Amendment to Annual Report of a Foreign Government or Political Subdivision — Form 18-K
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Second Quarterly Report
on the Economy, Fiscal Situation,
and Outlook
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FISCAL YEAR 2002/03
SIX MONTHS
APRIL -- SEPTEMBER 2002
[PROVINCE OF B.C. LOGO]
Ministry of Finance
www.gov.bc.ca
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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
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TABLE OF CONTENTS
Second Quarterly Report 2002/03 November 28, 2002
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[Download Table]
SUMMARY................................................................... 3
PART ONE -- ECONOMIC REPORT
Overview................................................................ 5
International Economic Developments..................................... 5
Financial Market Developments........................................... 7
British Columbia Economic Developments.................................. 9
External Trade........................................................ 9
The Labour Market..................................................... 10
Domestic Demand....................................................... 11
British Columbia Economic Forecast...................................... 12
Tables:
1.1 British Columbia Economic Indicators.............................. 9
1.2 Current Economic Statistics....................................... 14
Topic Box:
British Columbia's Economic Performance in 2001....................... 15
PART TWO -- UPDATED FINANCIAL FORECAST
Overview................................................................ 16
Consolidated Revenue Fund Revenue....................................... 19
Consolidated Revenue Fund Expenditure................................... 21
Crown Corporations and Agencies......................................... 24
Full-Time Equivalents (FTEs)............................................ 26
Provincial Capital Spending............................................. 27
Provincial Debt......................................................... 30
Tables:
2.1 Updated 2002/03 Financial ........................................ 16
2.2 Summary of Updates to the 2002/03 Budget.......................... 17
2.3 Consolidated Revenue Fund -- Updated Revenue Forecast............. 19
2.4 Consolidated Revenue Fund -- Updated Expenditure Forecast......... 22
2.5 2002/03 Pressures Allocated to the Contingencies Vote............. 23
2.6 2002/03 Crown Corporation and Agency Updated Forecast............. 25
2.7 Capital Expenditures -- Updated Forecast.......................... 27
2.8 Summary of Changes from the 2002/03 Budget -- Capital and Debt.... 28
2.9 Provincial Debt Summary -- Updated Forecast....................... 31
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2 TABLE OF CONTENTS
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[Download Table]
APPENDIX -- FINANCIAL RESULTS FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2002
A.1 Operating Results.................................................. 33
A.2 Consolidated Revenue Fund Revenue by Source........................ 34
A.3 Consolidated Revenue Fund Expenditure by Ministry.................. 35
A.4 Crown Corporation and Agency Results............................... 36
A.5 Capital Expenditures............................................... 37
A.6 Capital Expenditure Projects Greater Than $50 million.............. 38
A.7 Provincial Debt Outstanding........................................ 39
A.8 Main Revenue Assumptions and Sensitivities -- Consolidated
Revenue Fund....................................................... 40
A.9 Main Expenditure Assumptions and Sensitivities -- Consolidated
Revenue Fund....................................................... 42
A.10 Crown Corporation Assumptions and Sensitivities.................... 46
A.11 Statement of Financial Position.................................... 47
A.12 Full-Time Equivalents (FTEs) -- Updated Forecast................... 48
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SECOND QUARTERLY REPORT 2002/03
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SUMMARY
SECOND QUARTERLY REPORT 2002/03
November 28, 2002 [PROVINCE OF B.C. LOGO]
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UPDATED 2002/03 FINANCIAL FORECAST
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[Enlarge/Download Table]
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2002/03
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Budget Updated
Estimate Forecast Variance
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($ millions)
CRF Revenue............................................. 22,038 21,926 (112)
CRF Expenditure......................................... (25,556) (25,300) 256
Crown corporation and agency net results (1)............ (132) (126) 6
------- ------- ------
Subtotal................................................ (3,650) (3,500) 150
Forecast allowance...................................... (750) (500) 250
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DEFICIT................................................. (4,400) (4,000) 400
------- ------- ------
------- ------- ------
Taxpayer-supported debt................................. 31,601 30,766 (835)
Total debt.............................................. 40,728 38,909 (1,819)
Taxpayer-supported debt as a per cent of GDP............ 24.3% 23.1% -1.2%
(1) Net of dividend payments and contributions to the CRF.
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o After turning up in the first six months of the year, economic indicators
in British Columbia were mixed during the July to September quarter.
o Currently, the Ministry of Finance is forecasting B.C. real GDP growth of
1.4 per cent in 2002 and 2.7 per cent in 2003. This compares to private
sector consensus forecasts of 1.7 per cent in 2002 and 3.0 per cent in
2003.
o The updated 2002/03 deficit forecast now stands at $4.0 billion, $400
million lower than budget.
o Consolidated revenue fund (CRF) revenue is forecast to be $112 million
lower than budget. The decrease is mainly due to lower-than-expected
taxation and natural resource revenue, partially offset by higher federal
equalization payments and higher Crown corporation contributions.
o CRF spending is projected to be $256 million below budget, mainly due to
lower debt interest costs and lower employment assistance caseloads in the
Ministry of Human Resources.
o The forecast allowance, originally set at $750 million in February, has
been lowered to $500 million, reflecting the risks to the bottom line over
the remaining months of the fiscal year.
o Overall debt is forecast to be $1.8 billion below budget.
o Since the first QUARTERLY REPORT, the deficit forecast has improved by $15
million reflecting a $66 million reduction in CRF spending, a $39 million
improvement in Crown corporation net results and the $250 million reduction
in the forecast allowance. These improvements more than offset a $340
million reduction in CRF revenues due to weaker tax assessments for the
2001 tax year.
o Operating results for the first six months of the 2002/03 fiscal year
show a deficit of $896 million, a $957 million improvement from budget
largely due to lower-than-expected spending of $577 million.
o A new five-year economic forecast, the third QUARTERLY REPORT for 2002/03
and an updated three-year fiscal plan for 2003/04 to 2005/06 will be
released with the next budget on February 18, 2003.
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SECOND QUARTERLY REPORT 2002/03
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PART ONE -- ECONOMIC REPORT (1)
Second Quarterly Report 2002/03 November 28, 2002
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OVERVIEW
After turning up in the first six months of the year, economic indicators in
British Columbia were mixed during the July to September quarter. Employment
and housing starts grew strongly compared to the April to June quarter while
retail sales slowed and the value of non-residential building permits
declined. Exports and manufacturing shipments posted modest gains during the
quarter.
Currently, the Ministry of Finance is forecasting B.C. real GDP growth of 1.4
per cent in 2002 and 2.7 per cent in 2003. The data through September suggest
stronger results for 2002 could be achieved.
The Minister of Finance will be meeting with the independent Economic
Forecast Council on December 9, 2002, to obtain their views on the outlook
for the B.C. economy. A new five-year economic forecast that incorporates
their advice will be developed for the February 18, 2003 budget.
CHART 1.1 B.C. JOB GROWTH STRONG IN THIRD QUARTER
[LINE CHART -- NO DATA PROVIDED]
Source: Statistics Canada
INTERNATIONAL ECONOMIC DEVELOPMENTS
During the July to September quarter, the North American economy expanded at
a moderate pace. Signs of a faltering U.S. recovery were apparent while the
Canadian economy reported robust growth.
While the U.S. economy expanded at a 3.1 per cent annualized rate in the
third quarter, there were some underlying signs of weakness. Though consumer
spending was up a seemingly robust 4.2 per cent
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(1) The Economic Report and accompanying charts and tables incorporate
information available as of November 22, 2002.
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SECOND QUARTERLY REPORT 2002/03
6 ECONOMIC REPORT
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annualized, most of the increase was due to a surge in automobile sales
caused by dealer incentives. In addition, while overall business fixed
investment stabilized after seven consecutive quarters of decline, spending
on the non-residential structures component plummeted 16 per cent annualized.
This weakness in non-residential investment was a result of the significant
excess capacity that has continued to plague the U.S. economy.
U.S. employment growth in the July to September period was moderate, though
small declines occurred in September and October. However, the unemployment
rate declined from 5.9 per cent in July to 5.6 per cent in September. The
Institute of Supply Management (ISM) index fell below 50 per cent for
September and October, suggesting a pause in the manufacturing sector's
expansion.
On the positive side, although concerns were raised about consumer confidence
following the stock market declines, the housing sector continued to benefit
from low interest rates. In September, housing starts in the U.S. surged to a
16-year high, reversing three consecutive monthly declines. Although housing
starts retreated in October from their September high, robust demand, builder
optimism and low interest rates are causing residential construction activity
to proceed at a sturdy pace.
Forecasters raised their 2002 U.S. outlook earlier in the year, but since
July these forecasts have come down. Forecasters expect economic weakness to
continue and have lowered their outlook for 2003. In January 2002, the
consensus U.S. growth forecast was for 0.9 per cent growth in 2002 and 3.5
per cent growth in 2003. The latest CONSENSUS FORECASTS (published in
November 2002) has real GDP growth of 2.3 per cent in 2002 and 2.7 per cent
in 2003.
CHART 1.2 U.S. CONSENSUS FORECAST, 2002
U.S. real GDP
Per cent change
[Download Table]
2002
----
Jan............................................................. 0.9
Feb............................................................. 1.6
March........................................................... 2.1
April........................................................... 2.6
May............................................................. 2.8
June............................................................ 2.7
July............................................................ 2.8
Aug............................................................. 2.3
Sept............................................................ 2.4
Oct............................................................. 2.4
Nov............................................................. 2.3
Source: CONSENSUS FORECASTS
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ECONOMIC REPORT 7
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CHART 1.3 2003 U.S. OUTLOOK HAS DECLINED
U.S. real GDP
Per cent change
[Download Table]
2002
----
Jan............................................................. 3.5
Feb............................................................. 3.6
March........................................................... 3.5
April........................................................... 3.5
May............................................................. 3.5
June............................................................ 3.6
July............................................................ 3.6
Aug............................................................. 3.1
Sept............................................................ 3.1
Oct............................................................. 3.0
Nov............................................................. 2.7
Source: CONSENSUS FORECASTS
Japanese real GDP rose 3.0 per cent in the July to September period over the
previous three months on an annualized basis, and second quarter real GDP was
revised upwards to an annualized 4.2 per cent. The pick up in growth is
positive news for the Japanese economy, whose government continues to face
pressures for significant structural reforms. However, the outlook remains
weak.
Elsewhere, the European economy is confronting challenges including weakening
domestic demand and, in Germany, a fragile banking system.
In Canada, steady job growth and consumer spending, and a healthy housing
sector suggest overall economic growth will come in at around a 4 per cent
annualized rate in the third calendar quarter. The International Monetary
Fund expects Canada to lead economic growth in the G-7 nations this year and
next.
Much of the job growth in Canada so far in 2002 has been in the manufacturing
sector, a sector that has benefited from the relatively low value of the
Canadian dollar. However, if the Canadian dollar stabilizes and begins to
appreciate against the U.S. currency in the near term, this advantage will be
reduced. Growth in Canada could subsequently slow if the U.S. economy,
Canada's largest export market, weakens further.
FINANCIAL MARKET DEVELOPMENTS
Interest rates held steady during the July to September period, in the face
of rising economic, financial and geopolitical uncertainty. Meanwhile, the
value of the Canadian currency fell against the U.S. dollar.
In the U.S., the intended federal funds rate was unchanged at 1.75 per cent
during the July to September period. However, the recent
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8 ECONOMIC REPORT
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CHART 1.4 INTEREST RATES REMAINED LOW
[LINE CHART -- NO DATA PROVIDED]
Source: Bank of Canada and U.S. Federal Reserve Board
economic weakness in the U.S. economy prompted the Federal Reserve Board to
lower the intended federal funds rate by 50 basis points on November 6, 2002.
