
Average tax yield   6.36%   6.32%   6.34%   6.40%   
Current-year tax   15,528    14,924    15,621    16,415    
Prior year’s tax assessments   520    550    560    570    
Unapplied taxes   100    150    150    150    
B.C. Tax Reduction   (205)   (205)   (210)   (215)   
Non-refundable B.C. tax credits   (176)   (176)   (176)   (176)   
Policy neutral elasticity **   0.9    0.9    1.1    1.2   +/- 0.5 change in 2023 B.C. policy neutral elasticity
Fiscal year assumptions                      equals +/- $440 to $460 million
Prior-year adjustment   -    9              
                        
2022 Tax-year  2022 Assumptions              
Household income growth   7.1%   6.7%            +/- 1 percentage point change in 2022 B.C.
Tax base growth   6.2%   2.5%            household or taxable income growth equals
Average 2022 tax yield   6.38%   6.34%            +/- $170 to $190 million one-time effect (prior-year
2022 tax   14,713    14,113             adjustment) and could result in an additional +/-
2021 & prior year’s tax assessments   510    700             $140 to $160 million base change in 2023/24
Unapplied taxes   100    150              
B.C. Tax Reduction   (197)   (197)             
Non-refundable B.C. tax credits   (176)   (176)             
Policy neutral elasticity **   0.8    0.2              
                        
* Reflects information as at August 18, 2023
** Per cent growth in current year tax revenue (excluding policy measures) relative to per cent growth in household income (calendar year).
                        
Corporate income tax *   5,938    6,037    7,616    5,942    
Components of revenue (fiscal year)                       
Installments – subject to general rate   6,879    5,929    7,229    6,672    
Installments – subject to small business rate   350    295    360    332    
Non-refundable B.C. tax credits   (187)   (187)   (172)   (177)   
Advance installments   7,042    6,037    7,417    6,827    
Prior-year settlement payment   (1,104)   -    199    (885)   
Current calendar year assumptions                       
National tax base ($ billions)   547.0    488.6    532.5    565.6   +/- 1% change in the 2023 national tax base
B.C. installment share of national tax base   13.6%   13.4%   14.2%   12.9%  equals +/- $70 to $80 million
Effective percentage tax rates                       
(% general/small business)   12.0 / 2.0    12.0 / 2.0    12.0 / 2.0    12.0 / 2.0    
Share of the B.C. tax base subject to the small business rate   23.8%   23.4%   23.0%   23.0%  +/- 1 percentage point change in the 2023 small
B.C. tax base growth (post federal measures)   -7.1%   -5.0%   -0.5%   1.7%  business share equals -/+ $70 to $80 million
B.C. net operating surplus growth   -14.5%   -11.8%   -9.1%   1.5%   
                        
2022 Tax-year  2022 Assumptions              
B.C. tax base growth (post federal measures)   7.5%   1.9%             
Share of the B.C. tax base subject to small business rate   24.0%   23.6%            +/- 1% change in the 2022 B.C. tax base equals +/
B.C. net operating surplus growth   13.5%   20.8%            $60 to $80 million one-time effect (prior-year
Gross 2022 tax   7,424    7,068             adjustment) and could result in an additional
Prior-year settlement payment   (1,104)   -             installments payments of +/- $80 to $100 million in
Prior years losses/gains (included in above)   (200)   (100)            2023/24
Non-refundable B.C. tax credits   (210)   (210)             

 

* Reflects information as at August 18, 2023 

Cash received from the federal government is used as the basis for estimating revenue. Due to lags in the federal collection and installment systems, changes to the B.C. net operating surplus and tax base forecasts affect revenue in the succeeding year. The 2023/24 installments from the federal government reflects two-third of payments related to the 2023 tax year (paid during Apr-July 2023 and adjusted in Sept and Dec) and one-third of 2024 payments. Installments for the 2023 (2024) tax year are based on B.C.’s share of the national tax base for the 2022 (2023) tax year and a forecast of the 2023 (2024) national tax base. B.C.’s share of the 2021 national tax base was 13.8%, based on tax assessments as of December 31, 2022. Cash adjustments for any under/over payments from the federal government in respect of 2022 will be received/paid on March 31, 2024.

 

 

  First Quarterly Report 2023/24 |  55

 

 

Appendix – Fiscal Plan Update

 

 

Table A1 Material Assumptions – Revenue (continued)

 

 

Revenue Source and Assumptions

($ millions unless otherwise specified)

  Budget
Estimate
2023/24
   Updated
Forecast
2023/24
   Plan
2024/25
   Plan
2025/26
   2023/24 Sensitivities
Employer health tax   2,731    2,750    2,892    3,025    
Employee compensation growth   6.3%   5.9%   5.1%   4.6%  +/- 1 percentage point change in the 2023
                       employee compensation growth equals up to +/-
                       $25 million
Provincial sales tax   10,187    10,362    10,779    11,229    
Provincial sales tax base growth (fiscal year)   3.2%   5.0%   4.0%   4.1%  +/- 1 percentage point change in the 2023
Calendar Year nominal expenditure                      consumer expenditure growth equals up to +/- $20
Consumer expenditures on durable goods   -3.6%   2.0%   0.8%   2.2%  to $30 million
Consumer expenditures on goods and services   6.9%   6.4%   4.7%   4.4%   
Business investment   1.4%   4.0%   4.8%   5.5%  +/- 1 percentage point change in the 2023
Other   3.4%   2.6%   2.6%   5.7%  business investment growth equals up to +/- $10
                       to $20 million
Components of Provincial sales tax revenue                       
Consolidated Revenue Fund   10,178    10,353    10,770    11,220    
BC Transportation Financing Authority   9    9    9    9    
Fuel and carbon taxes   3,883    3,742    3,953    4,287    
Calendar Year                       
Real GDP   0.4%   1.2%   0.8%   2.4%   
Gasoline volumes   0.0%   -1.0%   -1.0%   -3.0%   
Diesel volumes   3.0%   -2.0%   2.0%   2.0%   
Natural gas volumes   1.0%   -1.0%   1.0%   0.0%   
Carbon tax rates (April 1)                       
Carbon dioxide equivalent emissions ($/tonne)   65    65    80    95    
Natural gas (cents/gigajoule)   322.79¢   322.79¢   397.28¢   471.77¢   
Gasoline (cents/litre)   14.31¢   14.31¢   17.61¢   20.91¢   
Light fuel oil (cents/litre)   16.85¢   16.85¢   20.74¢   24.62¢   
                        
Components of revenue *                       
Consolidated Revenue Fund   582    562    553    547    
BC Transit   18    18    18    17    
BC Transportation Financing Authority   472    462    461    454    
Fuel tax revenue   1,072    1,042    1,032    1,018    
Carbon tax revenue   2,811    2,700    2,921    3,269    
Property taxes   3,488    3,591    3,739    3,940    
Calendar Year                       
Consumer Price Index   3.9%   3.9%   2.5%   2.2%  +/- 1 percentage point change in 2023 new
Housing starts (units)   39,033    46,727    42,140    40,024   construction & inflation growth equals up to +/-
Home owner grants (fiscal year)   910    907    926    944   $30 million in residential property taxation revenue
Components of revenue                       
Residential (net of home owner grants)   1,434    1,510    1,596    1,674    
Speculation and vacancy     90    90    90    90    
Non-residential   1,566    1,572    1,630    1,717   +/- 1% change in 2023 total
Rural area   147    149    153    157   business property assessment
Police   37    39    40    41   value equals up to +/- $20 million
BC Assessment Authority   107    114    115    117   in non-residential property
BC Transit   107    117    115    144   taxation revenue
Other taxes   3,144    3,280    3,545    3,698    
Calendar Year                       
Population   2.4%   3.2%   2.9%   1.7%   
Residential sales value   -19.8%   -11.6%   16.9%   7.4%   
Real GDP   0.4%   1.2%   0.8%   2.4%   
Nominal GDP   2.8%   2.9%   3.3%   4.3%   
Components of revenue                      +/- 1% change to 2023 residential
Property transfer   1,799    1,950    2,205    2,348   sales value equals +/- $20 million
Additional Property Transfer Tax (included in above)   30    40    45    60   in property transfer revenue, depending on property values
Tobacco   565    520    520    520    
Insurance premium   780    810    820    830    

 

 

 

56   | First Quarterly Report 2023/24  

 

 

Appendix – Fiscal Plan Update

 

 

Table A1 Material Assumptions – Revenue (continued)

 

 

Revenue Source and Assumptions

($ millions unless otherwise specified)

  Budget
Estimate
2023/24
   Updated
Forecast
2023/24
   Plan
2024/25
   Plan
2025/26
   2023/24 Sensitivities
Energy, sales of Crown land tenures, metals, minerals and other *   3,367    1,962    2,237    2,193    
Natural gas price                      +/- $0.25 change in the natural gas
Plant inlet, $C/gigajoule   3.04    1.29    2.03    2.33   price equals +/- $130 to $150 million,
Sumas, $US/MMBtu   3.99    2.42    3.06    3.36   including impacts on production
Natural gas production volumes                      volumes and royalty program
Billions of cubic metres   72.2    70.2    73.2    73.4   credits, but excluding any
Petajoules   2,995    2,927    3,051    3,059   changes from natural gas liquids
Annual per cent change   8.9%   7.2%   4.2%   0.3%  revenue (e.g. butane, pentanes)
                       Sensitivities can also vary
Oil price ($US/bbl at Cushing, OK)   80.79    74.56    73.17    74.72   significantly at different price levels
                       +/- 1% change in natural gas
Auctioned land base (000 hectares)   11    11    20    20   volumes equals +/- $20 million
Average bid price/hectare ($)   275    200    200    300   in natural gas royalties
Cash sales of Crown land tenures   3    2    4    6   +/- 1 cent change in the exchange rate
Metallurgical coal price ($US/tonne, fob Australia)   252    248    222    210   equals +/-$1 million in natural gas royalties
Copper price ($US/lb)   3.56    3.82    3.96    4.09    
Annual electricity volumes set by treaty   3.9    3.9    3.8    3.8   +/- $10/bbl change in petroleum price
(million mega-watt hours)                      equals +/- $5 million in petroleum royalties
Mid-Columbia electricity price   107.84    92.90    90.06    92.10   +/- 12% change in natural gas liquids
($US/mega-watt hour)                      (equivalent to +/- $10/bbl oil price) prices
                       equals +/- $80 to $100 million in natural gas
Exchange rate (US¢/C$, calendar year)   74.7    74.7    75.8    77.6   liquids royalties
Components of revenue                       
Bonus bid auctions:                      +/- US$20 change in the average
Deferred revenue   61    60    29    28   metallurgical coal price
Current-year cash (one-tenth)   -    1    -    -   equals +/- $50 to $80 million
Fees and rentals   50    38    36    36   +/- 10% change in the average Mid-Columbia
Total bonus bids, fees and rentals   111    99    65    64   electricity price equals +/- $50 million
Natural gas royalties after deductions and allowances   2,016    837    1,179    1,182    
Petroleum royalties   37    34    31    29    
Columbia River Treaty electricity sales   522    478    452    456    
BC Energy Regulator fees and levies   66    73    75    74   Based on a recommendation from the Auditor
Coal, metals and other minerals revenue:                      General to be consistent with generally accepted
Coal tenures   8    8    8    8   accounting principles, bonus bid revenue
Net coal mineral tax   372    194    240    210   recognition reflects ten-year deferral of cash
Net metals and other minerals tax   47    51    54    58   receipts from the sale of Crown land tenures
Recoveries relating to revenue sharing payments to First Nations   170    170    115    94    
Miscellaneous mining revenue   18    18    18    18    
Total coal, metals and other minerals revenue   615    441    435    388    
                        
