News Releases
Budget 2012 Backgrounder: Facts & Figures
A prudent Budget 2012 focuses on maintaining existing government services within existing allocations. Increased spending will be in healthcare, education, justice and social supports. Budget 2012 protects taxpayers from additional pressures, and contains a number of growth initiatives that will help stimulate the economy and create jobs.
Key Messages
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Disciplined Budget maintains spending increases at appropriate levels
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Protects taxpayers from additional pressures
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Mitigates against external risk
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Growth initiatives that will help stimulate the economy and create jobs
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Debt kept affordable though responsible spending/Net Zero Mandate
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Maintains BCs high credit rating
Growth
As has been the case in previous years the government growth projections are lower than those of the independent Economic Forecast Council.
|
2012 |
2013 |
2014 |
Economic Forecast Council |
2.2 |
2.5 |
2.7 |
Ministry forecasts |
1.8 |
2.2 |
2.5 |
Risks
The economic risks identified by the government are largely focused on the continued uncertainty surrounding global economic activity. These are;
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A return to recession in the US
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European sovereign debt crisis
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Slower than anticipated Asian demand, weaker demand for BC’s exports
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Exchange rate volatility
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Further weakening of the US dollar creating disruptions in financial and commodity markets
In addition the government has also identified several risks to the fiscal plan that are focused on changes in factors that government does not directly control. These are;
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Risks to BC economic outlook, from global economic uncertainty
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Potential changes to Crown Corporation revenue
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Utilization rates for government services such as health care
Prudence
To mitigate these risks the government built in 3 levels of prudence. These are;
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The lower GDP growth projections of the Ministry relative to the Economic Forecast Council.
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Contingencies of $300 million in 2012/13 and $250 million in each of 2013/14 and 2014/15
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A forecast allowance of $200 million in 2012/13, $250 million in 2013/14 and $350 million in 2014/15 to guard against revenue volatility
Revenue Outlook
The government is projecting a return to balance by 2013-14. The focus has been on providing the government with the spending authority to manage the provincial books for the coming year, and on targeted initiatives, rather than on significant new spending.
|
2012 |
2013 |
2014 |
Revenue |
43,101 |
44,603 |
45,711 |
Expenses |
(43,869) |
(44,199) |
(45,111) |
Surplus (deficit) |
(768) |
404 |
600 |
Revenue is expected to grow on average 2.9% over the next few years, reflecting rising commodity prices over the next 3 years. This revenue growth includes continuation of the small business corporate tax rate at 2.5%.
Spending
Budget 2012 places an emphasis on protecting the Provinces existing capital investments, as such, no significant program spending was announced.
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Healthcare budget increasing by $1.5 billion (majority is capital)
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$237 million (3 years) to Justice for caseloads and maintaining existing services
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$444 million (3 years) for income, disability and supplementary assistance
Debt
Budget 2012 shows an increase in the debt to GDP ratio. The Chamber is concerned by the increase in taxpayer supported debt.
|
2012 |
2013 |
2014 |
Direct operating debt |
9,286 |
9,767 |
9,275 |
Taxpayer-supported debt |
38,736 |
41,656 |
43,702 |
Total debt (incl forecast allowance) |
57,603 |
62,714 |
66,354 |
Taxpayer-supported debt-to-GDP ratio |
17.6% |
18.2% |
18.3% |