In Canada, the Bank of Canada held the overnight target rate at 2.75 per
cent, following a 25 basis point increase on July 16, 2002. Low mortgage
interest rates have supported interest sensitive areas of both economies
including the retail and housing sectors. The Bank of Canada indicated in its
October MONETARY POLICY REPORT that the amount of monetary stimulus to be
removed from the economy had lessened because of slowing economic growth in
the U.S. The Bank also expressed concerns about the effects of "headwinds"
arising from financial market volatility and global uncertainty.
CHART 1.5 CANADIAN DOLLAR REMAINS VOLATILE
[LINE CHART -- NO DATA PROVIDED]
Source: Bank of Canada
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ECONOMIC REPORT 9
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Continuing its volatile track, the Canadian dollar declined in the July to
September period to average 64.0 cents US, down from 64.3 cents US in the
previous quarter. The downward pressure on the dollar came as increased
global uncertainty and geopolitical developments led investors to seek a safe
haven in the U.S. markets.
BRITISH COLUMBIA ECONOMIC DEVELOPMENTS
After turning up in the first six months of 2002, British Columbia economic
indicators were mixed during the July to September quarter.
Employment growth accelerated in the July to September quarter to 2.1 per
cent from 0.9 per cent in the April to June quarter. Retail sales fell in the
July to September quarter as automobile sales fell off, although the level of
activity remained above last year's levels. Housing starts put in a strong
performance, benefiting from low interest rates and federal and provincial
tax cuts. On the external side, trade in goods was up in the July to
September quarter compared to April to June, despite generally lower
commodity prices.
TABLE 1.1 BRITISH COLUMBIA ECONOMIC INDICATORS
[Enlarge/Download Table]
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Third Quarter Year-to-Date
July to Sept. 2002 Jan to Sept 2002
change from change from
All data seaonally adjusted April to June 2002 Jan to Sept 2001
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Per cent change
Employment............................ +2.1 +0.6
Manufacturing Shipments............... +0.7 -2.1
Exports............................... +0.5 -11.5
Retail Sales.......................... -0.8 +5.9
Housing Starts........................ +20.5 +21.6
Non-Residential Building Permits...... -7.6 -26.0
Source: Statistics Canada, Canada Mortgage and Housing Corporation
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EXTERNAL TRADE
The value of merchandise exports rose 0.5 per cent in the July to September
quarter, compared to the April to June period. Increased exports of machinery
and equipment, agriculture and fish products, industrial and consumer
products, as well as energy, were partly offset by a reduction in forest
product exports. This reflected lower forest product prices, particularly for
lumber, during this period. In response to the U.S. tariff that came into
effect on May 22, 2002, more efficient mills in the province increased
production as a way of lowering average costs. Spruce-pine-fir 2x4s averaged
$223 US per thousand board feet in the July to September period, down from
$262 US in the April to June period. Recently, prices have fallen below $200
US.
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SECOND QUARTERLY REPORT 2002/03
10 ECONOMIC REPORT
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CHART 1.6 SOFTWOOD LUMBER PRICES WEAKENED
[LINE CHART -- NO DATA PROVIDED]
Source: Madison's Lumber Reporter
The energy price spike in late 2000 and early 2001 continues to affect the
year-to-date export figures. Year-to-date, the value of merchandise exports
was down 11.5 per cent from the first nine months of last year. Over 80 per
cent of this decline was due to the lower value of energy exports compared to
2001 resulting from the energy price decline.
CHART 1.7 B.C. MERCHANDISE EXPORTS
[LINE CHART -- NO DATA PROVIDED]
Source: Statistics Canada, BC STATS
The port strike in the U.S. does not appear to have had a significant impact
on activity at the Port of Vancouver, B.C., as the Vancouver facility was
running at or near capacity. Few ships were redirected from U.S. ports to
Vancouver and the strike was relatively short.
THE LABOUR MARKET
Topping 2 million jobs for the first time in August, employment grew 2.1 per
cent or 41,700 jobs in the July to September quarter compared to the previous
quarter. Just over half of the job gains in the quarter were in full-time
employment. As well, almost all of the job gains were in
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SECOND QUARTERLY REPORT 2002/03
ECONOMIC REPORT 11
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paid private sector employment (versus self employment or the public sector).
The unemployment rate averaged 8.0 per cent, down from 9.0 per cent in the
April to June period.
Employment gains during the July to September quarter were wide spread. Most
sectors recorded job growth, with manufacturing, construction, transportation
and warehousing, and real estate related service industries as the main
sources of growth. Accommodation, food and beverage services recorded the
largest decline, reflecting lower tourism related activity in the July to
September quarter. In October, employment declined a slight 0.1 per cent from
September.
CHART 1.8 B.C. EMPLOYMENT GAINS WIDE SPREAD
[GRAPH -- NO DATA PROVIDED]
Source: Statistics Canada
DOMESTIC DEMAND
On the domestic side, employment gains, low interest rates and relatively
stable consumer confidence contributed to continued consumer spending.
However, retail sales declined 0.8 per cent in the July to September quarter
as automobile sales fell off, following strong growth of 2.0 per cent in the
April to June quarter.
CHART 1.9 HOUSING STARTS PICK UP IN 2002
[GRAPH -- NO DATA PROVIDED]
Source: Canada Mortgage and Housing Corporation
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12 ECONOMIC REPORT
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The housing sector remained an area of strength in the British Columbia
economy. In August, housing starts jumped to their highest level since June
1997. The average for the July to September period was around 23,700 units,
up 20.5 per cent from the April to June quarter. In October, starts continued
their strong pace, rising 20.2 per cent over the September level.
BRITISH COLUMBIA ECONOMIC FORECAST
In the first QUARTERLY REPORT, the British Columbia economy was forecast to
expand 1.4 per cent in 2002, and 2.7 per cent in 2003. For 2002, this
forecast was based on a prudent 2.0 per cent assumption for U.S. economic
growth, which compares to the latest consensus forecast of 2.3 per cent. This
higher-than-expected U.S. growth, combined with positive trends in British
Columbia, could result in B.C. real GDP growth exceeding the current forecast
of 1.4 per cent.
CHART 1.10 B.C. ECONOMIC FORECAST
B.C. real GDP
Per cent change
[Download Table]
First Quarterly Report
(September 13, 2002) Economic Forecast Council
---------------------- -------------------------
2002................. 1.4 1.7
2003................. 2.7 3.0
2004................. 3.2 3.4
2005................. 3.2 3.5
Sources: B.C. Ministry of Finance, various financial institutions and
forecasters.
A different story is emerging for 2003, as recent events in the U.S. have
pointed to the possibility of weaker-than-expected U.S. economic growth next
year. The main concerns are the delayed recovery of profits and investment in
the business sector, the continuing equity market malaise, and the staying
power of consumer spending. The latest consensus forecast for U.S. real GDP
growth in 2003 is 2.7 per cent (see Chart 1.3), down from both the 3.1 per
cent consensus figure that was published in September and the Ministry of
Finance assumption of 3.0 per cent economic growth in the first QUARTERLY
REPORT. If these emerging trends continue unabated, lower U.S. economic
growth could result in lower British Columbia economic growth in 2003.
For Canada, the Ministry assumption in the first QUARTERLY REPORT was for
growth of 3.0 per cent in 2002 and 3.2 per cent in 2003. These assumptions
remain below the current consensus forecast, which is for
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ECONOMIC REPORT 13
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"THE BANK HAS LOWERED ITS GROWTH PROJECTION FOR CANADA THROUGH 2003 BECAUSE
OF THE DAMPENING INFLUENCES OF GLOBAL ECONOMIC, FINANCIAL AND GEOPOLITICAL
DEVELOPMENTS" -- Bank of Canada, Monetary Policy Report, October 2002
growth of 3.4 per cent in both 2002 and 2003. However, continued weakness in
the U.S. may ultimately spill over to Canada and result in reduced Canadian
economic growth in 2003.
The Minister of Finance will be meeting with the independent Economic
Forecast Council on December 9, 2002 to obtain their views on the North
American and British Columbia economic outlook. A new five-year forecast,
incorporating their advice, will be developed for the February 18, 2003
budget.
While the most important risks to the British Columbia economic outlook
remain the strength of the U.S. recovery and geopolitical uncertainty,
several other factors may also play key roles. For example, the
Vancouver/Whistler bid for the 2010 Olympic Winter Games could result in
opportunities related to possible new investment in infrastructure. In
addition, although a longer term issue, the implications of the proposed
ratification of the Kyoto accord on climate change remain unclear.
Other risks, both positive and negative, exist as well.
o A durable and fair solution of the softwood lumber dispute could give a
boost to the province's forest sector.
o The U.S. and Canada may return to the high-productivity fuelled growth
recorded in the late 1990s, creating increased demand for British
Columbia's exports.
o Productivity in the U.S. may decline, resulting in slower growth over the
longer term.
o A muted global industrial recovery may fail to generate demand for
commodities, causing key commodity prices to fall and thus hurting British
Columbia exports.
o North American business and consumer confidence, already weakened by stock
market declines and corporate accounting problems, may not recover. A
further drop in confidence could stall the economic recovery currently
underway.
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TABLE 1.2 CURRENT ECONOMIC STATISTICS
[Enlarge/Download Table]
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Year-to-Date
Average
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Latest Period 2001 2002 Change
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BRITISH COLUMBIA
LABOUR MARKET
Employment (s.a.(1), thousands) ............................. Oct 2,000 1,947 1,966 1.0%
Unemployment rate (s.a., per cent) .......................... Oct 8.3 7.4 8.6 1.2
Total net in-migration (quarterly flows, persons)............ June 6,877 9,143 7,513 (1,630)
Interprovincial (quarterly flows, persons)................. June (1,841) (1,684) (2,015) (331)
International (quarterly flows, persons)................... June 8,718 10,827 9,528 (1,299)
Wages, salaries and supplementary labour income
(s.a. $ millions).......................................... June 5,881 5,842 5,868 0.4%
Average weekly wage rate .................................... Oct 671.53 645.37 665.46 3.1%
CONSUMER SECTOR
Retail sales (s.a., $ millions).............................. Sept 3,332 3,144 3,330 5.9%
Car and truck sales (s.a., units)............................ Sept 16,088 13,994 16,328 16.7%
Housing starts (all areas, s.a., annual rate)................ Oct 23,200 17,220 20,960 21.7%
Existing home sales (s.a.) .................................. Sept 6,380 5,538 6,933 25.2%
Building permits (s.a., $ millions) ......................... Sept 512 429 466 8.6%
B.C. consumer price index (annual per cent change) .......... Oct 2.5 1.9 2.1 0.2
INDUSTRIAL ACTIVITY
Foreign merchandise exports (s.a., $ millions) .............. Sept 2,440 2,675 2,367 -11.5%
Manufacturing shipments (s.a., $ millions)................... Sept 2,843 2,900 2,838 -2.1%
Lumber production (thousand cubic metres) ................... Aug 2,677 2,653 2,808 5.8%
Pulp and paper production (thousand tonnes).................. Sept 620 622 611 -1.8%
Coal production (thousand tonnes) ........................... June 2,227 2,294 2,242 -2.2%
Natural gas production (million cubic metres)................ March 2,425 2,133 2,466 15.6%
Copper production (million kg) .............................. Sept 19.5 23.2 20.3 -12.6%
TOURISM
Entries of U.S. and overseas residents (thousands)........... Aug 1,164 788 720 -8.5%
BC ferry passengers to/from Vancouver Island (thousands)..... Sept 1,003 979 975 -0.5%
COMMODITY PRICES
Lumber (US$/thousand board feet) ............................ Oct 196 254 245 -3.8%
Pulp (US $/tonne)............................................ Oct 475 557 465 -16.4%
Newsprint (US$/tonne)........................................ Oct 469 603 465 -22.9%
Copper (US$/lb.) ............................................ Oct 0.67 0.73 0.71 -3.2%
FINANCIAL DATA
Canadian dollar (US cents)................................... Oct 63.4 64.9 63.6 -1.2
Canadian prime rate (per cent) .............................. Oct 4.50 6.35 4.13 -2.22
Canadian treasury bills (per cent)........................... Oct 2.81 4.10 2.56 -1.54
Treasury bill spread -- Canada minus U.S. (per cent)......... Oct 1.22 0.39 0.88 0.49
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(1) s.a. - seasonally adjusted
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TOPIC BOX 15
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TOPIC BOX: BRITISH COLUMBIA'S ECONOMIC PERFORMANCE IN 2001
In 2001, British Columbia experienced reduced economic growth due to a
U.S.-led global recession, the negative impact on tourism of the September
11, 2001 terrorist attacks, and U.S. trade restrictions on Canadian lumber
exports. According to Statistics Canada's revised provincial economic
accounts released November 7, 2002, the British Columbia economy declined by
0.2 per cent in 2001, down from the preliminary estimate of 0.9 per cent
growth.