Gross royalties prior to deductions and allowances                       
Gross natural gas revenue   1,993    531    953    1,077    
Gross natural gas liquids royalties revenue   783    685    609    727    
                        
Royalty programs and infrastructure credits                       
Deep drilling   (400)   (200)   (141)   (99)   
Road, pipeline, Clean Growth Infrastructure Royalty and other infrastructure programs   (95)   (65)   (118)   (171)   
Total   (495)   (265)   (259)   (270)   
Implicit average natural gas royalty rate   22.2%   22.5%   14.8%   11.8%   

 

Royalty program (marginal, low productivity and ultra marginal drilling) adjustments reflect reduced royalty rates. Natural gas royalties incorporate royalty programs and Treasury Board approved infrastructure credits. 

* Reflects information as at August 4, 2023. 

 

 

  First Quarterly Report 2023/24 |  57

 

 

Appendix – Fiscal Plan Update

 

 

Table A1 Material Assumptions – Revenue (continued)

 

 

Revenue Source and Assumptions

($ millions unless otherwise specified)

  Budget
Estimate
2023/24
   Updated
Forecast
2023/24
   Plan
2024/25
   Plan
2025/26
   2023/24 Sensitivities
Forests *   846    886    847    952    
Prices (calendar year average)                      +/- US$50 change in SPF price equals
SPF 2x4 ($US/thousand board feet)   400    400    450    500   +/- $100 to $150 million
                        
Crown harvest volumes (million cubic metres)                       
Interior   30.0    30.0    29.9    29.7   +/- 10% change in Interior harvest volumes equals
Coast   8.0    8.0    8.1    8.3   +/- $50 to $60 million
Total   38.0    38.0    38.0    38.0   +/- 10% change in Coastal harvest volumes
B.C. Timber Sales (included in above)   6.3    6.3    6.4    7.4   equals +/- $15 to $25 million
                        
Stumpage rates ($Cdn/cubic metre)                       
Total stumpage rates   18.07    19.04    19.42    22.14   +/- 1 cent change in exchange rate
                       equals +/- $25 to $35 million in stumpage revenue
Components of revenue                       
Timber tenures (net of revenue sharing recoveries)   293    330    350    440    
Recoveries relating to revenue sharing payments to First Nations   138    138    138    105    
B.C. Timber Sales   274    274    268    316   The above sensitivities relate
Logging tax   100    100    50    50   to stumpage revenue only.
Other CRF revenue   30    33    30    30    
Recoveries   11    11    11    11    
                        
* Reflects information as at August 3, 2023             
                        
Other natural resource   551    536    509    549    
Components of revenue                       
Water rental and licences*   478    463    436    476   +/- 5% change in water power production
Recoveries   50    50    50    50   equals +/- $20 to $25 million
Angling and hunting permits and licences   10    10    10    10    
Recoveries   13    13    13    13    
* Water rentals for power purposes are indexed to Consumer Price Index.             
                    
Total natural resource recoveries relating to revenue sharing payments to First Nations   327    327    253    199   Revenue sharing from natural gas royalties, mineral tax and forest stumpage revenues.
Other revenue   10,520    10,667    10,829    11,052    
Components of revenue                       
Fees and licences                       
Motor vehicle licences and permits   618    614    621    630    
International student health fees   70    90    90    90    
Other Consolidated Revenue Fund   495    509    476    494    
Summary consolidation eliminations   (14)   (15)   (15)   (14)   
Ministry vote recoveries   270    270    105    105    
Taxpayer-supported Crown corporations   202    208    209    211    
Post-secondary education fees   2,770    2,829    2,956    3,061    
Other healthcare-related fees   496    510    510    516    
School Districts   275    248    266    281    
Investment earnings                       
Consolidated Revenue Fund   130    235    130    130    
Fiscal agency loans & sinking funds earnings   1,088    1,014    1,223    1,202    
Summary consolidation eliminations   (198)   (204)   (198)   (204)   
Taxpayer-supported Crown corporations   36    46    41    41    
SUCH sector agencies   293    318    326    342    
Sales of goods and services                       
SUCH sector agencies   986    988    1,039    1,092    
BC Infrastructure Benefits Inc.   246    279    311    346    
Other taxpayer-supported Crown corporations   254    99    107    112    
Miscellaneous   2,503    2,629    2,632    2,617    

 

 

58   | First Quarterly Report 2023/24  

 

 

Appendix – Fiscal Plan Update

 

 

Table A1 Material Assumptions – Revenue (continued)

 

 

Revenue Source and Assumptions

($ millions unless otherwise specified)

  Budget
Estimate
2023/24
   Updated
Forecast
2023/24
   Plan
2024/25
   Plan
2025/26
   2023/24 Sensitivities
Health and social transfers   8,970    9,252    9,385    9,770    
National Cash Transfers                       
Canada Health Transfer (CHT)   49,421    49,421    52,083    54,687    
Annual growth   9.3%   9.3%   5.4%   5.0%   
Canada Social Transfer (CST)   16,416    16,416    16,909    17,416    
B.C.’s share of national population (June 1)   13.62%   13.64%   13.60%   13.55%  +/- 0.1 percentage point change in B.C.’s
                       population share equals +/- $65 million
B.C. health and social transfers revenue                       
CHT   6,733    6,740    7,085    7,410    
CST   2,237    2,239    2,300    2,360    
CHT top up - strengthen public health care   -    273    -    -    
Other federal contributions   4,623    4,240    4,271    3,937    
Components of revenue                       
Disaster Financial Assistance Arrangements   1,268    848    1,102    773    
B.C.’s share of the federal cannabis excise tax   70    85    85    85    
Other Consolidated Revenue Fund   104    105    105    105    
Vote Recoveries:                       
Labour Market Development Agreement   296    296    296    296    
Labour Market and Skills Training Program   98    98    98    98    
Home Care   82    82    81    81    
Mental Health   82    82    82    82    
Child Care   822    822    822    822    
Child Safety, Family Support, Children in Care and with special needs   83    83    83    83    
Public Transit   297    297    92    135    
Local government services and transfers   188    188    181    120    
Other recoveries   154    154    155    155    
Taxpayer-supported Crown corporations   324    347    322    329    
Post-secondary institutions   634    623    636    641    
Other SUCH sector agencies   121    130    131    132    
                        
Service delivery agency direct revenue   8,981    9,118    9,345    9,614    
School districts   681    661    677    693    
Post-secondary institutions   4,962    4,992    5,196    5,385    
Health authorities and hospital societies   1,165    1,216    1,199    1,208    
BC Transportation Financing Authority   579    567    571    578    
Other service delivery agencies   1,594    1,682    1,702    1,750    
Commercial Crown corporation net income   3,489    3,492    3,985    4,020    
BC Hydro    712    712    712    712   Sensitivities impacts shown below are before regulatory account transfers
Reservoir water inflows   100%   85%   100%   100%  +/-1% in hydro generation equals +/- $60 million
Mean gas price   5.08    4.46    4.21    4.35   +/-1% equals +/- $0 million
(Sumas, $US/MMbtu – BC Hydro forecast based on NYMEX forward selling prices)                       
Electricity prices   83.41    89.56    86.47    85.99   +/-1% change in electricity/gas trade income
(Mid-C, $US/MWh)                      equals +/- $3.5 million
                        
ICBC   -    -    450    450    
Vehicle growth   1.9%   1.9%   1.9%   1.9%  +/-1% equals +/-$56 million
Current claims cost percentage change   11.8%   11.8%   9.9%   6.7%  +/-1% equals +/-$41 million
Unpaid claims balance ($ billions)   10.4    10.4    9.0    8.3   +/-1% equals +/-$104 to $125 million
Investment return   0.7%   0.7%   3.6%   3.7%  +/-1% return equals +/-$180 to $192 million
Loss ratio   84.3%   84.3%   85.0%   84.7%   

 

 

  First Quarterly Report 2023/24 |  59

 

 

Appendix – Fiscal Plan Update

 

 

Table A2 Natural Gas Price Forecasts – 2023/24 to 2025/26

 

 

Private sector forecasts (calendar year)              Adjusted to fiscal years and
$C/gigajoule at plant inlet
 
     2023   2024   2025   2023/24   2024/25   2025/26 
GLJ Henry Hub US$/MMBtu (Jul 1, 2023)   2.70    3.80    4.16    1.54    2.34    2.61 
Sproule Henry Hub US$/MMBtu (Jun 30, 2023)   2.84    4.00    4.25    1.79    2.55    2.72 
McDaniel Henry Hub US$/MMBtu (Jul 1, 2023)   2.58    3.32    3.90    1.29    1.81    2.29 
Deloitte Henry Hub US$/Mcf (Jun 30, 2023)   2.55    3.60    4.20    1.29    2.01    2.48 
GLJ Alberta AECO-C Spot CDN$/MMBtu (Jul 1, 2023)   2.64    3.60    4.35    1.59    2.42    2.94 
Sproule Alberta AECO-C Spot CDN$/MMBtu (Jun 30, 2023)   2.85    3.83    4.13    1.73    2.52    2.74 
McDaniel AECO-C Spot C$/MMBtu (Jul 1, 2023)   3.05    3.32    3.90    1.54    2.10    2.52 
Deloitte AECO-C Spot C$/Mcf (Jun 30, 2023)   2.60    3.30    3.95    1.28    1.99    2.43 
GLJ Sumas Spot US$/MMBtu (Jul 1, 2023)   3.80    3.70    4.06    1.64    2.94    3.22 
Sproule Sumas Spot CDN$/MMBtu (Jun 30, 2023)   5.85    5.79    6.12    2.70    3.81    4.07 
GLJ BC Spot Plant Gate CDN$/MMBtu (Jul 1, 2023)   2.11    3.18    3.98    1.47    2.41    2.96 
Sproule BC Station 2 CDN$/MMBtu (Jun 30, 2023)   2.53    3.73    4.02    1.73    2.55    2.77 
McDaniel BC Avg Plant Gate C$MMBtu (Jul 1, 2023)   2.35    2.60    3.17    1.30    1.80    2.21 
Deloitte BC Station 2 C$MMBtu (Jun 30, 2023)   3.10    3.75    3.75    1.42    2.19    2.62 
GLJ Midwest Chicago US$/MMBtu (Jul 1, 2023)   3.65    4.01    4.10    1.96    2.94    3.22 
Sproule Alliance Plant Gate CDN$/MMBtu (Jun 30, 2023)   3.59    5.01    5.33    2.61    3.64    3.88 
EIA Henry Hub US$/MMBtu (Jul 2023)   2.62    3.29         1.22           
TD Economics Henry Hub FuturesUS$/MMBtu (Jun 2023)   2.66    3.38         1.21           
Scotiabank Group Henry Hub US$/MMBtu (Jun 2023)   2.79    3.75         1.43           
BMO Henry Hub US$/MMBtu (Jun 2023)   2.75    3.75         1.40           
InSite Petroleum Consultants Ltd BC Spot C$/Mcf (Jun 2023)   2.67    3.60    4.15    1.64    2.36    2.76 
NYMEX Forward Market converted to Plant Inlet CDN$/GJ (Jul 11, 2023)                  1.49    2.04    2.37 
                               