This downward revision is primarily due to Statistics Canada's new method of
measuring real GDP(1).
CHART 1 B.C. REAL GDP REVISIONS
Real GDP
Per cent change
[Download Table]
Previous estimate Revised estimate Revised estimate
(old method) (old method) (new method)
----------------- ---------------- ----------------
1998.................... 1.7 1.5 1.3
1999.................... 2.8 2.6 2.8
2000.................... 3.9 4.4 4.3
2001.................... 0.9 0.8 -0.2
Source: Statistics Canada
Chart 1 shows the revisions to real GDP from 1998 to 2001. Using the old
method, real GDP in 2001 was revised from 0.9 per cent to 0.8 per cent, a
relatively small change. The new method(2) of measuring real GDP resulted in
a further drop to a 0.2 per cent decline in 2001.
CHART 2 B.C. CURRENT DOLLAR GDP REVISED LEVELS
Real GDP
Per cent change
[Download Table]
Previous estimate Revised estimate Difference
----------------- ---------------- --------------
2000.................... 127.6 129.4 $1,792 million
2001.................... 130.4 130.9 $ 463 million
Source: Statistics Canada
Current dollar (nominal) GDP was also revised with 2001 growth now at 1.2 per
cent, down from an initial 2.2 per cent estimate. Nevertheless, due to a
large upward revision in 2000, the level of current dollar GDP in 2001
increased by $463 million when compared to the initial 2001 estimate.
CHART 3 PERSONAL INCOME REVISIONS
Personal income
Per cent change
[Download Table]
Previous estimate Revised estimate
----------------- ----------------
1998.................... 1.7 2.3
1999.................... 3.4 3.3
2000.................... 5.2 6.0
2001.................... 2.6 2.6
Source: Statistics Canada
Personal income growth remained unchanged at 2.6 per cent in 2001. However,
the level of personal income is higher than before due to the upward revision
in 2000. There will be further revisions to personal income by Statistics
Canada.
Statistics Canada revised their estimate of corporate profits downwards by
$400 million, resulting in a decline of 2.8 per cent from 2000.
These revisions confirm the weak economic performance in B.C. in 2001. The
weakness is also showing up in tax reports received from the Canada Customs
and Revenue Agency as they complete processing of 2001 tax returns, and which
indicate lower-than-expected personal and corporate income tax revenues for
the 2001 tax year. These are discussed in Part Two of this QUARTERLY report.
CHART 4 CORPORATE PROFITS REVISIONS
Corporate profits
Per cent change
[Download Table]
Previous estimate Revised estimate
----------------- ----------------
1998.................... -10.9 -11.5
1999.................... 23.6 24.3
2000.................... 12.7 12.9
2001.................... 1.2 -2.8
Source: Statistics Canada
----------
(1) Constant dollar or `real' GDP is a measure of the volume of goods and
services produced in the economy, and removes the effect of price
inflation. By contrast, current dollar or `nominal' GDP measures the value
of goods and service without adjustment for price changes.
(2) Statistics Canada's new method -- called the Chain Fisher method -- updates
the weights of GDP components annually rather than every four or five
years.
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SECOND QUARTERLY REPORT 2002/03
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PART TWO -- UPDATED FINANCIAL FORECAST
Second Quarterly Report 2002/03 November 28, 2002
------------------------------------------------------------------------------
OVERVIEW
TABLE 2.1 UPDATED 2002/03 FINANCIAL FORECAST
[Enlarge/Download Table]
2002/03
----------------------------------
Budget Updated Actual
Estimate Forecast Variance 2001/02(1)
-------- -------- -------- ----------
($ millions)
CONSOLIDATED REVENUE FUND (CRF)
Revenue ........................................ 22,038 21,926 (112) 23,125
Expenditure..................................... (25,556) (25,300) 256 (25,255)
------- ------- ---- -------
CRF BALANCE .................................... (3,518) (3,374) 144 (2,130)
------- ------- ---- -------
CROWN CORPORATIONS AND AGENCIES
Taxpayer-supported ............................. (206) (174) 32 (83)
Self-supported commercial ...................... 74 48 (26) (484)
------- ------- ---- -------
CROWN CORPORATION AND AGENCY NET RESULTS(2) .... (132) (126) 6 (567)
------- ------- ---- -------
Subtotal.......................................... (3,650) (3,500) 150 (2,697)
Forecast allowance ............................. (750) (500) 250 --
------- ------- ---- -------
DEFICIT BEFORE JOINT TRUSTEESHIP ................. (4,400) (4,000) 400 (2,697)
Joint trusteeship (one-time adjustment) ........ -- -- -- 1,464
------- ------- ---- -------
DEFICIT .......................................... (4,400) (4,000) 400 (1,233)
------- ------- ---- -------
------- ------- ---- -------
(1) Restated to be consistent with the presentation used in 2002/03. The
change primarily reflects the inclusion of Forest Renewal BC's revenue and
expenditures as part of the CRF. The effect of the change on the CRF is a
$163 million increase to revenue, a $342 million increase to expenditure,
and the elimination of the $256 million wind-up transfer, resulting in a
$435 million increase to the CRF negative balance. The CRF effect is
offset by a $435 million decrease in the taxpayer-supported Crown
corporation net losses. There is no change to the 2001/02 deficit from
this restatement.
(2) Net of dividend payments and contributions to the CRF.
On February 19, 2002, the government presented its 2002/03 budget and
three-year fiscal plan, setting out a strategy to build a strong and vibrant
economy and to balance the budget beginning in 2004/05. On September 13,
2002, the government issued its first QUARTERLY REPORT for 2002/03, updating
its economic and financial projections and forecasting a $4.015 billion
deficit for 2002/03. The updated 2002/03 deficit forecast now stands at $4.0
billion, $400 million lower than budget and a small improvement from the
$4.015 billion deficit forecast in September.
Consolidated revenue fund (CRF) revenue is forecast to be $112 million lower
than budget. The decrease is mainly due to lower-than-expected taxation and
natural resource revenue, partially offset by higher federal equalization
payments and higher Crown corporation contributions.
CRF spending is projected to be $256 million below budget, mainly due to
lower debt interest costs and lower employment assistance caseloads in the
Ministry of Human Resources.
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SECOND QUARTERLY REPORT 2002/03
UPDATED FINANCIAL FORECAST 17
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TABLE 2.2 SUMMARY OF UPDATES TO THE 2002/03 BUDGET
[Enlarge/Download Table]
---------------------------------------------------------------------------------------------------------------
Updated
Change Forecast
---------------------------------------------------------------------------------------------------------------
($ millions)
2002/03 DEFICIT -- FEBRUARY BUDGET........................................... (4,400)
UPDATES IN THE FIRST QUARTERLY REPORT
CONSOLIDATED REVENUE FUND (CRF) UPDATES
REVENUE
- Weaker personal income tax assessments............................... (50)
- Higher corporation income tax instalments from the
federal government and higher B.C. corporate profits in 2001....... 145
- Other taxes -- mainly property transfer tax.......................... 92
- Natural resources -- lower natural gas prices and higher impact
of softwood lumber duties.......................................... (110)
- Higher equalization entitlement, partly offset by lower CHST......... 100
- Higher BC Hydro dividend payment..................................... 59
- Other revenue changes................................................ (8) 228
----
SPENDING
- Lower interest costs mainly due to lower debt levels................. 80
- Human Resources -- lower employment assistance caseloads............. 107
- Elections BC -- lower referendum costs............................... 3 190 418
----
CROWN CORPORATION UPDATES
TAXPAYER-SUPPORTED
- BC Transportation Financing Authority -- lower interest costs........ 7
- Other changes and adjustments........................................ (9) (2)
----
SELF-SUPPORTED COMMERCIAL
- BC Hydro -- higher dividend paid to the CRF.......................... (59)
- BC Rail -- lower net income before restructuring costs............... (5)
- ICBC -- higher net income............................................ 25
- Other changes and adjustments........................................ 8 (31) (33)
---- ---- ------
2002/03 DEFICIT - FIRST QUARTERLY REPORT FORECAST (4,015)
UPDATES IN THE SECOND QUARTERLY REPORT
CONSOLIDATED REVENUE FUND (CRF) UPDATES
REVENUE
- Weaker 2001 personal income tax assessments.......................... (300)
- Weaker 2002 personal income tax base................................. (250)
- Weaker 2001 corporation income tax assessments....................... (125)
- Higher 2001 corporation income tax credits........................... (63)
- Lower corporation income tax instalments and higher B.C..............
corporation income tax credits in 2002............................. (72)
- Natural resources -- higher sales of Crown land leases and higher
forest harvest volumes............................................. 80
- Increased equalization entitlement, partly offset by lower CHST...... 400
- Other revenue changes................................................ (10) (340)
----
SPENDING
- Lower interest costs mainly due to lower debt levels................. 40
- Human Resources -- lower employment assistance caseloads............. 10
- Attorney General -- lower stumpage collected and disbursed under
the McLeod Lake Treaty............................................. 16 66 (274)
----
CROWN CORPORATION UPDATES
TAXPAYER-SUPPORTED
- BC Transportation Financing Authority -- lower interest costs........ 12
- BC Ferries -- higher net income...................................... 6
- Other changes and adjustments........................................ 16 34
----
SELF-SUPPORTED COMMERCIAL
- BC Rail -- improved net income before restructuring costs............ 3
- Other changes and adjustments........................................ 2 5 39
---- ----
FORECAST ALLOWANCE REDUCTION............................................... 250
------
2002/03 deficit -- second Quarterly Report UPDATED FORECAST.................. (4,000)
------
------
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SECOND QUARTERLY REPORT 2002/03
18 UPDATED FINANCIAL FORECAST
--------------------------------------------------------------------------------
Combined Crown corporation net results are forecast to be $6 million higher
than budget primarily reflecting a small improvement in operating results for
the Insurance Corporation of British Columbia (ICBC) and lower debt interest
costs for the BC Transportation Financing Authority (BCTFA). These gains are
partially offset by a higher dividend payment by the British Columbia Hydro
and Power Authority (BC Hydro).
The forecast allowance, originally set at $750 million in February, has been
lowered to $500 million, reflecting the risks to the bottom line over the
remaining months of the fiscal year.
The $15 million deficit improvement from the first QUARTERLY REPORT reflects
a $66 million reduction in CRF spending, a $39 million improvement in Crown
corporation net results and the $250 million reduction in the forecast
allowance. These improvements more than offset a $340 million reduction in
CRF revenues due to weaker tax assessments for the 2001 tax year (see Table
2.2).
The main risks to the fiscal outlook over the remaining months of the fiscal
year include:
o changes to the estimates of federal transfers owed to the province;
o final personal and corporation income tax assessments for 2001 (these will
not be available until late January 2003);
o the effect of the U.S. softwood lumber duties on the B.C. forest industry
and provincial stumpage revenues;
o any spending pressures beyond ministry budget limits and available funds in
the Contingencies vote;
o Crown corporation results and any changes resulting from implementation of
Core review decisions; and
o unforeseen accounting changes.