Average all minus high/low                  1.57    2.45    2.81 
                               
Average one forecast per consultant minus high/low                  1.41    2.32    2.72 
                               
Natural gas royalty price forecast                  1.29    2.03    2.33 

 

GLJ: Gilbert Laustsen Jung Petroleum Consultants Ltd         US EIA: US Energy Information Administration         AECO: Alberta Energy Company

Deloitte/AJM: Deloitte L.L.P acquired Ashton Jenkins Mann Petroleum Consultants         McDaniel: McDaniel & Associates Consultants Ltd

  

 

60   | First Quarterly Report 2023/24  

 

 

Appendix – Fiscal Plan Update

 

 

 

 

 

  First Quarterly Report 2023/24 |  61

 

 

Appendix – Fiscal Plan Update

 

 

Table A3 Material Assumptions – Expense

 

 

Ministry Programs and Assumptions
($ millions unless otherwise specified)
  Budget
Estimate
2023/24
   Updated
Forecast
2023/24
   Plan
2024/25
   Plan
2025/26
   2023/24 Sensitivities
Attorney General   773    776    781    778    
New cases filed/processed   242,000    235,000    242,000    242,000   The number of criminal cases proceeded on by the
(# for all courts)                      provincial and federal Crown (including appeals to
                       higher courts in BC), the number of civil and family
                       litigation cases, the number of violation tickets
                       disputed, and the number of municipal bylaw tickets
                       disputed which would go to court for resolution.
                        
Crown Proceeding Act (CPA)   25    28    25    25   Number of litigation cases resolved by court decisions
                       or negotiated settlement.
                        
Children and Family Development   1,912    1,912    1,930    1,926    
Average children-in-care   4,852    4,822    4,727    4,663   The average number of children-in-care is decreasing
caseload (#)                      as a result of ministry efforts to keep children in family
Average annual residential   105,337    135,718    151,984    169,492   settings where safe and feasible. The average cost
cost per child in care ($)                      per child in care is projected to increase based on the
                       higher cost of contracted residential services and an
                       increasing acuity of need for children in care. A 1%
                       increase in the cost per case or a 1% increase in the
                       average caseload will affect expenditures by $3.3
                       million (excluding Indigenous CFS Agencies).
                        
Education and Child Care   8,874    8,874    9,133    9,172    
Public School Enrolment (# of FTEs)   591,272    591,272    600,178    607,449   Updated forecast enrolment figures are based on
School age (K–12)   568,521    568,521    577,311    584,487   submissions from school districts of their actual
Continuing Education   905    905    905    905   enrolment as at September 30, 2022 for the 2022/23
Distributed Learning (online)   13,229    13,229    13,346    13,441   school year, including February and May enrolment
Summer   6,288    6,288    6,288    6,288   counts. Projections are based on the Ministry of
Adults   2,328    2,328    2,328    2,328   Education and Child Care’s enrolment forecasting model.
                        
Emergency Management and Climate Readiness   101    101    111    120    
Emergency Program Act (EPA)   36    36    250    91   Emergency disaster relief is unpredictable by
                       nature. There are a number of factors that could impact
                       the timing of delivering recovery projects resulting
                       from the Major Events.
                        
Forests   925    1,687    905    913    
BC Timber Sales   237    237    235    243   Targets can be impacted by changes to actual
                       inventory costs incurred. There is a lag of
                       approximately 1.5 years between when inventory costs
                       are incurred and when they are expensed. Volume
                       harvested can also impact targets. For example, if
                       volume harvested is less than projected in any year,
                       then capitalized expenses will also be reduced in that year.
Fire Management   204    966    205    205   Costs are driven by length of season and severity of
                       weather conditions, severity of fires, proportion of
                       interface fires, size of fires and damages caused.
                       Costs have ranged from a low of $47 million in 2006 to
                       a high of $809 million in 2021/22 (Fire season 2021).

 

 

 

62   | First Quarterly Report 2023/24  

 

 

Appendix – Fiscal Plan Update

 

 

Table A3 Material Assumptions – Expense (continued)

 

 

Ministry Programs and Assumptions

($ millions unless otherwise specified)

  Budget
Estimate
2023/24
   Updated
Forecast
2023/24
   Plan
2024/25
   Plan
2025/26
   2023/24 Sensitivities
Health   28,674    28,674    29,887    30,669    
Pharmacare   1,578    1,578    1,610    1,597   A 1% change in PharmaCare utilization or prices
                       affects costs by approximately $12 million.
                        
Medical Services Plan (MSP)   7,039    7,039    7,340    7,281   A 1% increase in volume of services provided by fee-
                       for-service physicians affects costs by approximately
                       $35 million.
                        
Regional Services   19,671    19,671    20,534    21,403   A 1% increase in volume of services provided by
                       Health Authorities is estimated to be $186 million.
                        
Post-Secondary Education and Future Skills   2,770    2,770    2,815    2,837    
Student spaces in public institutions   206,085    206,085    205,886    206,048   Student enrolments may fluctuate due to a number of
                       factors including economic changes and labour market
                       needs. Current year forecast to be updated at Q3 to
                       align with PSI reporting, consistent with past practice.
                        
Public Safety and Solicitor General   1,028    1,028    1,034    1,033    
Policing, Victim Services and Corrections   909    909    913    913   Policing, Victim Services and Corrections costs are
                       sensitive to the volume and severity of criminal
                       activity, the number of inmate beds occupied and the
                       number of offenders under community supervision.
                        
Social Development and Poverty Reduction   4,745    4,745    4,861    4,927    
Temporary Assistance   47,500    55,822    45,200    44,400   The expected to work caseload is sensitive to
annual average caseload (#)                      fluctuations in economic and employment trends.
                       Costs are driven by changes to cost per case and
                       caseload. Cost per case fluctuations result from
                       changes in the needed supports required by clients, as
                       well as caseload composition.
                        
Disability Assistance   121,600    122,359    125,000    126,700   The caseload for persons with disabilities is sensitive
annual average caseload (#)                      to the aging of the population and longer life
                       expectancy for individuals with disabilities. Cost per
                       case fluctuations are driven primarily by earnings
                       exemptions which is dependent on the level of income
                       earned by clients.
                        
Adult Community Living:                       
Developmental Disabilities Programs                       
Average caseload (#)   24,330    24,190    25,070    25,520   The adult community living caseload is sensitive to an
Average cost per client ($)   53,600    58,700    57,900    58,400   aging population and to the level of service required.
Personal Supports Initiative (PSI)                      Cost per case fluctuations are driven by the proportion
Average caseload (#)   3,240    3,210    3,510    3,650   of clients receiving certain types of services at
Average cost per client ($)   15,200    16,600    15,800    15,800   differing costs. For example, residential care services
                       are significantly more costly than day programs.

 

 

  First Quarterly Report 2023/24 |  63

 

 

Appendix – Fiscal Plan Update

 

 

Table A3 Material Assumptions – Expense (continued)

 

 

Ministry Programs and Assumptions

($ millions unless otherwise specified)

  Budget
Estimate
2023/24
   Updated
Forecast
2023/24
   Plan
2024/25
   Plan
2025/26
   2023/24 Sensitivities
Tax Transfers   3,159    3,078    3,424    3,826    
Individuals   1,815.0    1,805.0    2,133.0    2,449.0    
Climate Action Tax Credit   757.0    747.0    1,051.0    1,359.0   These tax transfers are now expensed as
BC Family Benefit   463.0    463.0    482.8    485.0   required under generally accepted accounting
Renter’s Tax Credit   309.0    309.0    313.0    319.0   principles.
Sales Tax   50.0    50.0    50.0    50.0    
Small Business Venture Capital   40.0    40.0    40.0    40.0    
BC Senior’s Home Renovation   3.0    3.0    3.0    3.0    
Other tax transfers to individuals   193.0    193.0    193.2    193.0    
                       Changes in 2022 tax transfers will result in one-time
                       effect (prior-year adjustment) and could result in an
Corporations   1,344.0    1,273.0    1,291.0    1,377.0   additional base change in 2023/24. Production
Film and Television   152.5    136.3    138.8    152.5   services tax credit is the most volatile of all tax
Production Services   890.3    835.5    845.8    912.8   transfers and is influenced by several factors including
Scientific Research & Experimental Development   96.2    96.3    101.3    106.3   delay in filing returns and assessment of claims,
Interactive Digital Media   110.0    110.0    110.0    110.0   length of projects and changes in the exchange rates.
Mining Exploration   30.0    30.0    30.0    30.0    
Other tax transfers to corporations   65.0    64.9    65.1    65.4    
                        
Prior-year adjustment (included above)*                       
Individuals        -              
Corporations        (8.3)             
                        
2022 Tax-year  2022 Assumptions              
Tax Transfers   2,206.0    2,196.0              
Individuals   1,011.0    1,001.0              
Corporations   1,195.0    1,195.0              
Film and Television   140.0    140.0              
Production Services   780.0    780.0              
Scientific Research & Experimental Development   90.0    90.0              
Interactive Digital Media   110.0    110.0              
Other tax transfers to corporations   75.0    75.0              
                        
*2023/24 tax transfer forecast incorporates adjustments relating to prior years.             
              
Management of Public Funds and Debt   1,309    1,400    1,679    2,008    
Interest rates for new provincial borrowing:                      Full year impact on MoPD on interest costs of a 1%
Short-term   4.04%   4.97%   4.11%   2.99%  change in interest rates equals $7 million;
Long-term   4.10%   4.18%   4.12%   4.12%  $100 million increase in debt level equals $4.4 million.
CDN/US exchange rate (cents)   132.6    133.4    130.8    128.8    
                        
Service delivery agency net spending   9,176    9,322    9,961    10,365    
School districts   557    651    662    672    
Post-secondary institutions   4,795    4,809    5,009    5,176    
Health authorities and hospital societies   1,103    1,245    1,134    1,144   Agency expenses, net of Provincial funding. These are
BC Transportation Financing Authority   1,887    1,894    2,311    2,402   mainly funded through revenue from other sources.
BC Infrastructure Benefits Inc.   246    279    311    346    
Other service delivery agencies   588    444    534    625    

 

 

64   | First Quarterly Report 2023/24  

 

 

Appendix – Fiscal Plan Update

 

 

Table A4 Operating Statement – 2016/17 to 2025/26 1

 

 

($ millions)  Actual 2016/17   Actual 2017/18   Actual 2018/19   Actual 2019/20   Actual 2020/21   Actual 2021/22   Actual 2022/23   Updated Forecast 2023/24   Plan 2024/25   Plan 2025/26   Average annual change 
                                            (per cent) 
Revenue  51,449   52,020    57,128   58,660   62,156   72,392   81,536   76,228   80,736   81,534   5.2 
Expense  (48,721)  (51,744)   (55,634)  (59,022)  (67,663)  (71,127)  (80,832)  (82,202)  (83,383)  (85,171)  6.4 
Surplus (deficit) before forecast allowance  2,728   276    1,494   (362)  (5,507)  1,265   704   (5,974)  (2,647)  (3,637)    
Forecast allowance  -   -    -   -   -   -   -   (700)  (500)  (500)    
Surplus (deficit)  2,728   276    1,494   (362)  (5,507)  1,265   704   (6,674)  (3,147)  (4,137)    
                                              
Per cent of nominal GDP: 2                                             
Surplus (deficit)  1.0   0.1    0.5   -0.1   -1.8   0.4   0.2   -1.7   -0.8   -1.0     
Per cent of revenue:                                             
Surplus (deficit)  5.3   0.5    2.6   -0.6   -8.9   1.7   0.9   -8.8   -3.9   -5.1     
Per capita ($): 3                                             
Surplus (deficit)  561   56    298   (71)  (1,068)  243   132   (1,216)  (557)  (720)    

 

 
1Figures have been restated to reflect government current accounting policies.

2Surplus (deficit) as a per cent of nominal GDP is calculated using nominal GDP for the calendar year ending in the fiscal year (e.g. 2023/24 amounts divided by nominal GDP for the 2023 calendar year).

3Per capita revenue and expense is calculated using July 1 population (e.g. 2023/24 amounts divided by population on July 1, 2023).

 

 

  First Quarterly Report 2023/24 |   65

 

 

Appendix – Fiscal Plan Update

 

 

Table A5 Revenue by Source – 2016/17 to 2025/26

 

 

($ millions)  Actual 2016/17   Actual 2017/18   Actual 2018/19   Actual 2019/20   Actual 2020/21   Actual 2021/22   Actual 2022/23   Updated Forecast 2023/24   Plan 2024/25   Plan 2025/26   Average annual change 
                                           (per cent) 
Taxation revenue:                                             
Personal income  9,704   8,923     11,364   10,657   11,118   13,704   17,268   15,431   16,149   16,940   6.4 
Corporate income  3,003   4,165     5,180   5,011   4,805   5,053   9,156   6,037   7,616   5,942   7.9 
Employer health  -   -     464   1,897   2,156   2,443   2,720   2,750   2,892   3,025   n/a 
Sales  6,606   7,131     7,369   7,374   7,694   8,731   9,818   10,362   10,779   11,229   6.1 
Fuel  969   1,010     1,015   1,008   936   1,022   1,021   1,042   1,032   1,018   0.5 
Carbon  1,220   1,255     1,465   1,682   1,683   2,011   2,161   2,700   2,921   3,269   11.6 
Tobacco  737   727     781   729   711   708   531   520   520   520   -3.8 
Property  2,279   2,367     2,617   2,608   2,313   3,012   3,253   3,591   3,739   3,940   6.3 
Property transfer  2,026   2,141     1,826   1,609   2,098   3,327   2,293   1,950   2,205   2,348   1.7 
Insurance premium  549   602     633   691   652   706   804   810   820   830   4.7 
   27,093   28,321     32,714   33,266   34,166   40,717   49,025   45,193   48,673   49,061   6.8 
Natural resource revenue:                                              
Natural gas royalties  152   161     199   118   196   920   2,255   837   1,179   1,182   25.6 
Bonus bids, rents on drilling rights and leases  633   276     279   225   162   133   122   99   65   64   -22.5 
Columbia River Treaty  111   111     202   119   117   231   437   478   452   456   17.0 
Other energy and minerals  403   619     557   386   191   795   979   548   541   491   2.2 
Forests  913   1,065     1,406   988   1,304   1,893   1,887   886   847   952   0.5 
Other resources  499   463     465   432   433   499   518   536   509   549   1.1 
   2,711   2,695     3,108   2,268   2,403   4,471   6,198   3,384   3,593   3,694   3.5 
Other revenue:                                              
Medical Services Plan premiums  2,558   2,266     1,360   1,063   (4)  1   (1)  -   -   -   n/a 
Post-secondary education fees  1,828   2,034     2,275   2,451   2,418   2,536   2,651   2,829   2,956   3,061   5.9 
Other health-care related fees  404   429     441   475   372   417   519   510   510   516   2.8 
Motor vehicle licences and permits  529   557     568   579   571   610   613   614   621   630   2.0 
Other fees and licences  894   963     949   1,004   972   1,020   1,146   1,310   1,131   1,167   3.0 
Investment earnings  1,232   1,101     1,243   1,263   1,264   1,306   1,316   1,409   1,522   1,511   2.3 
Sales of goods and services  1,131   1,133     1,164   1,162   741   1,059   1,396   1,366   1,457   1,550   3.6 
Miscellaneous  2,377   2,410     2,249   2,676   2,395   2,851   3,049   2,629   2,632   2,617   1.1 
   10,953   10,893     10,249   10,673   8,729   9,800   10,689   10,667   10,829   11,052   0.1 
Contributions from the federal government:                                              
Canada Health Transfer  4,744   4,994     5,182   5,523   5,701   6,431   6,432   7,013   7,085   7,410   5.1 
Canada Social Transfer  1,751   1,854     1,908   1,971   2,042   2,110   2,174   2,239   2,300   2,360   3.4 
Other cost shared agreements  1,672   2,207     1,962   2,041   5,151   3,439   3,920   4,240   4,271   3,937   10.0 
   8,167   9,055     9,052   9,535   12,894   11,980   12,526   13,492   13,656   13,707   5.9 
Commercial Crown corporation net income:                                              
BC Hydro 1  684   683     (428)  705   688   668   360   712   712   712   0.4 
Liquor Distribution Branch  1,083   1,119     1,104   1,107   1,161   1,189   1,199   1,150   1,170   1,194   1.1 
BC Lottery Corporation 2  1,329   1,391     1,405   1,336   420   1,211   1,584   1,456   1,478   1,484   1.2 
ICBC  (612)  (1,327)    (1,153)  (376)  1,528   2,216   (197)  -   450   450   -196.6 
Other  41   140     127   146   167   140   152   174   175   180   17.9 
Accounting adjustment 1  -   (950)    950   -   -   -   -   -   -   -   n/a 
   2,525   1,056     2,005   2,918   3,964   5,424   3,098   3,492   3,985   4,020   5.3 
Total revenue  51,449   52,020     57,128   58,660   62,156   72,392   81,536   76,228   80,736   81,534   5.2 

 

 

1BC Hydro’s loss for 2018/19 includes a write-off of a regulatory account. At the summary level, the Province recognized a $950 million adjustment in fiscal 2017/18 with respect to BC Hydro’s deferred regulatory accounts.

2Net of federal government payments and beginning in 2021/22, is also net of payments to the BC First Nations Gaming Revenue Sharing Limited Partnership in accordance with section 14.3 of the Gaming Control Act (B.C.).

 

 

66  | First Quarterly Report 2023/24  

 

 

Appendix – Fiscal Plan Update

 

 

Table A6 Revenue by Source Supplementary Information – 2016/17 to 2025/26 1

 

 

   Actual 2016/17   Actual 2017/18   Actual 2018/19   Actual 2019/20   Actual 2020/21   Actual 2021/22   Actual 2022/23   Updated Forecast 2023/24   Plan 2024/25   Plan 2025/26   Average annual change 
                                             (per cent) 
Per cent of nominal GDP: 2                                              
Taxation and Medical Services Plan premiums  11.2   10.8     11.5   11.1   11.1   11.6   12.5   11.2   11.7   11.3   0.1 
Taxation  10.3   10.0     11.0   10.8   11.1   11.6   12.5   11.2   11.7   11.3   1.1 
Medical Services Plan premiums  1.0   0.8     0.5   0.3   -   -   -   -   -   -   n/a 
Natural resources  1.0   1.0     1.0   0.7   0.8   1.3   1.6   0.8   0.9   0.9   -2.1 
Other  4.2   3.9     3.4   3.5   2.8   2.8   2.7   2.6   2.6   2.5   -5.3 
Other excluding                                              
Medical Services Plan premiums  3.2   3.1     3.0   3.1   2.8   2.8   2.7   2.6   2.6   2.5   -2.4 
Contributions from the federal government  3.1   3.2     3.0   3.1   4.2   3.4   3.2   3.3   3.3   3.2   0.2 
Commercial Crown corporation net income  1.0   0.4     0.7   0.9   1.3   1.5   0.8   0.9   1.0   0.9   -0.4 
Total revenue  19.5   18.4     19.2   19.0   20.3   20.6   20.8   18.9   19.4   18.8   -0.4 
Growth rates (per cent):                                              
Taxation  11.4   4.5     15.5   1.7   2.7   19.2   20.4   -7.8   7.7   0.8   n/a 
Natural resources  5.4   -0.6     15.3   -27.0   6.0   86.1   38.6   -45.4   6.2   2.8   n/a 
Other  5.9   -0.5     -5.9   4.1   -18.2   12.3   9.1   -0.2   1.5   2.1   n/a 
Other excluding                                              
Medical Services Plan premiums  6.1   2.8     3.0   8.1   -9.1   12.2   9.1   -0.2   1.5   2.1   n/a 
Contributions from the federal government  6.8   10.9     0.0   5.3   35.2   -7.1   4.6   7.7   1.2   0.4   n/a 
Commercial Crown corporation net income  -6.8   -58.2     89.9   45.5   35.8   36.8   -42.9   12.7   14.1   0.9   n/a 
Total revenue  8.1   1.1     9.8   2.7   6.0   16.5   12.6   -6.5   5.9   1.0   n/a 
Per capita ($): 3                                              
Taxation  5,576   5,745     6,529   6,529   6,627   7,827   9,216   8,231   8,618   8,540   4.9 
Natural resources  558   547     620   445   466   859   1,165   616   636   643   1.6 
Other  2,254   2,210     2,046   2,095   1,693   1,884   2,009   1,943   1,917   1,924   -1.7 
Other excluding                                              
Medical Services Plan premiums  1,728   1,750     1,774   1,886   1,694   1,884   2,010   1,943   1,917   1,924   1.2 
Contributions from the federal government  1,681   1,837     1,807   1,872   2,501   2,303   2,355   2,457   2,418   2,386   4.0 
Commercial Crown corporation net income  520   214     400   573   769   1,043   582   636   706   700   3.4 
Total revenue  10,588   10,553     11,402   11,514   12,056   13,915   15,328   13,884   14,295   14,192   3.3 
                                               