Operating results for the first six months of the 2002/03 fiscal year show a
deficit of $896 million, a $957 million improvement from budget largely due
to lower-than-expected spending of $577 million (see Appendix Table A.1).
These first-half results should not be extrapolated to compare to the
full-year forecast. While $256 million of the spending improvement is
forecast to continue through year-end, the remaining below-budget spending is
expected to be shifted into the last half of the fiscal year. As well, Crown
corporations such as BC Ferries and ICBC typically realize better financial
results during the summer months. Further details on second quarter financial
results to September 30, 2002 are provided in the appendix.
An update to the three-year fiscal plan will be provided in the February 18,
2003 budget. The updated plan will reflect a new budget
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SECOND QUARTERLY REPORT 2002/03
UPDATED FINANCIAL FORECAST 19
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economic forecast and related revenue adjustments. The updated plan will also
include any refinements to the spending plan arising from budget reviews and
the report on the 2003 budget consultation process by the Legislature's
Select Standing Committee on Finance and Government Services. As well, the
fiscal plan will be extended to include the 2005/06 fiscal year.
CONSOLIDATED REVENUE FUND REVENUE
TABLE 2.3 CONSOLIDATED REVENUE FUND -- UPDATED REVENUE FORECAST(1)
[Enlarge/Download Table]
2002/03
-------------------------------------
Budget Updated Actual
Estimate Forecast Variance(2) 2001/02(3)
-------- -------- ----------- ----------
($ millions)
TAXATION
Personal income ............................... 4,854 4,254 (600) 5,375
Corporation income ............................ 779 664 (115) 1,522
Social service ................................ 3,802 3,812 10 3,535
Other ......................................... 3,150 3,227 77 3,220
------ ------ ---- ------
12,585 11,957 (628) 13,652
NATURAL RESOURCES
Petroleum, natural gas and minerals ........... 1,370 1,352 (18) 1,352
Forests ....................................... 1,145 1,120 (25) 1,253
Columbia River Treaty ......................... 85 90 5 360
Water resources, WILDLIFE ACT and other ....... 253 261 8 287
------ ------ ---- ------
2,853 2,823 (30) 3,252
OTHER REVENUE
Medical Service Plan premiums ................. 1,299 1,327 28 955
Other ......................................... 895 851 (44) 974
------ ------ ---- ------
2,194 2,178 (16) 1,929
CONTRIBUTIONS FROM GOVERNMENT ENTERPRISES
Liquor Distribution Branch .................... 640 641 1 637
British Columbia Lottery Corporation .......... 476 485 9 449
British Columbia Hydro and Power Authority .... 283 341 58 332
Other ......................................... 21 16 (5) 19
------ ------ ---- ------
1,420 1,483 63 1,437
CONTRIBUTIONS FROM THE FEDERAL GOVERNMENT
Canada health and social transfer ............. 2,805 2,535 (270) 2,445
Equalization .................................. -- 770 770 226
Other ......................................... 181 180 (1) 184
------ ------ ---- ------
2,986 3,485 499 2,855
------ ------ ---- ------
TOTAL REVENUE..................................... 22,038 21,926 (112) 23,125
------ ------ ---- ------
------ ------ ---- ------
(1) Figures exclude dedicated revenue collected on behalf of, and transferred
to, BC Transit, BC Ferries, BC Transportation Financing Authority, Greater
Vancouver Transportation Authority (TRANSLINK), BC Oil and Gas Commission,
and Tourism BC. These revenues are included as part of the operations of
Crown corporations and agencies, with the exception of TRANSLINK and
certain other public bodies that are not part of the provincial government.
(2) 2002/03 updated forecast less 2002/03 budget.
(3) For comparative purposes, 2001/02 figures have been restated to be
consistent with the presentation used in 2002/03. The change primarily
reflects the inclusion of Forest Renewal BC's revenue in the CRF. The
effect of the change is a $163 million increase to the 2001/02 revenue.
CRF revenue is now forecast to be $112 million or 0.5 per cent lower than
budget. The decrease is mainly due to lower-than-expected
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SECOND QUARTERLY REPORT 2002/03
20 UPDATED FINANCIAL FORECAST
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taxation and natural resource revenue, partially offset by higher federal
equalization payments and higher Crown corporation contributions.
The updated revenue forecast incorporates six-month results showing revenue
$196 million above budget (see Appendix Table A.2), 2001 personal and
corporation income tax assessment information as of October 15th from the
federal government, the economic forecast from the first QUARTERLY REPORT,
updated estimates of federal transfer entitlements, and revised Crown
corporation dividend projections.
o Personal income tax - $600 million below budget due to lower-than-assumed
personal income tax assessments for 2001 based on the October 15th tax
assessment information from the federal government. The weaker 2001
personal income tax assessments result in a one-time $300 million
retroactive adjustment for the 2001/02 fiscal year and reduce this year's
revenue by an additional $300 million due to a lower base forecast for
2002/03. Final assessments for the 2001 tax year will not be available
until late January 2003.
o The reduction in personal income tax revenue is larger than anticipated at
the time of the first Quarterly Report, as assessment information received
from the federal government this fall resulted in a much weaker estimate of
2001 tax revenues.
o Corporation income tax - $115 million below budget. Lower-than-expected tax
assessments and higher tax credits for 2001 result in a $103 million
revenue reduction on account of the 2001 tax year. As well, $47 million
higher tax credits are forecast for the 2002 tax year. These revenue
reductions are partly offset by $35 million higher federal government
instalment payments in the 2002/03 fiscal year.
o Although larger than expected, the personal and corporation income tax
declines are consistent with economic conditions in 2001, as British
Columbia experienced reduced economic growth in the face of a U.S.-led
global recession, the negative impact on tourism caused by the September
11, 2001 terrorist attacks, and U.S. trade restrictions on Canadian lumber
exports.
o Other tax revenue - up $87 million mainly due to higher property transfer
tax revenue reflecting the year-to-date strength in housing sales.
o Petroleum, natural gas and minerals - $18 million below budget as the
effects of weaker-than-assumed natural gas prices are partly offset by
higher oil prices and stronger sales of Crown land leases.
o Forests - $25 million below budget mainly due to lower stumpage rates, in
part due to the impact of U.S. countervail and antidumping duties,
partially offset by higher harvest volumes.
o Contributions from Crown corporations - $63 million above budget mainly due
to a $58 million increase in the dividend payment from BC Hydro.
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SECOND QUARTERLY REPORT 2002/03
UPDATED FINANCIAL FORECAST 21
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o Federal contributions - up $499 million from budget as B.C.'s estimated
equalization entitlement of $770 million is offset by $270 million in lower
Canada health and social transfer (CHST) payments and $1 million less from
other transfer payments. The change in CHST and equalization transfer
payments is a result of the lower-than-expected personal and corporation
income tax revenues for 2001/02 and 2002/03 as well as an updated federal
forecast of B.C.'s equalization entitlement.
o Equalization revenues are dependent on B.C. economic performance as well as
activity in other provinces. Estimates are subject to ongoing revisions,
going back as many as three fiscal years. These factors combine to make
equalization a very volatile source of revenue.
REVENUE FORECAST RISKS
The main risks to the revenue forecast are due to:
o the amount of B.C.'s equalization entitlement and CHST transfer;
o personal and corporation income tax revenues for the 2001 taxation year --
two more tax assessment reports will be received from the federal
government before these are finalized;
o the effect of U.S. softwood lumber duties on stumpage revenues;
o changes in commodity prices affecting natural resource revenue; and
o economic prospects in B.C. related mainly to the strength of the U.S.
recovery and geopolitical uncertainty.
CONSOLIDATED REVENUE FUND EXPENDITURE
Overall CRF spending is projected to be $256 million or 1.0 per cent below
budget for the full year mainly due to lower debt interest costs and lower
employment assistance caseloads in the Ministry of Human Resources.
The forecast in part reflects spending trends experienced in the first half
of the year. During the six months ending September 30, spending was $577
million lower than expected reflecting below-budget spending in almost all
programs and lower debt interest costs (see Appendix Table A.3).
In many cases, program spending has been less than planned as ministries
introduce structural and program changes outlined in their service plans.
With the completion of program changes and the management of various
pressures expected later in the year, most ministries are expected to be on
budget at year-end.
Since the February 19, 2002 budget, pressures totalling $118 million have
been identified. These include $6 million being managed in the Ministry of
Forests, $24 million in the Ministry of Public Safety and Solicitor General,
and $88 million of pressures that may be funded through the Contingencies
vote.
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SECOND QUARTERLY REPORT 2002/03
22 UPDATED FINANCIAL FORECAST
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TABLE 2.4 CONSOLIDATED REVENUE FUND -- UPDATED EXPENDITURE FORECAST
[Enlarge/Download Table]
---------------------------------------------------------------------------------------------------------------------------------
2002/03
--------------------------------------------------------------
Net Pressures/
Budget Updated (Savings) Actual
Estimate Forecast Variance(1) To Be Managed 2001/02(2)
---------------------------------------------------------------------------------------------------------------------------------
($ millions)
Legislation.................................... 39 39 -- -- 38
Officers of the Legislature.................... 32 29 (3) -- 45
Office of the Premier.......................... 50 50 -- -- 54
Advanced Education............................. 1,900 1,900 -- -- 1,935
Agriculture, Food and Fisheries................ 64 64 -- -- 66
Attorney General............................... 556 540 (16) -- 541
Children and Family Development................ 1,558 1,558 -- -- 1,525
Community, Aboriginal and Women's Services..... 555 555 -- -- 518
Competition, Science and Enterprise............ 54 54 -- -- 73
Education...................................... 4,861 4,861 -- -- 4,840
Energy and Mines............................... 50 50 -- -- 67
Finance........................................ 27 27 -- -- 26
Forests........................................ 621 621 -- 6 839
Health Planning................................ 17 17 -- -- 25
Health Services................................ 10,205 10,205 -- -- 9,689
Human Resources................................ 1,789 1,672 (117) -- 1,904
Management Services............................ 48 48 -- -- 98
Provincial Revenue............................. 45 45 -- (4) 49
Public Safety and Solicitor General............ 506 506 -- 24 522
Skills Development and Labour.................. 29 29 -- -- 30
Sustainable Resource Management................ 118 118 -- -- 130
Transportation................................. 739 739 -- -- 708
Water, Land and Air Protection................. 162 162 -- -- 211
Management of Public Funds and Debt............ 920 800 (120) -- 761
BC Family Bonus................................ 91 91 -- -- 103
Government Restructuring (All Ministries)...... 230 230 -- -- 81
Contingencies (All Ministries)(3).............. 210 210 -- -- --
Other Appropriations(4)........................ 80 80 -- -- 377
------ ------ ---- -- ------
TOTAL EXPENDITURE.............................. 25,556 25,300 (256) 26 25,255
------ ------ ---- -- ------
------ ------ ---- -- ------
(1) 2002/03 updated forecast less 2002/03 budget.
(2) Figures have been restated to reflect the government organization as of
September 30, 2002. For comparative purposes, 2001/02 CRF expenditure has
been increased $342 million to include Forest Renewal BC expenditures.
(3) Contingencies charges of $181 million for 2001/02 are included in ministry
spending amounts.
(4) Other Appropriations include various boards, commissions, other votes, and
special accounts. The 2001/02 amount includes $307 million for assistance
to Skeena Cellulose Inc.
Significant changes since the February budget include:
o Attorney General - up to $16 million below budget primarily due to lower
forestry stumpage collected and distributed under the McLeod Lake Treaty
Adhesion Agreement.
o Children and Family Development - up to $37 million has been allocated from
the Contingencies vote to fund school-based programs.
o Forests - six-month spending was about 11 per cent below budget due to
slower spending in forest investment programs and lower forest fire
suppression costs. However, forest investment spending
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SECOND QUARTERLY REPORT 2002/03
UPDATED FINANCIAL FORECAST 23
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is expected to increase in the third quarter. The ministry is also managing
potential spending pressures of $6 million for costs related to the
protected area strategies, the softwood lumber dispute, and other areas.
o Health Services - spending was 2.8 per cent below budget in the first six
months mainly due to lower medical services plan claims caused by a delay
in finalizing physician negotiations, lower-than-assumed Pharmacare claims,
lower capital debt interest costs, and a delay in the start-up of other
initiatives. However the ministry is expected to be on budget at year-end.
o Human Resources - a lower-than-forecast employment assistance caseload
resulted in spending being $98 million below budget in the first six
months. Based on current and expected trends, the monthly caseload is
forecast to average about 134,000 or 8.7 per cent below budget, resulting
in lower expenditures of $117 million for the year.
o Public Safety and Solicitor General - additional pressures of up to $24
million are being managed by the ministry, primarily for the missing
persons investigation. An additional $19 million has been allocated from
the Contingencies vote for flood claims under the EMERGENCY PROGRAM ACT.
o Management of public funds and debt (operating debt interest) - costs were
$94 million below budget in the first six months and are expected to be
$120 million below budget for the full year. The improvement reflects a
lower-than-expected debt level at the end of 2001/02, the effect of a
higher-than-assumed U.S. exchange rate in the first quarter of 2002/03, and
lower borrowing requirements in the first half of the year.
Table 2.4 also shows that at the end of the second quarter, net pressures being
managed by ministries totaled $26 million. The $6 million increase from the
first quarter mainly reflects increased pressures in the Ministry of Public
Safety and Solicitor General.
As noted earlier, spending commitments and pressures totalling $88 million have
been allocated to the Contingencies vote.
TABLE 2.5 2002/03 PRESSURES ALLOCATED TO THE CONTINGENCIES VOTE
[Enlarge/Download Table]
($ millions)
------------
Contingencies allocation
Children and Family Development -- school based programs.................. 37
Energy and Mines -- energy policy and economic initiatives................ 6
Public Safety and Solicitor General -- EMERGENCY PROGRAM ACT -- floods.... 19
Transportation -- public transit -- deferred interest and start-up costs.. 26
---
Subtotal................................................................ 88
Unallocated............................................................... 122
---
TOTAL CONTINGENCIES BUDGET.............................................. 210
---
---
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SECOND QUARTERLY REPORT 2002/03
24 UPDATED FINANCIAL FORECAST
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In addition to the pressures funded for the Ministry of Children and Family
Development and the Ministry of Public Safety and Solicitor General (noted
above), significant allocations of the Contingencies vote include:
o Ministry of Energy and Mines - $6 million for additional costs relating to
the energy policy review and economic measures to stimulate activity in the
resource sector.
o Ministry of Transportation (Public Transit) - $26 million relating to the
write-off of deferred interest and start-up costs related to the Port
Moody/Coquitlam and Vancouver City College-West SkyTrain lines.
Further details on the spending forecast, assumptions and sensitivities are
provided in Appendix Table A.9.
CROWN CORPORATIONS AND AGENCIES
Combined Crown corporation net results are forecast to be $6 million higher
than budget primarily reflecting an improvement in operating results at ICBC
and lower debt interest costs for BCTFA. These gains are partially offset by
a higher dividend payment by BC Hydro.
Before payments to the CRF, net income of Crown corporations are forecast to
total $1,357 million - $1,517 million from self-supported Crown corporations
partially offset by a $160 million combined loss from taxpayer-supported
Crown corporations. This forecast is $69 million higher than budget.
SIX-MONTH RESULTS
For the first six months of the 2002/03 fiscal year, Crown corporations
reported a $184 million improvement to their operating results compared to
budget ($228 million before payments to the CRF). Most Crown corporations
posted better-than-expected results, led by $59 million of higher net income
for BC Hydro (primarily due to higher-than-expected net power exports) and a
$55 million improvement by ICBC (mainly due to higher premium revenue and
lower-than-budget operating expenses). Appendix Table A.4 provides more
details on six-month results.
The British Columbia Railway Company (BC Rail) loss of $39 million for its
January-to-September period includes restructuring costs of $65 million. As
the restructuring costs were included in the government's 2001/02 fiscal
year, they are excluded from the 2002/03 results by a $65 million offsetting
improvement in accounting adjustments. Excluding these costs, BC Rail's
results were $20 million above budget.
The above-budget six-month results do not all flow through to the full-year
forecast as BC Ferries typically realizes stronger results during the summer
months and ICBC's claims costs increase during the last quarter of each year.
As well, ICBC's year-to-date results include a one-time investment gain due
to a change in the management of its Canadian equity portfolio.
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SECOND QUARTERLY REPORT 2002/03
UPDATED FINANCIAL FORECAST 25
--------------------------------------------------------------------------------
TABLE 2.6 2002/03 CROWN CORPORATION AND AGENCY UPDATED FORECAST
[Enlarge/Download Table]
-----------------------------------------------------------------------------------------------------
2002/03
----------------------------------
Budget Updated Actual
Estimate Forecast Variance 2001/02(1)
-----------------------------------------------------------------------------------------------------
($ millions)
TAXPAYER-SUPPORTED
British Columbia Buildings Corporation........ 34 35 1 37
British Columbia Ferry Corporation............ 16 24 8 (23)
BC Transportation Financing Authority......... (56) (37) 19 --
552513 British Columbia Ltd. (2).............. -- -- -- 84
Other ........................................ 3 -- (3) (6)
LESS: Accounting adjustments (3)............ (184) (182) 2 (158)
------ ------ --- ------
TAXPAYER-SUPPORTED RESULTS BEFORE
CONTRIBUTIONS TO CRF........................ (187) (160) 27 (66)
LESS: Contributions paid to CRF............. (19) (14) 5 (17)
------ ------ --- ------
TAXPAYER-SUPPORTED NET RESULTS................ (206) (174) 32 (83)
------ ------ --- ------
SELF-SUPPORTED COMMERCIAL
British Columbia Hydro and Power Authority.... 345 415 70 403
LESS: Transfer (from) to RSA................ 5 (65) (70) (145)
------ ------ --- ------
BC Hydro operating results.................. 350 350 -- 258
Liquor Distribution Branch.................... 640 641 1 637
British Columbia Lottery Corporation.......... 660 670 10 606
British Columbia Railway Company.............. 14 (53) (67) (107)
Insurance Corporation of British Columbia..... (10) 15 25 (251)
Other......................................... 5 14 9 --
LESS: Accounting adjustments (4)............ (184) (120) 64 (207)
------ ------ --- ------
SELF-SUPPORTED COMMERCIAL RESULTS BEFORE
CONTRIBUTIONS TO CRF........................ 1,475 1,517 42 936
LESS: Contributions paid to CRF............. (1,401) (1,469) (68) (1,420)
------ ------ --- ------
SELF-SUPPORTED COMMERCIAL NET RESULTS......... 74 48 (26) (484)
------ ------ --- ------
CROWN CORPORATION AND AGENCY NET RESULTS........ (132) (126) 6 (567)
------ ------ --- ------
------ ------ --- ------
-----------------------------------------------------------------------------------------------------
(1) Restated to be consistent with the presentation used for 2002/03. The
change primarily reflects the inclusion of Forest Renewal BC's revenue and
expenditures as part of the CRF. The effect of the change is the
elimination of FRBC's $179 million loss and the $256 million wind-up
transfer to the CRF, resulting in a $435 millon decrease to the net losses
of taxpayer-supported Crown corporations.
(2) In 2001/02, includes debt assistance of $220 million and a $67 million net
write-down of 552513 British Columbia Ltd. as a result of the disposal of
Skeena Cellulose Inc.
(3) Primarily includes the amortization of the cost of highways transferred to
the BC Transportation Financing Authority in 1998/99.
(4) Primarily reflects adjustments to account for differences between the
fiscal year ends of the government and BC Rail and ICBC, and transfers of
BC Lottery revenue to charities and local governments. The 2001/02
adjustment includes $65 million of restructuring costs incurred by BC Rail
during the January -- March 2002 period because these costs were reported
in the 2001/02 fiscal year.
CROWN CORPORATIONS AND AGENCIES FORECAST
At $160 million, the 2002/03 updated forecast for total losses by
taxpayer-supported Crown corporations before contributions paid to the CRF is
a $27 million improvement over budget (see Table 2.6). The improvement mainly
reflects higher net income for BC Ferries and reduced interest costs for
BCTFA.
Self-supported commercial Crown corporations are projected to record combined
operating results of $1,517 million (before contributions paid to the CRF).
The updated forecast is a $42 million improvement compared to budgeted
operating results of $1,475 million.
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SECOND QUARTERLY REPORT 2002/03
26 UPDATED FINANCIAL FORECAST
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The forecast includes the following:
o BC Hydro's operating results (before rate stabilization transfers) remain
unchanged at $350 million. However, approval by the BC Utilities Commission
(BCUC) to use historical accounting policy for rate-setting and reporting
purposes authorized BC Hydro to reverse a $450 million reduction in equity
that was assumed in the budget as a result of a CICA accounting
pronouncement. The BCUC decision will result in a higher rate stabilization
account transfer to meet BC Hydro's allowed rate of return and a higher
dividend payment. There is no impact on the overall government bottom line
from this change.
o BC Rail's forecast loss of $53 million for its fiscal year (January to
December) includes restructuring costs of $65 million. As these costs were
included in the government's 2001/02 results, they are excluded from the
2002/03 deficit forecast by an offsetting improvement in accounting
adjustments. Excluding these costs, BC Rail's forecast net income is $2
million less than budget.
o ICBC is forecasting net income of $15 million for 2002 compared to a
budgeted $10 million loss. The improvement is due to operating cost
savings, higher premium revenue and a positive prior-year claims
adjustment, partially offset by an increase in current claims costs and
lower forecast investment income. Recent decisions affecting insurance
rates will have a minimum impact on this forecast as the rate increases
apply only to new policies issued during the remainder of this calendar
year, and to renewals starting in 2003.
o BC Lotteries, the Liquor Distribution Branch and the Columbia Power
Corporation are all forecasting higher operating income resulting in a
total bottom-line improvement of $20 million from these sources.
CROWN CORPORATION AND AGENCY FORECAST RISKS
The major Crown corporation forecast assumptions are provided in Appendix
Table A.10. The full-year forecast sensitivities for each Crown corporation
represent its ongoing business risks. In addition, government direction
subsequent to the Core review and new decisions by Crown corporation boards
of directors with respect to restructuring, valuation allowances and
disposals of business segments or assets can also affect results.
FULL-TIME EQUIVALENTS (FTEs)
Total full-time equivalent (FTE) employees of government and
taxpayer-supported Crown corporations are projected at 38,822 in 2002/03,
down 1,586 from budget (see Appendix Table A.12).
The 2002/03 full year forecast of ministry and special office FTEs is 30,300,
down 1,308 from budget and 700 FTEs lower than the updated forecast in the
first QUARTERLY REPORT. The decline reflects a higher-than-anticipated number
of voluntary departures and early retirements. At this time, ministries do
not expect any significant changes to their 2004/05 staffing level targets.
------------------------------------------------------------------------------
SECOND QUARTERLY REPORT 2002/03
UPDATED FINANCIAL FORECAST 27
------------------------------------------------------------------------------
The updated FTE forecast for taxpayer-supported Crown corporations shows a
reduction of 278 FTEs from budget compared to the first QUARTERLY REPORT
update of 300 fewer FTEs. The reduction from budget reflects accelerated
implementation of service plans, with the largest reduction in the Legal
Services Society and BC Assessment Authority. The change from the first
QUARTERLY REPORT is primarily due to the transfer of employees from the
Ministry of Finance to the recently created Partnerships BC Inc.