Real Per Capita Revenue (2022 $) 4  11,773   12,284     12,920   12,749   13,249   14,876   15,328   13,361   13,420   13,040   1.1 
Growth rate (per cent)  4.3   4.3     5.2   -1.3   3.9   12.3   3.0   -12.8   0.4   -2.8   1.7 

 

 

1Numbers may not add due to rounding.

2Revenue as a per cent of GDP is calculated using nominal GDP for the calendar year ending in the fiscal year (e.g. 2023/24 revenue divided by nominal GDP for the 2023 calendar year).

3Per capita revenue is calculated using July 1 population (e.g. 2023/24 revenue divided by population on July 1, 2023).

4Revenue is converted to real (inflation-adjusted) terms using the consumer price index (CPI) for the corresponding calendar year (e.g. 2023 CPI for 2023/24 revenue).

 

 

  First Quarterly Report 2023/24 |   67

 

 

Appendix – Fiscal Plan Update

 

 

Table A7 Expense by Function – 2016/17 to 2025/26 1,2

 

 

($ millions)  Actual 2016/17   Actual 2017/18   Actual 2018/19   Actual 2019/20   Actual 2020/21   Actual 2021/22   Actual 2022/23   Updated Forecast 2023/24   Plan 2024/25   Plan 2025/26   Average annual change 
                                             (per cent) 
Function:                                            
Health:                                            
Medical Services Plan  4,573   4,623    4,861   5,013   5,145   5,776   6,006   7,081   7,382   7,323   5.4 
Pharmacare  1,284   1,400    1,494   1,517   1,501   1,579   1,711   1,728   1,760   1,747   3.5 
Regional services  13,086   14,101    15,004   16,054   18,290   19,574   21,715   21,040   21,768   22,668   6.3 
Other healthcare expenses  753   810    800   872   677   662   890   1,107   1,136   1,121   4.5 
Total health  19,696   20,934    22,159   23,456   25,613   27,591   30,322   30,956   32,046   32,859   5.9 
Education:                                             
Elementary and secondary  6,423   6,919    7,254   7,584   7,444   8,085   8,585   9,037   9,348   9,247   4.1 
Post-secondary  5,677   6,002    6,398   6,846   6,872   7,357   7,517   8,361   8,627   8,999   5.3 
Other education expenses  374   176    442   310   632   359   889   464   459   462   2.4 
Total education  12,474   13,097    14,094   14,740   14,948   15,801   16,991   17,862   18,435   18,709   4.6 
Social services:                                             
Social assistance  1,692   1,988    2,202   2,342   3,141   2,910   3,157   3,160   3,234   3,261   7.6 
Child welfare  1,358   1,507    1,652   1,940   2,226   2,254   3,168   3,638   3,709   3,707   11.8 
Low income tax credit transfers  244   239    414   435   1,131   754   1,746   807   1,082   1,373   21.2 
Community living and other services  949   1,003    1,075   1,170   1,291   1,350   1,581   1,543   1,601   1,661   6.4 
Total social services  4,243   4,737    5,343   5,887   7,789   7,268   9,652   9,148   9,626   10,002   10.0 
Protection of persons and property  1,655   1,930    2,004   2,126   2,258   2,937   3,483   2,319   2,352   2,364   4.0 
Transportation  1,784   1,931    2,021   2,126   3,362   4,453   3,319   2,634   2,551   2,592   4.2 
Natural resources & economic development  2,465   3,374    3,825   3,778   4,191   5,213   6,284   5,161   4,187   4,244   6.2 
Other  2,281   1,574    1,831   2,525   2,861   3,082   5,736   3,437   3,530   3,394   4.5 
Contingencies - general programs and CleanBC  -   -    -   -   -   -   -   2,300   2,200   2,000   n/a 
Contingencies - Shared Recovery Mandate  -   -    -   -   -   -   -   2,200   2,600   2,700   n/a 
Pandemic Recovery Contingencies  -   -    -   -   -   -   -   1,000   -   -   n/a 
General government  1,536   1,544    1,673   1,657   3,919   2,040   2,326   1,931   1,923   1,936   2.6 
Debt servicing  2,587   2,623    2,684   2,727   2,722   2,742   2,719   3,254   3,933   4,371   6.0 
Total expense  48,721   51,744    55,634   59,022   67,663   71,127   80,832   82,202   83,383   85,171     
Per cent of operating expense:                                             
Health  40.4   40.5    39.8   39.7   37.9   38.8   37.5   37.7   38.4   38.6   -0.5 
Education  25.6   25.3    25.3   25.0   22.1   22.2   21.0   21.7   22.1   22.0   -1.7 
Social services  8.7   9.2    9.6   10.0   11.5   10.2   11.9   11.1   11.5   11.7   3.4 
Protection of persons and property  3.4   3.7    3.6   3.6   3.3   4.1   4.3   2.8   2.8   2.8   -2.2 
Transportation  3.7   3.7    3.6   3.6   5.0   6.3   4.1   3.2   3.1   3.0   -2.0 
Natural resources & economic development  5.1   6.5    6.9   6.4   6.2   7.3   7.8   6.3   5.0   5.0   -0.2 
Other  4.7   3.0    3.3   4.3   4.2   4.3   7.1   4.2   4.2   4.0   -1.8 
Contingencies - general programs and CleanBC  -   -    -   -   -   -   -   2.8   2.6   2.3   n/a 
Contingencies - Shared Recovery Mandate  -   -    -   -   -   -   -   2.7   3.1   3.2   n/a 
Pandemic Recovery Contingencies  -   -    -   -   -   -   -   1.2   -   -   n/a 
General government  3.2   3.0    3.0   2.8   5.8   2.9   2.9   2.3   2.3   2.3   -3.6 
Debt servicing  5.3   5.1    4.8   4.6   4.0   3.9   3.4   4.0   4.7   5.1   -0.4 
Operating expense  100.0   100.0    100.0   100.0   100.0   100.0   100.0   100.0   100.0   100.0     

 

 

1Figures reflect government accounting policies used in the 2022/23 Public Accounts audited financial statements.

2Numbers may not add due to rounding.

 

 
68  | First Quarterly Report 2023/24  

 

 

Appendix – Fiscal Plan Update

 

 

Table A8 Expense by Function Supplementary Information – 2016/17 to 2025/26 1

 

 

   Actual
2016/17
   Actual
2017/18
   Actual
2018/19
   Actual
2019/20
   Actual
2020/21
   Actual
2021/22
   Actual
2022/23
   Updated
Forecast
2023/24
   Plan
2024/25
   Plan
2025/26
   Average
annual
change
 
                                           (per cent) 
Per cent of nominal GDP: 2                                            
Health  7.5   7.4   7.5   7.6   8.3   7.9   7.7   7.7   7.7   7.6    0.2 
Education  4.7   4.6   4.7   4.8   4.9   4.5   4.3   4.4   4.4   4.3    -1.0 
Social services  1.6   1.7   1.8   1.9   2.5   2.1   2.5   2.3   2.3   2.3    4.1 
Protection of persons and property  0.6   0.7   0.7   0.7   0.7   0.8   0.9   0.6   0.6   0.5    -1.5 
Transportation  0.7   0.7   0.7   0.7   1.1   1.3   0.8   0.7   0.6   0.6    -1.4 
Natural resources & economic development  0.9   1.2   1.3   1.2   1.4   1.5   1.6   1.3   1.0   1.0    0.5 
Other  0.9   0.6   0.6   0.8   0.9   0.9   1.5   0.9   0.8   0.8    -1.1 
Contingencies - general programs and CleanBC  -   -   -   -   -   -   -   0.6   0.5   0.5    n/a 
Contingencies - Shared Recovery Mandate   -   -   -   -   -   -   -   0.6   0.7   0.8    n/a 
Pandemic Recovery Contingencies  -   -   -   -   -   -   -   0.3   -   -    n/a 
General government  0.6   0.5   0.6   0.5   1.3   0.6   0.6   0.5   0.5   0.4    -2.9 
Debt servicing  1.0   0.9   0.9   0.9   0.9   0.8   0.7   0.8   0.9   1.0    0.3 
Operating expense  18.5   18.3   18.7   19.1   22.0   20.3   20.6   20.5   20.1   19.8    0.8 
Growth rates (per cent):                                             
Health  2.6   6.3   5.9   5.9   9.2   7.7   9.9   2.1   3.5   2.5    n/a 
Education  2.1   5.0   7.6   4.6   1.4   5.7   7.5   5.1   3.2   1.5    n/a 
Social services  3.3   11.6   12.8   10.2   32.3   -6.7   32.8   -5.2   5.2   3.9    n/a 
Protection of persons and property  5.3   16.6   3.8   6.1   6.2   30.1   18.6   -33.4   1.4   0.5    n/a 
Transportation  6.8   8.2   4.7   5.2   58.1   32.5   -25.5   -20.6   -3.2   1.6    n/a 
Natural resources & economic development  -0.5   36.9   13.4   -1.2   10.9   24.4   20.5   -17.9   -18.9   1.4    n/a 
Other  80.5   -31.0   16.3   37.9   13.3   7.7   86.1   -40.1   2.7   -3.9    n/a 
Contingencies - general programs and CleanBC  -   -   -   -   -   -   -   -   -4.3   -9.1    n/a 
Contingencies - Shared Recovery Mandate   -   -   -   -   -   -   -   -   18.2   3.8    n/a 
Pandemic Recovery Contingencies  -   -   -   -   -   -   -   -   -100.0   -    n/a 
General government  2.3   0.5   8.4   -1.0   136.5   -47.9   14.0   -17.0   -0.4   0.7    n/a 
Debt servicing  -8.5   1.4   2.3   1.6   -0.2   0.7   -0.8   19.7   20.9   11.1    n/a 
Operating expense  4.0   6.2   7.5   6.1   14.6   5.1   13.6   1.7   1.4   2.1    n/a 
Per capita ($): 3                                             
Health  4,053   4,247   4,423   4,604   4,968   5,304   5,700   5,638   5,674   5,720    3.9 
Education  2,567   2,657   2,813   2,893   2,899   3,037   3,194   3,253   3,264   3,257    2.7 
Social services  873   961   1,066   1,155   1,511   1,397   1,815   1,666   1,704   1,741    8.0 
Protection of persons and property  341   392   400   417   438   565   655   422   416   411    2.1 
Transportation  367   392   403   417   652   856   624   480   452   451    2.3 
Natural resources & economic development  507   684   763   742   813   1,002   1,181   940   741   739    4.3 
Other  469   319   365   496   555   592   1,078   626   625   591    2.6 
Contingencies - general programs and CleanBC  -   -   -   -   -   -   -   419   390   348    n/a 
Contingencies - Shared Recovery Mandate  -   -   -   -   -   -   -   401   460   470    n/a 
Pandemic Recovery Contingencies  -   -   -   -   -   -   -   182   -   -    n/a 
General government  316   313   334   325   760   392   437   352   340   337    0.7 
Debt servicing  532   532   536   535   528   527   511   593   696   761    4.1 
Operating expense  10,025   10,497   11,103   11,584   13,124   13,672   15,195   14,972   14,762   14,826    4.4 
Real Per Capita Operating Expense (2022 $) 4  11,919   12,219   12,582   12,828   14,424   14,616   15,195   14,408   13,860   13,621    1.5 
Growth rate (per cent)  0.4   2.5   3.0   2.0   12.4   1.3   4.0   -5.2   -3.8   -1.7    1.5 