PROVINCIAL CAPITAL SPENDING
TABLE 2.7 CAPITAL EXPENDITURES -- UPDATED FORECAST
[Enlarge/Download Table]
---------------------------------------------------------------------------------------------------------
2002/03
-------------------------------------
Budget Updated Actual
Estimate Forecast Variance(1) 2001/02
---------------------------------------------------------------------------------------------------------
($ millions)
TAXPAYER-SUPPORTED
Education....................................... 466 402 (64) 360
Health (2)...................................... 273 173 (100) 169
BC Transportation Financing Authority........... 254 256 2 324
British Columbia Ferry Corporation.............. 103 84 (19) 57
Rapid Transit Project 2000 (2).................. 143 125 (18) 199
Government operating (ministries)............... 301 257 (44) 203
Other (3)....................................... 129 102 (27) 102
----- ----- ---- -----
TOTAL TAXPAYER-SUPPORTED........................ 1,669 1,399 (270) 1,414
----- ----- ---- -----
SELF-SUPPORTED COMMERCIAL
British Columbia Hydro and Power Authority...... 745 745 -- 545
British Columbia Railway Company................ 66 58 (8) 78
Columbia River power projects (4)............... 86 91 5 118
Insurance Corporation of British Columbia (5)... 116 109 (7) 107
British Columbia Lottery Corporation............ 26 34 8 20
Liquor Distribution Branch...................... 22 11 (11) 26
----- ----- ---- -----
TOTAL SELF-SUPPORTED COMMERCIAL................. 1,061 1,048 (13) 894
----- ----- ---- -----
TOTAL CAPITAL EXPENDITURES...................... 2,730 2,447 (283) 2,308
----- ----- ---- -----
----- ----- ---- -----
---------------------------------------------------------------------------------------------------------
(1) 2002/03 updated forecast less 2002/03 budget.
(2) Net of expenditures by hospital districts for cost-shared projects and
capital spending on behalf of, and recovered from, the Greater Vancouver
Transportation Authority (TRANSLINK).
(3) Includes BC Housing Management Commission, Provincial Rental Housing
Corporation, BC Buildings Corporation, Ministry of Attorney General,
Ministry of Public Safety and Solicitor General, Ministry of Children and
Family Development, BC Transit and the Pacific National Exhibition.
(4) Columbia Power Corporation and Columbia Basin Trust.
(5) Includes ICBC Properties Ltd.
Total capital spending(1) in 2002/03 is forecast at $2.4 billion, $283
million below budget (see Tables 2.7 and 2.8). The decrease is mainly due to
slower-than-expected spending for health, education, transportation and minor
capital purchases by ministries. The updated forecast reflects
----------
(1) Capital spending is not included in the government's annual surplus or
deficit. In accordance with generally accepted accounting principles
(GAAP), annual amortization expenses that recognize the estimated wear and
tear of capital assets during the fiscal year are included in the
government's annual expenses instead of recording the full capital costs
as they occur.
------------------------------------------------------------------------------
SECOND QUARTERLY REPORT 2002/03
28 UPDATED FINANCIAL FORECAST
------------------------------------------------------------------------------
TABLE 2.8 -- SUMMARY OF CHANGES FROM THE 2002/03 BUDGET -- CAPITAL AND DEBT
[Enlarge/Download Table]
---------------------------------------------------------------------------------------------------------
Updated
Change Forecast
---------------------------------------------------------------------------------------------------------
($ millions)
CAPITAL SPENDING -- FEBRUARY BUDGET......................................... 2,730
Taxpayer-supported........................................................ (271)
Self-supported commercial................................................. 10 (261)
---- ------
CAPITAL SPENDING -- FIRST QUARTERLY REPORT UPDATED FORECAST................. 2,469
Taxpayer-supported
Health facilities....................................................... (18)
B.C. Ferries............................................................ 10
BC Transportation Financing Authority................................... 8
Rapid Transit Project 2000.............................................. (10)
Minor capital purchases by ministries................................... (12)
Other................................................................... 23 1
----
Self-supported commercial
BC Rail................................................................. (12)
Other................................................................... (11) (23)
---- ------
CAPITAL SPENDING -- SECOND QUARTERLY REPORT UPDATED FORECAST................ 2,447
------
------
---------------------------------------------------------------------------------------------------------
PROVINCIAL DEBT AT MARCH 31, 2003 -- FEBRUARY BUDGET........................ 40,728
March 31, 2002 year-end changes between budget forecast and the
2001/02 PUBLIC ACCOUNTS
Taxpayer-supported debt................................................. (195)
Self-supported commercial............................................... (241) (436)
---- ------
ADJUSTED PROVINCIAL DEBT AT MARCH 31, 2003 -- POST PUBLIC ACCOUNTS.......... 40,292
FISCAL 2002/03 CHANGES -- FIRST QUARTERLY REPORT
Taxpayer-supported debt................................................... (796)
Self-supported commercial................................................. (347) (1,143)
---- ------
PROVINCIAL DEBT AT MARCH 31, 2003 -- FIRST QUARTERLY
REPORT UPDATED FORECAST................................................. 39,149
FISCAL 2002/03 CHANGES -- SECOND QUARTERLY REPORT
Taxpayer-supported debt
Provincial government operating:
- weaker CRF revenue.................................................. 274
- lower minor capital purchases by ministries......................... (12)
- reduced working capital needs....................................... (45)
Education facilities (higher sinking fund revenue)...................... (16)
Health facilities (mainly lower capital spending)....................... (18)
Transportation (mainly lower capital spending).......................... (14)
Other (mainly BCBC working capital requirements)........................ (13) 156
----
Self-supported commercial
BC Hydro (reduced working capital requirements)......................... (37)
BC Rail (higher cash flows)............................................. (58)
Columbia basin power projects (deferred borrowing)...................... (49)
Other................................................................... (2) (146)
----
Debt forecast allowance reduction......................................... (250)
------
PROVINCIAL DEBT AT MARCH 31, 2003 -- SECOND QUARTERLY REPORT
UPDATED FORECAST.......................................................... 38,909
------
------
---------------------------------------------------------------------------------------------------------
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SECOND QUARTERLY REPORT 2002/03
UPDATED FINANCIAL FORECAST 29
--------------------------------------------------------------------------------
spending trends experienced in the first half of the fiscal year as total
capital expenditures were $262 million below budget to the end of September.
Taxpayer-supported capital spending, which includes construction of schools,
hospitals, post-secondary and transportation projects, plus minor capital
purchases by ministries and other taxpayer-supported agencies, is forecast to
be $270 million below budget mainly due to:
o slower-than-anticipated spending on education capital projects;
o slower-than-anticipated spending on health sector restructuring projects;
o delayed and deferred implementation of some BC Ferry Corporation projects;
o a lower forecast of costs to complete SKYTRAIN'S Millennium Line; and
o slower-than-anticipated purchases of minor capital by ministries.
Self-supported commercial Crown corporation capital spending, which includes
construction on BC Hydro, BC Rail, ICBC and Columbia Basin projects, is
forecast to be $13 million below budget.
CAPITAL PROJECTS OVER $50 MILLION
Consistent with the BUDGET TRANSPARENCY AND ACCOUNTABILITY ACT, capital
projects with multi-year budgets totalling $50 million or more, are
identified individually in Appendix Table A.6. Spending on these major
projects in 2002/03 is forecast at $0.5 billion, and the cumulative total at
September 30, 2002 was $3.4 billion.
Changes since the first QUARTERLY REPORT include:
o SKYTRAIN extension (Phase 1) - the total cost of the project is forecast at
$1,117 million, down $50 million from the project budget and down $10
million from the amount reported in the first QUARTERLY REPORT. The lower
costs reflect better estimates of total costs as the project nears
completion.
o BC Hydro's Burrard power station upgrade - the revised completion date is
now June 2003 (from March 2004). The total cost is forecast to be $195
million, down $27 million from budget and $25 million lower than the first
QUARTERLY REPORT. The changes reflect a reduced scope for the project.
o BC Hydro's Seven Mile Dam safety improvements - the total cost of the
project is now forecast at $88 million, $12 million below budget and the
amount reported in the first QUARTERLY REPORT. The lower forecast reflects
the removal of a budget reserve that anticipated a larger project scope.
The reserve is no longer necessary based on work completed to date.
o Arrow Lakes Generating Station - the total project budget and forecast have
been adjusted to $284 million, up $14 million from the first QUARTERLY
REPORT. The increase reflects the adoption of an accounting policy to
capitalize a portion of the contractor's share of revenue from
------------------------------------------------------------------------------
SECOND QUARTERLY REPORT 2002/03
30 UPDATED FINANCIAL FORECAST
------------------------------------------------------------------------------
power sales resulting from early completion of generating facilities. The
revenue sharing agreement expires on December 31, 2002.
o ICBC's Surrey City Centre project - the total project budget and forecast
have been increased to $312 million, up $59 million from the amounts
reported in the first QUARTERLY REPORT. The increase reflects additional
costs required to modify space for new tenants caused by cancellation of a
lease for TechBC and a decision to lease out space previously intended for
occupancy by ICBC. The increased project costs are partially offset by a
$41 million payment related to the TechBC lease cancellation. The forecast
completion date for the base building is January 2003. However, work will
continue well beyond this date as new tenants are identified and space is
modified for their use.
PROVINCIAL DEBT
Provincial debt is forecast to increase $3.0 billion from the start of the
year, to total $38.9 billion at March 31, 2003. The forecast is $1.8 billion
lower than budget mainly due to:
o lower-than-expected debt balances at the end of the 2001/02 fiscal year;
o the improved deficit forecast for 2002/03;
o reduced capital spending for education, health, transportation, and minor
capital purchases by ministries; and
o reduced working capital requirements and improved cash flows for Crown
corporations (see Tables 2.8 and 2.9).
The total provincial debt forecast is $240 million lower than the first
QUARTERLY REPORT mainly due to:
o a $146 million decline in self-supported debt reflecting BC Rail's improved
cash flows, and deferred borrowing for Columbia basin power projects; and
o a $250 million decline in the forecast allowance mirroring a similar
reduction for the updated fiscal forecast;
partially offset by
o a $217 million increase in direct operating debt reflecting the reduced CRF
revenue forecast.
Appendix Table A.11 provides a reconciliation between the deficit forecast
and the change in total provincial debt.
Total provincial debt is forecast at 29.2 per cent of GDP at March 31, 2003,
while taxpayer-supported debt is forecast at 23.1 per cent of GDP(2). These
ratios have improved since the February budget due to lower-than-expected
debt balances at the end of 2001/02, the improved deficit forecast, reduced
working capital requirements for 2002/03, and higher nominal GDP.
----------
(2) The ratio of a province's taxpayer-supported debt relative to its GDP is a
measure of a province's ability to manage its debt load. British Columbia's
taxpayer-supported debt-to-GDP ratio is one of the lowest in Canada, and
this translates into a strong credit rating and lower debt service costs.