 

 

1Numbers may not add due to rounding.

2Expense as a per cent of GDP is calculated using nominal GDP for the calendar year ending in the fiscal year (e.g. 2023/24 expense divided by nominal GDP for the 2023 calendar year).

3Per capita expense is calculated using July 1 population (e.g. 2023/24 expense divided by population on July 1, 2023).

4Expense is converted to real (inflation-adjusted) terms using the consumer price index (CPI) for the corresponding calendar year (e.g. 2023 CPI for 2023/24 expense).

 

 

  First Quarterly Report 2023/24 |  69

 

 

Appendix – Fiscal Plan Update

 

 

Table A9 Full-Time Equivalents (FTEs) – 2016/17 to 2025/2026 1

 

 

   Actual
2016/17
   Actual
2017/18
   Actual
2018/19
   Actual
2019/20
   Actual
2020/21
   Actual
2021/22
   Actual
2022/23
   Updated
Forecast
2023/24
   Plan
2024/25
   Plan
2025/26
   Average
annual
change
 
                                           (per cent) 
Taxpayer-supported programs and agencies:                                             
Ministries and special offices (CRF)  27,940   29,291   30,891   31,774   32,672   33,400   33,696   35,500   36,000   36,000    2.9 
Service delivery agencies 2  4,850   5,076   5,258   5,985   6,042   6,767   7,746   9,023   9,217   9,396    7.6 
Total FTEs  32,790   34,367   36,149   37,759   38,714   40,167   41,442   44,523   45,217   45,396    3.7 
Growth rates (per cent):                                             
Ministries and special offices (CRF)  2.8   4.8   5.5   2.9   2.8   2.2   0.9   6.3   1.4   0.0    3.0 
Service delivery agencies  1.0   4.7   3.6   13.8   1.0   12.0   14.5   33.3   2.2   1.9    8.8 
Population per FTE: 3                                             
Total FTEs  148.2   143.4   138.6   134.9   133.2   129.5   128.4   123.3   124.9   126.6    -1.7 

 

 

1Full-time equivalents (FTEs) are a measure of staff employment. FTEs are calculated by dividing the total hours of employment paid for in a given period by the number of hours an individual, full-time person would normally work in that period. This does not equate to the physical number of employees. For example, two half-time employees would equal one FTE, or alternatively, three FTEs may represent two full-time employees who have worked sufficient overtime hours to equal an additional FTE.

2Service delivery agency FTE amounts do not include SUCH sector staff employment.

3Population per FTE is calculated using July 1 population (e.g. population on July 1, 2023 divided by 2023/24 FTEs).

 

 

70  | First Quarterly Report 2023/24  

 

 

Appendix – Fiscal Plan Update

 

 

Table A10 Capital Spending – 2016/17 to 2025/26

 

 

($ millions)  Actual
2016/17
   Actual
2017/18
   Actual
2018/19
   Actual
2019/20
   Actual
2020/21
   Actual
2021/22
   Actual
2022/23
   Updated
Forecast
2023/24
   Plan
2024/25
   Plan
2025/26
   Average
annual
change
 
                                           (per cent) 
Taxpayer-supported:                                            
Education                                            
Schools districts  474   578   626   877   944   1,001   934   990   1,038   1,312   12.0 
Post-secondary institutions  792   968   1,024   936   904   899   1,071   1,683   1,697   1,436   6.8 
Health  1,004   890   904   1,009   1,162   1,555   1,915   3,531   3,802   4,434   17.9 
BC Transportation Financing Authority 1  823   717   853   955   1,285   1,364   1,823   3,968   4,188   4,140   19.7 
BC Transit  41   115   85   73   107   67   100   208   507   519   32.6 
Government direct (ministries)  301   430   421   520   389   386   470   699   526   459   4.8 
Social Housing  184   169   483   355   572   642   357   941   703   698   16.0 
Other  40   41   56   47   65   88   85   160   178   78   7.7 
Total taxpayer-supported  3,659   3,908   4,452   4,772   5,428   6,002   6,755   12,180   12,639   13,076   15.2 
Self-supported:                                            
BC Hydro  2,444   2,473   3,826   3,082   3,207   3,475   3,919   3,861   3,924   2,653   0.9 
Columbia Basin power projects  2   1   2   994   7   9   10   9   10   21   29.9 
Transportation Investment Corporation 1  38   4   -   -   -   -   -   -   -   -   n/a 
BC Railway Company  4   11   33   6   1   2   6   7   7   3   -3.1 
ICBC  62   54   66   62   100   54   41   65   42   49   -2.6 
BC Lottery Corporation 2  86   82   75   102   73   90   95   103   100   100   1.7 
Liquor Distribution Branch  27   48   60   36   22   22   16   28   34   27   0.0 
Other 3  62   56   44   104   65   78   78   -   -   -   n/a 
Total self-supported  2,725   2,729   4,106   4,386   3,475   3,730   4,165   4,073   4,117   2,853   0.5 
Total capital spending  6,384   6,637   8,558   9,158   8,903   9,732   10,920   16,253   16,756   15,929   10.7 
Per cent of nominal GDP: 4                                            
Taxpayer-supported  1.4   1.4   1.5   1.5   1.8   1.7   1.7   3.0   3.0   3.0   9.0 
Self-supported  1.0   1.0   1.4   1.4   1.1   1.1   1.1   1.0   1.0   0.7   -4.9 
Total  2.4   2.4   2.9   3.0   2.9   2.8   2.8   4.0   4.0   3.7   4.7 
Growth rates:                                            
Taxpayer-supported  5.8   6.8   13.9   7.2   13.7   10.6   12.5   80.3   3.8   3.5   15.8 
Self-supported  5.9   0.1   50.5   6.8   -20.8   7.3   11.7   -2.2   1.1   -30.7   3.0 
Total  5.8   4.0   28.9   7.0   -2.8   9.3   12.2   48.8   3.1   -4.9   11.1 
Per capita: 5                                            
Taxpayer-supported  753   793   889   937   1,053   1,154   1,270   2,218   2,238   2,276   13.1 
Self-supported  561   554   819   861   674   717   783   742   729   497   -1.3 
Total  1,314   1,346   1,708   1,798   1,727   1,871   2,053   2,960   2,967   2,773   8.7 
Real Per Capita Capital Spending (2022 $) 6  1,562   1,567   1,935   1,990   1,898   2,000   2,053   2,849   2,785   2,547   5.6 
Growth rate (per cent)  2.2   0.4   23.5   2.8   -4.7   5.4   2.7   38.8   -2.2   -8.5   6.0 

 

 

1Includes Transportation Investment Plan capital spending and, beginning in 2017/18, Transportation Investment Corporation rehabilitation costs for the Port Mann Bridge due to reclassification from self-supported commercial Crown corporation to a taxpayer-supported agency in response to the cancellation of tolls. Effective April 1, 2018, Transportation Investment Corporation became a subsidiary of BCTFA.

2Forecasted amounts exclude right-of-use assets.

3Includes post-secondary institutions’ self-supported subsidiaries.

4Capital spending as a per cent of GDP is calculated using nominal GDP for the calendar year ending in the fiscal year (e.g. 2023/24 amounts divided by nominal GDP for the 2023 calendar year).

5Per capita capital spending is calculated using July 1 population (e.g. 2023/24 amounts divided by population on July 1, 2023).

6Capital spending is converted to real (inflation-adjusted) terms using the consumer price index (CPI) for the corresponding calendar year (e.g. 2023 CPI for 2023/24 capital spending).

 

 

  First Quarterly Report 2023/24 |  71

 

 

Appendix – Fiscal Plan Update

 

 

Table A11 Statement of Financial Position – 2016/17 to 2025/26 1

 

 

($ millions)  Actual
2016/17
   Actual
2017/18
   Actual
2018/19
   Actual
2019/20
   Actual
2020/21
   Actual
2021/22
   Actual
2022/23
   Updated
Forecast
2023/24
   Plan
2024/25
   Plan
2025/26
   Average
annual
change
 
                                           (per cent) 
Financial assets:                                             
Cash and temporary investments  4,232   3,440   3,029   3,985   6,560   7,142   8,247   2,961   4,103   3,215    -2.5 
Other financial assets 2  10,209   11,740   12,637   12,404   15,410   17,105   19,077   16,492   18,158   19,466    6.0 
Sinking funds  1,087   1,348   752   692   492   510   521   485   532   352    -9.7 
Investments in commercial Crown corporations:  7,517   6,134   5,738   6,523   9,632   12,223   12,634   13,349   14,528   15,707    6.9 
Retained earnings                                             
Recoverable capital loans  23,809   20,534   22,547   24,768   26,301   27,218   28,145   30,147   32,172   33,359    3.1 
   31,326   26,668   28,285   31,291   35,933   39,441   40,779   43,496   46,700   49,066    4.2 
Total financial assets  46,854   43,196   44,703   48,372   58,395   64,198   68,624   63,434   69,493   72,099    4.0 
Liabilities:                                             
Accounts payable, accrued liabilities & others 2  10,521   11,278   12,137   13,101   14,733   18,509   25,402   22,305   23,976   24,900    8.1 
Deferred revenue  9,665   10,068   10,543   10,651   12,211   13,379   15,005   16,068   17,143   18,194    5.9 
Debt:  41,499   43,607   42,681   46,229   59,750   62,341   59,934   70,772   84,737   98,130    8.1 
Taxpayer-supported debt                                             
Self-supported debt  24,338   21,312   23,281   25,932   27,350   28,325   29,492   31,562   34,092   34,713    3.3 
Forecast allowance  -   -   -   -   -   -   -   700   500   500      
Total provincial debt  65,837   64,919   65,962   72,161   87,100   90,666   89,426   103,034   119,329   133,343    6.6 
Add:  debt offset by sinking funds  1,087   1,348   752   692   492   510   521   485   532   352    -9.7 
Add:  foreign exchange adjustments  -   -   -   -   -   -   472   -   -   n/a      
Less:  guarantees & non-guaranteed debt  (835)  (896)  (850)  (1,337)  (1,335)  (1,402)  (1,523)  (1,415)  (1,380)  (1,355)   4.5 
Financial statement debt  66,089   65,371   65,864   71,516   86,257   89,774   88,896   102,104   118,481   132,340    6.5 
Total liabilities  86,275   86,717   88,544   95,268   113,201   121,662   129,303   140,477   159,600   175,434    6.7 
Net liabilities  (39,421)  (43,521)  (43,841)  (46,896)  (54,806)  (57,464)  (60,679)  (77,043)  (90,107)  (103,335)   9.2 
Capital and other assets:                                             
Tangible capital assets  41,375   45,908   47,902   50,095   52,851   56,133   59,811   69,032   78,450   88,037    7.1 
Restricted assets  1,695   1,768   1,834   1,931   2,003   2,147   2,224   2,313   2,382   2,452    3.4 
Other assets  1,126   932   952   1,100   1,582   1,791   1,347   1,727   2,157   1,591    3.2 
Total capital and other assets  44,196   48,608   50,688   53,126   56,436   60,071   63,382   73,072   82,989   92,080    6.9 
Accumulated surplus (deficit)  4,775   5,087   6,847   6,230   1,630   2,607   2,703   (3,971)  (7,118)  (11,255)     
Per cent of Nominal GDP: 3                                             
Net liabilities  14.9   15.4   14.7   15.2   17.9   16.4   15.5   19.1   21.6   23.8    4.3 
Capital and other assets  16.7   17.2   17.0   17.2   18.4   17.1   16.2   18.1   19.9   21.2    2.2 
Growth rates:                                             
Net liabilities  -4.3   10.4   0.7   7.0   16.9   4.8   5.6   27.0   17.0   14.7    n/a 
Capital and other assets  2.7   10.0   4.3   4.8   6.2   6.4   5.5   15.3   13.6   11.0    n/a 
Per capita: 4                                             
Net liabilities  8,113   8,829   8,750   9,205   10,631   11,046   11,407   14,032   15,954   17,987    7.5 
Capital and other assets  9,095   9,861   10,116   10,428   10,947   11,547   11,915   13,309   14,694   16,028    5.3 

 

 

1Figures have been restated to reflect government’s current accounting policies.

2Forecast includes $663 million derivative assets in other financial assets and $1,031 million derivative liabilities in other liabilities.

3Net liabilities as a per cent of GDP is calculated using nominal GDP for the calendar year ending in the fiscal year (e.g. 2023/24 amount divided by GDP for the 2023 calendar year).

4Per capita net liabilities is calculated using July 1 population (e.g. 2023/24 amount divided by population on July 1, 2023).

 

 

72  | First Quarterly Report 2023/24  

 

 

Appendix – Fiscal Plan Update

 

 

Table A12 Changes in Financial Position – 2016/17 to 2025/26

 

 

($ millions)  Actual
2016/17
   Actual
2017/18
   Actual
2018/19
   Actual
2019/20
   Actual
2021/22
   Actual
2021/22
   Actual
2022/23
   Updated
Forecast
2023/24
   Plan
2024/25
   Plan
2025/26
   10-Year
Total
 
(Surplus) deficit for the year  (2,728)  (276)  (1,494)  362   5,507   (1,265)  (704)  6,674   3,147   4,137   13,360 
Change in remeasurement (gains) losses  (236)  (36)  (266)  255   (907)  288   608   -   -   -   (294)
Change in accumulated (surplus) deficit  (2,964)  (312)  (1,760)  617   4,600   (977)  (96)  6,674   3,147   4,137   13,066 
Capital and other asset changes:                                            
Taxpayer-supported capital investments  3,659   3,908   4,452   4,772   5,428   6,002   6,755   12,180   12,639   13,076   72,871 
Less:  amortization and other accounting changes  (2,638)  625   (2,458)  (2,579)  (2,672)  (2,720)  (3,077)  (2,959)  (3,221)  (3,489)  (25,188)
Increase in net capital assets  1,021   4,533   1,994   2,193   2,756   3,282   3,678   9,221   9,418   9,587   47,683 
Increase (decrease) in restricted assets  64   73   66   97   72   144   77   89   69   70   821 
Increase (decrease) in other assets  87   (194)  20   148   482   209   (444)  380   430   (566)  552 
Change in capital and other assets  1,172   4,412   2,080   2,438   3,310   3,635   3,311   9,690   9,917   9,091   49,056 
Increase (decrease) in net liabilities  (1,792)  4,100   320   3,055   7,910   2,658   3,215   16,364   13,064   13,228   62,122 
                                             
Investment and working capital changes:                                            
Investment in commercial Crown corporations:                                            
Increase (decrease) in retained earnings  (20)  (1,383)  (396)  785   3,109   2,591   411   715   1,179   1,179   8,170 
Self-supported capital investments  2,725   2,729   4,106   4,386   3,475   3,730   4,165   4,073   4,117   2,853   36,359 
Less:  loan repayments and other accounting changes  (957)  (6,004)  (2,093)  (2,165)  (1,942)  (2,813)  (3,238)  (2,071)  (2,092)  (1,666)  (25,041)
Change in investment  1,748   (4,658)  1,617   3,006   4,642   3,508   1,338   2,717   3,204   2,366   19,488 
Increase (decrease) in cash and temporary investments  340   (792)  (411)  956   2,575   582   1,105   (5,286)  1,142   (888)  (677)
Other working capital changes 1  (218)  632   (1,033)  (1,365)  (386)  (3,231)  (6,536)  (587)  (1,033)  (847)  (14,604)
Change in investment and working capital  1,870   (4,818)  173   2,597   6,831   859   (4,093)  (3,156)  3,313   631   4,207 
Increase (decrease) in financial statement debt  78   (718)  493   5,652   14,741   3,517   (878)  13,208   16,377   13,859   66,329 
(Increase) decrease in sinking fund debt  493   (261)  596   60   200   (18)  (11)  36   (47)  180   1,228 
(Increase) decrease in foreign exchange  -   -   -   -   -   (472)  472   -   -   -     
Increase (decrease) in guarantees  (23)  (188)  (2)  57   113   9   (119)  (176)  (540)  541   (328)
Increase (decrease) in non-guaranteed debt  38   249   (44)  430   (115)  58   240   68   505   (566)  863 
Increase (decrease) in total provincial debt  586   (918)  1,043   6,199   14,939   3,566   (1,240)  13,608   16,295   14,014   68,092 
Represented by increase (decrease) in:                                            
Taxpayer-supported debt  (1,220)  2,108   (926)  3,548   13,521   2,591   (2,407)  10,838   13,965   13,393   55,411 
Self-supported debt  1,806   (3,026)  1,969   2,651   1,418   975   1,167   2,070   2,530   621   12,181 
Forecast allowance  -   -   -   -   -   -   -   700   (200)  -   500 
Total provincial debt  586   (918)  1,043   6,199   14,939   3,566   (1,240)  13,608   16,295   14,014   68,092 

 

 

1Includes changes in other financial assets, sinking funds, accounts payable, deferred revenue and other accrued liabilities.

 

 

  First Quarterly Report 2023/24  |  73

 

 

Appendix – Fiscal Plan Update

 

 

Table A13 Provincial Debt – 2016/17 to 2025/26

 

 

($ millions)  Actual
2016/17
   Actual
2017/18
   Actual
2018/19
   Actual
2019/20
   Actual
2020/21
   Actual
2021/22
   Actual
2022/23
   Updated
Forecast
2023/24
   Plan
2024/25
   Plan
2025/26
   Average
annual
change
 
                                          (per cent) 
Taxpayer-supported debt:                                            
Provincial government                                             
Operating  4,644   1,156   -   -   8,746   7,233   -   1,871   4,131   5,860    2.6 
Capital 2                                             
K-12 education  8,454   8,891   8,885   9,757   10,529   11,342   10,893   11,614   12,465   13,479    5.3 
Post-secondary institutions  4,285   4,584   4,607   4,917   5,426   5,732   5,502   6,156   7,073   7,822    6.9 
Health facilities  5,835   6,141   6,173   6,705   7,484   8,223   8,286   9,988   12,773   15,991    11.9 
Ministries general capital  2,288   2,718   2,363   3,133   3,702   4,087   4,549   5,109   5,559   5,972    11.2 
Transportation  2,174   5,682   5,401   5,401   5,401   5,401   5,391   5,392   5,393   5,395    10.6 
Social housing  449   619   619   805   1,062   1,424   1,648   2,110   2,624   3,165    24.2 
Other  242   242   242   252   268   278   269   370   493   528    9.1 
Total capital  23,727   28,877   28,290   30,970   33,872   36,487   36,538   40,739   46,380   52,352    9.2 
Total provincial government  28,371   30,033   28,290   30,970   42,618   43,720   36,538   42,610   50,511   58,212    8.3 
Taxpayer-supported entities:                                             
BC Pavilion Corporation  143   141   138   135   132   129   126   123   120   116    -2.3 
BC Transit  94   84   73   65   60   56   53   97   215   349    15.7 
BC Transportation Financing Authority  9,974   10,388   11,293   12,193   13,321   14,615   18,992   22,930   27,620   32,330    14.0 
Health Authorities and Hospital Societies  1,717   1,762   1,795   1,802   1,875   1,839   1,983   2,380   2,332   2,281    3.2 
InBC Investment Corp.  217   161   70   45   37   19   21   84   188   304    3.8 
Post-secondary institutions  699   744   763   753   882   922   910   944   1,025   1,029    4.4 
School districts  19   17   19   18   24   25   21   17   13   8    -9.2 
Social housing  246   259   225   222   770   974   1,241   1,566   2,694   3,484    34.2 
Other  19   18   15   26   31   42   49   21   19   17    -1.4 
Total taxpayer-supported entities  13,128   13,574   14,391   15,259   17,132   18,621   23,396   28,162   34,226   39,918    13.2 
Total taxpayer-supported debt  41,499   43,607   42,681   46,229   59,750   62,341   59,934   70,772   84,737   98,130    10.0 
                                              