------------------------------------------------------------------------------
SECOND QUARTERLY REPORT 2002/03
UPDATED FINANCIAL FORECAST 31
------------------------------------------------------------------------------
TABLE 2.9 PROVINCIAL DEBT SUMMARY(1) -- UPDATED FORECAST
[Enlarge/Download Table]
------------------------------------------------------------------------------------------------------------------------
Debt Outstanding
March 31, 2003 Variance
Debt Forecast ------------------- Above/
Outstanding Net Updated Budget (Below)
March 31, 2002 + Change(2) = Forecast Estimate Budget
------------------------------------------------------------------------------------------------------------------------
TAXPAYER-SUPPORTED DEBT
Provincial government direct operating.................. 13,789 3,049 16,838 17,182 (344)
------ ------ ------ ------ ------
Education facilities
Schools............................................... 4,092 238 4,330 4,375 (45)
Post-secondary institutions........................... 1,425 89 1,514 1,637 (123)
------ ------ ------ ------ ------
5,517 327 5,844 6,012 (168)
------ ------ ------ ------ ------
Health facilities....................................... 1,920 149 2,069 2,199 (130)
------ ------ ------ ------ ------
Highways, ferries and public transit
BC Transportation Financing Authority................. 2,514 201 2,715 2,743 (28)
British Columbia Ferry Corporation.................... 19 (3) 16 72 (56)
British Columbia Transit.............................. 79 9 88 94 (6)
Public transit........................................ 936 (5) 931 937 (6)
SKYTRAIN extension.................................... 1,044 121 1,165 1,214 (49)
Rapid Transit Project 2000 Ltd........................ 47 (47) -- -- --
------ ------ ------ ------ ------
4,639 276 4,915 5,060 (145)
------ ------ ------ ------ ------
Other
British Columbia Buildings Corporation................ 596 (120) 476 538 (62)
Social housing(3)..................................... 299 (79) 220 218 2
Homeowner Protection Office........................... 113 17 130 139 (9)
Universities and colleges -- fiscal agency loans...... 114 (3) 111 113 (2)
Other(4).............................................. 188 (25) 163 140 23
------ ------ ------ ------ ------
1,310 (210) 1,100 1,148 (48)
------ ------ ------ ------ ------
TOTAL TAXPAYER-SUPPORTED DEBT............................. 27,175 3,591 30,766 31,601 (835)
------ ------ ------ ------ ------
SELF-SUPPORTED DEBT
Commercial Crown corporations and agencies
British Columbia Hydro and Power Authority............ 6,863 72 6,935 7,442 (507)
British Columbia Railway Company...................... 614 (129) 485 638 (153)
Columbia River power projects(5)...................... 120 (2) 118 285 (167)
Columbia Power Corporation............................ 64 32 96 -- 96
Liquor Distribution Branch............................ 13 (4) 9 12 (3)
------ ------ ------ ------ ------
7,674 (31) 7,643 8,377 (734)
Warehouse borrowing program............................. 1,067 (1,067) -- -- --
------ ------ ------ ------ ------
TOTAL SELF-SUPPORTED DEBT................................. 8,741 (1,098) 7,643 8,377 (734)
------ ------ ------ ------ ------
FORECAST ALLOWANCE........................................ -- 500 500 750 (250)
------ ------ ------ ------ ------
TOTAL PROVINCIAL DEBT..................................... 35,916 2,993 38,909 40,728 (1,819)
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Total provincial debt as a percent of GDP................. 29.2% 31.3% -2.1%
Taxpayer-supported debt as a percent of GDP............... 23.1% 24.3% -1.2%
Taxpayer-supported debt per capita ($).................... 7,444 7,655 (211)
------------------------------------------------------------------------------------------------------------------------
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SECOND QUARTERLY REPORT 2002/03
------------------------------------------------------------------------------
APPENDIX: FINANCIAL RESULTS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2002
Second Quarterly Report 2002/03 November 28, 2002
------------------------------------------------------------------------------
TABLE A.1 OPERATING RESULTS
TABLE A.2 CONSOLIDATED REVENUE FUND REVENUE BY SOURCE
TABLE A.3 CONSOLIDATED REVENUE FUND EXPENDITURE BY MINISTRY
TABLE A.4 CROWN CORPORATION AND AGENCY RESULTS
TABLE A.5 CAPITAL EXPENDITURES
TABLE A.6 CAPITAL EXPENDITURE PROJECTS GREATER THAN $50 MILLION
TABLE A.7 PROVINCIAL DEBT OUTSTANDING
TABLE A.8 MAIN REVENUE ASSUMPTIONS AND SENSITIVITIES --
CONSOLIDATED REVENUE FUND
TABLE A.9 MAIN EXPENDITURE ASSUMPTIONS AND SENSITIVITIES --
CONSOLIDATED REVENUE FUND
TABLE A.10 CROWN CORPORATION ASSUMPTIONS AND SENSITIVITIES
TABLE A.11 STATEMENT OF FINANCIAL POSITION
TABLE A.12 FULL-TIME EQUIVALENTS (FTEs) -- UPDATED FORECAST
------------------------------------------------------------------------------
SECOND QUARTERLY REPORT 2002/03
APPENDIX 33
------------------------------------------------------------------------------
TABLE A.1 OPERATING RESULTS
for the Six Months Ended September 30, 2002
(UNAUDITED)
[Enlarge/Download Table]
------------------------------------------------------------------------------------------------------
2002/03
--------------------------------- Actual
Budget(1) Actual Variance 2001/02(2)
------------------------------------------------------------------------------------------------------
($ millions)
CONSOLIDATED REVENUE FUND (CRF)
Revenue......................................... 10,808 11,004 196 11,290
Expenditure..................................... (12,729) (12,152) 577 (12,214)(3)
------- ------- --- -------
CRF BALANCE..................................... (1,921) (1,148) 773 (924)
------- ------- --- -------
CROWN CORPORATIONS AND AGENCIES
Taxpayer-supported.............................. (33) 38 71 122
Self-supported commercial....................... 101 214 113 155
------- ------- --- -------
CROWN CORPORATION AND AGENCY NET RESULTS........ 68 252 184 277
------- ------- --- -------
(DEFICIT) SURPLUS BEFORE JOINT TRUSTEESHIP........ (1,853) (896) 957 (647)
Joint trusteeship (one-time adjustment) ........ -- -- -- 1,464(3)
------- ------- --- -------
(DEFICIT) SURPLUS ................................ (1,853) (896) 957 817
------- ------- --- -------
------- ------- --- -------
------------------------------------------------------------------------------------------------------
(1) Figures reflect six-month allocations of the full-year budget based on
planned activities and seasonal patterns.
(2) Restated to be consistent with the presentation used in 2002/03. The
change primarily reflects the inclusion of Forest Renewal BC's revenue
and expenditures as part of the CRF. The effect of the change on the CRF
is a $31 million increase to revenue and a $116 million increase to
expenditure, resulting in an $85 million increase to the CRF negative
balance. The CRF effect is offset by an $85 million decrease in the
taxpayer-supported Crown corporation net losses. There is no change to the
2001/02 surplus from this restatement.
(3) In addition to the FRBC restatement, CRF expenditures for 2001/02 have been
increased by $30 million to reflect the reclassification of the
amortization of unfunded pension liabilities as part of joint trusteeship
which is shown as an adjustment to the summary bottom line. The joint
trusteeship adjustment for the first half of 2001/02 was also increased by
$28 million that was previously accrued in the second half of the fiscal
year. This change reflects the substance of the transaction which occurred
at the beginning of 2001/02. The total impact of these changes on the
summary bottom line is a $28 million increase to the second quarter
surplus.
------------------------------------------------------------------------------
SECOND QUARTERLY REPORT 2002/03
34 APPENDIX
--------------------------------------------------------------------------------
TABLE A.2 CONSOLIDATED REVENUE FUND REVENUE BY SOURCE (1)
for the Six Months Ended September 30, 2002
(UNAUDITED)
[Enlarge/Download Table]
---------------------------------------------------------------------------------------------------------
2002/03
----------------------------------- Actual
Budget(2) Actual Variance(3) 2001/02(4)
---------------------------------------------------------------------------------------------------------
($ millions)
TAXATION
Personal income.............................. 2,390 2,295 (95) 2,461
Corporation income........................... 441 452 11 634
Social service............................... 1,938 1,944 6 1,836
Other........................................ 1,672 1,760 88 1,691
------ ------ ---- ------
6,441 6,451 10 6,622
NATURAL RESOURCES
Petroleum, natural gas and minerals.......... 690 602 (88) 824
Forests...................................... 419 507 88 513
Columbia River Treaty........................ 43 31 (12) 313
Water resources, WILDLIFE ACT and other...... 136 128 (8) 157
------ ------ ---- ------
1,288 1,268 (20) 1,807
OTHER REVENUE
Medical Services Plan premiums............... 648 680 32 477
Other........................................ 403 411 8 454
------ ------ ---- ------
1,051 1,091 40 931
CONTRIBUTIONS FROM GOVERNMENT ENTERPRISES
Liquor Distribution Branch................... 321 336 15 320
British Columbia Lottery Corporation......... 227 256 29 214
British Columbia Hydro and Power Authority... -- -- -- --
Other........................................ -- -- -- --
------ ------ ---- ------
548 592 44 534
CONTRIBUTIONS FROM THE FEDERAL GOVERNMENT
Canada health and social transfer............ 1,402 1,298 (104) 1,323
Equalization................................. -- 226 226 --
Other........................................ 78 78 -- 73
------ ------ ---- ------
1,480 1,602 122 1,396
------ ------ ---- ------
TOTAL REVENUE.................................. 10,808 11,004 196 11,290
------ ------ ---- ------
------ ------ ---- ------
---------------------------------------------------------------------------------------------------------
(1) Figures exclude dedicated revenue collected on behalf of, and transferred
to, BC Transit, BC Ferries, BC Transportation Financing Authority, Greater
Vancouver Transportation Authority (TRANSLINK), BC Oil and Gas Commission,
Tourism BC and other entities.
(2) Figures reflect six-month allocations of the full-year budget based on
planned activity and seasonal patterns.
(3) 2002/03 actual less 2002/03 budget.
(4) For comparative purposes, the figures have been restated to be consistent
with the presentation used in 2002/03. The change primarily reflects the
inclusion of Forest Renewal BC's revenue in the CRF. The effect of the
change is a $31 million increase to the 2001/02 revenue.
------------------------------------------------------------------------------
SECOND QUARTERLY REPORT 2002/03
APPENDIX 35
------------------------------------------------------------------------------
TABLE A.3 CONSOLIDATED REVENUE FUND EXPENDITURE BY MINISTRY
for the Six Months Ended September 30, 2002
(UNAUDITED)
[Enlarge/Download Table]
---------------------------------------------------------------------------------------------------------
2002/03
----------------------------------- Actual
Budget(1) Actual Variance(2) 2001/02(3)
---------------------------------------------------------------------------------------------------------
($ millions)
Legislation.................................... 20 18 (2) 18
Officers of the Legislature.................... 18 13 (5) 30
Office of the Premier.......................... 24 16 (8) 27
Advanced Education............................. 913 901 (12) 909
Agriculture, Food and Fisheries................ 41 37 (4) 30
Attorney General............................... 266 246 (20) 256
Children and Family Development................ 782 755 (27) 710
Community, Aboriginal and Women's Services..... 260 236 (24) 256
Competition, Science and Enterprise............ 24 23 (1) 34
Education...................................... 2,538 2,514 (24) 2,434
Energy and Mines............................... 26 25 (1) 28
Finance........................................ 13 11 (2) 10
Forests........................................ 326 290 (36) 385
Health Planning................................ 8 8 -- 12
Health Services................................ 5,121 4,976 (145) 4,704
Human Resources................................ 910 812 (98) 927
Management Services............................ 25 24 (1) 29
Provincial Revenue............................. 23 14 (9) 20
Public Safety and Solicitor General............ 253 252 (1) 239
Skills Development and Labour.................. 13 12 (1) 14
Sustainable Resource Management................ 53 51 (2) 73
Transportation................................. 367 352 (15) 336
Water, Land and Air Protection................. 79 67 (12) 110
Management of Public Funds and Debt............ 446 352 (94) 393
BC Family Bonus................................ 46 50 4 60
Government Restructuring (All Ministries)...... 97 65 (32) --
Other Appropriations (4)....................... 37 32 (5) 170
------ ------ ---- ------
TOTAL EXPENDITURE.............................. 12,729 12,152 (577) 12,214
------ ------ ---- ------
------ ------ ---- ------
---------------------------------------------------------------------------------------------------------
(1) Figures reflect six-month allocations of the full-year budget based on
planned activities and seasonal patterns.
(2) 2002/03 actual less 2002/03 budget.
(3) Figures have been restated to reflect the government organization as of
September 30, 2002. For comparative purposes, 2001/02 expenditure has been
increased $116 million to include Forest Renewal BC expenditures, and $30
million to reflect the reclassification of the amortization of unfunded
pension liabilities as part of joint trusteeship which is shown as an
adjustment to the summary accounts bottom line.