Self-supported debt:                                             
Commercial Crown corporations and agencies                                             
BC Hydro  19,685   19,990   22,064   23,238   24,650   25,611   26,707   28,889   31,458   32,098    5.6 
BC Liquor Distribution Branch  -   -   -   210   233   230   242   243   245   250    3.0 
BC Lottery Corporation  145   155   100   233   228   195   201   121   109   110    -3.0 
Columbia Basin power projects  448   433   418   1,387   1,349   1,319   1,298   1,271   1,242   1,210    11.7 
Columbia Power Corporation  291   286   282   276   271   266   270   264   259   253    -1.6 
Post-secondary institution subsidiaries  340   418   387   504   520   615   685   677   677   677    8.0 
Transportation Investment Corporation 1  3,398   -   -   -   -   -   -   -   -   -    n/a 
Other  31   30   30   84   99   89   89   97   103   115    15.7 
Total self-supported debt  24,338   21,312   23,281   25,932   27,350   28,325   29,492   31,562   34,092   34,713    4.0 
Forecast allowance  -   -   -   -   -   -   -   700   500   500    n/a 
Total provincial debt  65,837   64,919   65,962   72,161   87,100   90,666   89,426   103,034   119,329   133,343    8.2 

 

 

1Beginning in 2017/18, debt related to the Port Mann Bridge was reclassified as taxpayer-supported due to the elimination of tolls effective September 1, 2017.

2Includes debt incurred by the government to fund the building and construction of capital assets in the education, health, social housing and other sectors.

 

 

74  | First Quarterly Report 2023/24  

 

 

Appendix – Fiscal Plan Update

 

 

Table A14 Provincial Debt Supplementary Information – 2016/17 to 2025/26 1

 

 

($ millions)  Actual
2016/17
   Actual
2017/18
   Actual
2018/19
   Actual
2019/20
   Actual
2020/21
   Actual
2021/22
   Actual
2022/23
   Updated
Forecast
2023/24
   Plan
2024/25
   Plan
2025/26
   Average
annual
change
 
                                           (per cent) 
Per cent of nominal GDP: 2                                            
Taxpayer-supported debt:                                            
Provincial government direct operating  1.8   0.4   -   -   2.8   2.1   -   0.5   1.0   1.4   -2.9 
Provincial government capital  9.0   10.2   9.5   10.0   11.0   10.4   9.3   10.1   11.1   12.1   3.3 
Total provincial government  10.8   10.6   9.5   10.0   13.9   12.5   9.3   10.6   12.1   13.4   2.5 
Taxpayer-supported entities  5.0   4.8   4.8   4.9   5.6   5.3   6.0   7.0   8.2   9.2   7.1 
Total taxpayer-supported debt  15.7   15.4   14.4   15.0   19.5   17.8   15.3   17.6   20.3   22.6   4.1 
Self-supported debt:                                            
Commercial Crown corporations & agencies  9.2   7.6   7.8   8.4   8.9   8.1   7.5   7.8   8.2   8.0   -1.6 
Total provincial debt  24.9   23.0   22.2   23.4   28.4   25.9   22.8   25.6   28.7   30.7   2.3 
Growth rates (per cent):                                            
Taxpayer-supported debt:                                            
Provincial government direct operating  -42.2   -75.1   -100.0   -   -   -17.3   -100.0   -   120.8   41.9   -16.9 
Provincial government capital  6.3   21.7   -2.0   9.5   9.4   7.7   0.1   11.5   13.8   12.9   8.8 
Taxpayer-supported entities  6.2   3.4   6.0   6.0   12.3   8.7   25.6   20.4   21.5   16.6   12.2 
Total taxpayer-supported debt  -2.9   5.1   -2.1   8.3   29.2   4.3   -3.9   18.1   19.7   15.8   8.5 
Self-supported debt:                                            
Commercial Crown corporations & agencies  8.0   -12.4   9.2   11.4   5.5   3.6   4.1   7.0   8.0   1.8   4.8 
Total provincial debt  0.9   -1.4   1.6   9.4   20.7   4.1   -1.4   15.2   15.8   11.7   7.3 
Per capita: 3                                            
Taxpayer-supported debt:                                            
Provincial government direct operating  956   235   -   -   1,696   1,390   -   341   731   1,020   0.7 
Provincial government capital  4,883   5,858   5,646   6,079   6,570   7,014   6,869   7,420   8,212   9,113   7.2 
Taxpayer-supported entities  2,702   2,754   2,872   2,995   3,323   3,579   4,398   5,129   6,060   6,948   11.1 
Total taxpayer-supported debt  8,540   8,846   8,518   9,074   11,590   11,983   11,267   12,890   15,003   17,081   8.0 
Self-supported debt:                                            
Commercial Crown corporations & agencies  5,009   4,323   4,646   5,090   5,305   5,445   5,544   5,749   6,036   6,042   2.1 
Total provincial debt  13,549   13,170   13,165   14,164   16,895   17,428   16,812   18,766   21,128   23,211   6.2 
Real Per Capita Provincial Debt (2022 $) 4  16,106   15,330   14,918   15,684   18,566   18,631   16,812   18,059   19,834   21,325   3.2 
Growth rate (per cent)  4.1   -4.8   -2.7   5.1   18.4   0.4   -9.8   7.4   9.8   7.5   3.3 

 

 

1Numbers may not add due to rounding.

2Debt as a per cent of GDP is calculated using nominal GDP for the calendar year ending in the fiscal year (e.g. 2023/24 debt divided by nominal GDP for the 2023 calendar year).

3Per capita debt is calculated using July 1 population (e.g. 2023/24 debt divided by population on July 1, 2023).

4Debt is converted to real (inflation-adjusted) terms using the consumer price index (CPI) for the corresponding calendar year (e.g. 2023 CPI for 2023/24 debt).

 

 

  First Quarterly Report 2023/24 |  75

 

 

Appendix – Fiscal Plan Update

 

 

Table A15 Key Provincial Debt Indicators – 2016/17 to 2025/26

 

 

   Actual
2016/17
   Actual
2017/18
   Actual
2018/19
   Actual
2019/20
   Actual
2020/21
   Actual
2021/22
   Actual
2022/23
   Updated
Forecast
2023/24
   Plan
2024/25
   Plan
2025/26
   Average
annual
change
 
Debt to revenue (per cent)                                          (per cent) 
Total provincial  99.3   94.7   89.5   95.9   115.1   104.3   90.6   111.8   122.9   133.6   3.4 
Taxpayer-supported  81.8   82.5   75.0   80.6   101.2   90.8   74.3   95.5   108.7   124.6   4.8 
Debt per capita ($) 1                                            
Total provincial  13,549   13,170   13,165   14,164   16,895   17,428   16,813   18,766   21,128   23,211   6.2 
Taxpayer-supported  8,540   8,846   8,518   9,074   11,590   11,983   11,268   12,890   15,004   17,081   8.0 
Debt to nominal GDP (per cent) 2                                            
Total provincial  24.9   23.0   22.2   23.4   28.4   25.9   22.8   25.6   28.7   30.7   2.3 
Taxpayer-supported  15.7   15.4   14.4   15.0   19.5   17.8   15.3   17.6   20.3   22.6   4.1 
Interest bite (cents per dollar of revenue) 3                                            
Total provincial  3.8   4.0   3.8   3.8   3.7   3.3   3.2   3.7   4.1   4.6   2.1 
Taxpayer-supported  3.2   3.3   3.2   3.1   3.1   2.8   2.5   3.1   3.6   4.2   2.9 
Interest costs ($ millions)                                            
Total provincial  2,521   2,759   2,786   2,893   2,817   2,848   3,114   3,415   4,002   4,553   6.8 
Taxpayer-supported  1,644   1,725   1,793   1,807   1,832   1,896   2,030   2,302   2,823   3,313   8.1 
Interest rate (per cent) 4                                            
Taxpayer-supported  3.9   4.1   4.2   4.1   3.5   3.1   3.3   3.5   3.6   3.6   -0.8 
Background Information:                                            
Revenue ($ millions)                                            
Total provincial 5  66,334   68,551   73,734   75,283   75,691   86,903   98,655   92,119   97,120   99,798   4.6 
Taxpayer-supported 6  50,726   52,866   56,881   57,386   59,033   68,658   80,647   74,128   77,961   78,787   5.0 
Debt ($ millions)                                            
Total provincial  65,837   64,919   65,962   72,161   87,100   90,666   89,426   103,034   119,329   133,343   8.2 
Taxpayer-supported 7  41,499   43,607   42,681   46,229   59,750   62,341   59,934   70,772   84,737   98,130   10.0 
Provincial nominal GDP ($ millions) 8  263,912   282,283   297,392   308,993   306,947   350,598   391,669   403,219   416,423   434,159   5.7 
Population (thousands at July 1) 9  4,859   4,929   5,010   5,095   5,155   5,202   5,319   5,490   5,648   5,745   1.9 

 

 

1The ratio of debt to population (e.g. 2023/24 debt divided by population at July 1, 2023).

2The ratio of debt outstanding at fiscal year end to provincial nominal gross domestic product (GDP) for the calendar year ending in the fiscal year (e.g. 2023/24 debt divided by 2023 nominal GDP).

3The ratio of interest costs (less sinking fund interest) to revenue. Figures include capitalized interest expense in order to provide a more comparable measure to outstanding debt.

4Weighted average of all outstanding debt issues.

5Includes revenue of the consolidated revenue fund (excluding dividends from enterprises) plus revenue of all government organizations and enterprises.

6Excludes revenue of government enterprises, but includes dividends from enterprises paid to the consolidated revenue fund.

7Excludes debt of commercial Crown corporations and agencies and funds held under the province’s warehouse borrowing program.

8Nominal GDP for the calendar year ending in the fiscal year (e.g. nominal GDP for 2023 is used for the fiscal year ended March 31, 2024).

9Population at July 1st within the fiscal year (e.g. population at July 1, 2023 is used for the fiscal year ended March 31, 2024).

 

 

76  | First Quarterly Report 2023/24