(4) Other Appropriations include the Contingencies (All Ministries) and New
Programs Vote, the Commissions on Collection of Public Funds and Allowance
for Doubtful Accounts Vote, the Environmental Assessment Office Vote, the
Environmental Boards and Forest Appeals Commission Vote, the Forest
Practices Board Vote, the Public Sector Employers' Council Vote, Seismic
Mitigation Vote, the Insurance and Risk Management Special Account, the
Unclaimed Property Special Account, and other appropriations. Charges to
the Contingencies vote have been allocated to individual ministry
spending. The 2001/02 amount includes $124 million for assistance to
Skeena Cellulose Inc.
------------------------------------------------------------------------------
SECOND QUARTERLY REPORT 2002/03
36 APPENDIX
------------------------------------------------------------------------------
TABLE A.4 CROWN CORPORATION AND AGENCY RESULTS
for the Six Months Ended September 30, 2002
(UNAUDITED)
[Enlarge/Download Table]
--------------------------------------------------------------------------------------------------------------
2002/03
--------------------------------- Actual
Budget(1) Actual Variance 2001/02(2)
--------------------------------------------------------------------------------------------------------------
($ millions)
TAXPAYER-SUPPORTED
British Columbia Buildings Corporation................... 17 26 9 21
British Columbia Ferry Corporation....................... 53 63 10 56
BC Transportation Financing Authority.................... (25) (4) 21 31
552513 British Columbia Ltd (Skeena Cellulose) (3)....... -- -- -- 65
Other.................................................... 44 59 15 85
LESS: Accounting adjustments (4)....................... (122) (106) 16 (136)
---- ---- --- ----
TAXPAYER-SUPPORTED NET RESULTS........................... (33) 38 71 122
---- ---- --- ----
SELF-SUPPORTED COMMERCIAL
British Columbia Hydro and Power Authority............... 82 141 59 164
Liquor Distribution Branch............................... 321 336 15 320
British Columbia Lottery Corporation..................... 324 340 16 289
British Columbia Railway Company......................... 6 (39) (45) (5)
Insurance Corporation of British Columbia................ (31) 24 55 (38)
Other.................................................... 3 7 4 3
LESS: Accounting adjustments (5)....................... (56) (3) 53 (44)
---- ---- --- ----
SELF-SUPPORTED COMMERCIAL CROWN CORPORATION RESULTS
BEFORE CONTRIBUTIONS TO CRF........................... 649 806 157 689
LESS: Contributions paid to CRF........................ (548) (592) (44) (534)
---- ---- --- ----
SELF-SUPPORTED COMMERCIAL NET RESULTS.................... 101 214 113 155
---- ---- --- ----
CROWN CORPORATION AND AGENCY NET RESULTS................... 68 252 184 277
---- ---- --- ----
---- ---- --- ----
--------------------------------------------------------------------------------------------------------------
(1) Figures reflect six-month allocations of the full-year budget based on
planned activities and seasonal patterns.
(2) Restated to be consistent with the presentation used in 2002/03. The change
primarily reflects the inclusion of Forest Renewal BC's revenue and
expenditures as part of the CRF. The effect of the change is the
elimination of FRBC's $85 million loss, resulting in a positive impact on
the net results of taxpayer-supported Crown corporations.
(3) In 2001/02, includes debt assistance of $88 million.
(4) Primarily includes the amortization of the cost of highways transferred to
the BC Transportation Financing Authority in 1998/99.
(5) Primarily reflects adjustments to account for differences between the
fiscal year-ends of the government and BC Rail and ICBC, and transfers of
BC Lottery revenue to charities and local governments. The 2002/03
adjustment includes a reversal of $65 million in additional restructuring
costs incurred by BC Rail during the January -- March 2002 period because
these costs were included in the 2001/02 summary accounts results.
------------------------------------------------------------------------------
SECOND QUARTERLY REPORT 2002/03
APPENDIX 37
--------------------------------------------------------------------------------
TABLE A.5 CAPITAL EXPENDITURES
for the Six Months Ended September 30, 2002
(UNAUDITED)
--------------------------------------------------------------------------------
[Enlarge/Download Table]
2002/03
---------------------------------------- Actual
Budget(1) Actual Variance(2) 2001/02
---------------------------------------------------------------------------------------------------------------
TAXPAYER-SUPPORTED
Education ......................................... 199 160 (39) 159
Health(3) ......................................... 56 56 -- 74
BC Transportation Financing Authority ............. 191 169 (22) 248
British Columbia Ferry Corporation ................ 51 20 (31) 17
Rapid Transit Project 2000(3) ..................... 58 24 (34) 126
Government operating (ministries) ................. 99 43 (56) 31
Other(4) .......................................... 59 27 (32) 58
---------- ------ ------------ -------
TOTAL TAXPAYER-SUPPORTED .......................... 713 499 (214) 713
---------- ------ ------------ -------
SELF-SUPPORTED COMMERCIAL
British Columbia Hydro and Power Authority ........ 358 357 (1) 224
British Columbia Railway Company .................. 33 28 (5) 45(5)
Columbia River power projects(6) .................. 20 13 (7) 87
Insurance Corporation of British Columbia(7) ...... 62 33 (29) 40
British Columbia Lottery Corporation .............. 13 18 5 7
Liquor Distribution Branch ........................ 14 3 (11) 13
---------- ------ ------------ -------
TOTAL SELF-SUPPORTED COMMERCIAL ................... 500 452 (48) 416
---------- ------ ------------ -------
TOTAL CAPITAL EXPENDITURES ........................ 1,213 951 (262) 1,129
========== ====== ============ =======
(1) Reflects six-month allocations of the full-year budget based on planned
activities and seasonal patterns.
(2) 2002/03 actual less 2002/03 budget.
(3) Net of expenditures by hospital districts for cost-shared projects and
capital spending on behalf of, and recovered from, the Greater Vancouver
Transportation Authority (TRANSLINK).
(4) Includes BC Housing Management Commission, Provincial Rental Housing
Corporation, BC Buildings Corporation, Ministry of Attorney General,
Ministry of Public Safety and Solicitor General, Ministry of Children and
Family Development, BC Transit and the Pacific National Exhibition.
(5) Restated to reflect consolidated capital spending of the BCR Group of
Companies.
(6) Columbia Power Corporation and Columbia Basin Trust.
(7) Includes ICBC Properties Ltd.
--------------------------------------------------------------------------------
SECOND QUARTERLY REPORT 2002/03
38 APPENDIX
--------------------------------------------------------------------------------
TABLE A.6 CAPITAL EXPENDITURE PROJECTS GREATER THAN $50 MILLION
NOTE: INFORMATION IN BOLD TYPE DENOTES CHANGES FROM THE FIRST QUARTERLY REPORT
RELEASED ON SEPTEMBER 13, 2002.
--------------------------------------------------------------------------------
[Enlarge/Download Table]
Estimated Estimated
Forecast Cumulative Spending Cumulative Total Total
Start Completion Spending at April 1 to Spending at Project Project
Project Date Date Mar. 31, Sept. 30 = Sept. 30, Budget(2) Forecast(2)
2002(1)+ 2002
---------------------------------------------------------------------------------------------------------------------------------
$ millions
ADVANCED EDUCATION FACILITIES
UBC - Life Sciences Centre ............ Apr. 2002 Sept. 2004 -- 4 4 110 110
---------------------------------------------------------------------------------------------------------------------------------
HEALTH FACILITIES
Vancouver General Hospital,
Jim Pattison Pavilion ............. Sept. 2000 Jan. 2005(3) 36 11 47 156 156
Prince George Regional Hospital ..... Spring 2001 Mar. 2004 20 6 26 50 50
Fraser Valley Health
Centre/Eastern Fraser Valley
Cancer Clinic...................... April 2001 Mar. 2007 1 3 4 211 211
---------- ------ ------- -------- -------
Total health facilities ........... 57 20 77 417 417
---------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION
Vancouver Island Highway .............. 1991 Dec. 2002 1,253 10 1,263 1,294(4) 1,278
Trans Canada Highway
- 5 Mile (Yoho) Bridge .............. May 1999 Oct. 2005 11 5 16 38(4) 38(4)
Nisga'a Highway ....................... Aug. 1998 Fall 2005 18 6 24 52 52
SKYTRAIN Extension - Phase 1 .......... Sept. 1998 Dec. 2002 1,007 33 1,040 1,167 1,117
SKYTRAIN Systems Upgrades(5) .......... Oct. 1999 Dec. 2002 74 5 79 94 87
SKYTRAIN Fleet Expansion(5) ........... Oct. 1998 Mar. 2003 65 -- 65 68 68
----------- ------ ------- -------- -------
Total transportation ................ 2,428 59 2,487 2,713 2,640
---------------------------------------------------------------------------------------------------------------------------------
POWER GENERATION
British Columbia Hydro and
Power Authority
- Burrard Upgrade (including
6 selective catalytic reduction
systems)(6) ....................... June 1993 June 2003 177 7 184 222 195
- Georgia Strait Pipeline Crossing(7) . April 2000(8) Oct. 2004 18 5 23 131 170
- Vancouver Island Generation Project . April 2000(8) Nov. 2004 24 38 62 370(9) 370(9)
- Addition of Fourth Generating Unit
at Seven Mile Dam ................. Feb. 1995 Mar. 2003 41 24 65 97 93
- Seven Mile Dam safety improvements .. June 1999 Mar. 2005 11 5 16 100 88
Arrow Lakes Power Company(10)
- Arrow Lakes Generating Station ...... Feb. 1999 Dec. 2002 260 11 271 284 284
----------- ------ ------- -------- -------
Total power generation .............. 531 90 621 1,204 1,200
---------------------------------------------------------------------------------------------------------------------------------
OTHER
ICBC Properties Ltd.
- Surrey City Centre .................. Sept. 1999 Jan. 2003(11) 169 30 199 312(12) 312(12)
---------------------------------------------------------------------------------------------------------------------------------
(1) Total expenditures since commencement of each project.
(2) Represents sum of annual budgeted expenditures to complete each project.
(3) Individual components were completed starting in December 2000 and will
continue to be completed before the end of the overall project.
(4) Amount represents the provincial portion of this cost-shared project with
the federal government. Total project budget is $61 million.
(5) Funds for these projects are fully recovered from the Greater Vancouver
Transportation Authority (TRANSLINK).
(6) Burrard generating station upgrade includes installation of Selective
Catalytic Reduction (SCRs) systems on all 6 generating units. SCRs reduce
emissions from the units and are required to meet the air quality standards
for the Greater Vancouver Regional District.
(7) Project co-sponsored with a private sector company. The amounts shown
represent BC Hydro's 50 per cent share of the costs; however, only partial
funding has been approved to date.
(8) Initial planning, preliminary field work and engineering design costs.
Physical construction will begin at a later date.
(9) In May 2002, a proposed private sector partnership to develop this project
was terminated. The total budget and revised forecast amounts have been
increased to reflect BC Hydro's 100 per cent ownership of the project.
(10) A joint venture of the Columbia Power Corporation and the Columbia Basin
Trust.
(11) The base building is forecast to be completed in January 2003; however,
work to prepare space for new tenants will extend well beyond this date.
(12) The increase reflects additional costs required to modify space for new
tenants caused by cancellation of a lease for TechBC and a decision to
lease out space previously intended for occupancy by ICBC. The higher costs
are partially offset by a $41 million payment related to the TechBC lease
cancellation.
--------------------------------------------------------------------------------
SECOND QUARTERLY REPORT 2002/03
APPENDIX 39
--------------------------------------------------------------------------------
TABLE A.7 PROVINCIAL DEBT(1) OUTSTANDING
For the Six Months Ended September 30, 2002
(UNAUDITED)
--------------------------------------------------------------------------------
[Enlarge/Download Table]
Debt Outstanding
Debt September 30, 2002 Variance Debt
Outstanding Net -------------------- Above/(Below) Outstanding
March 31, Change(2) = Actual Budget(3) Budget Sept. 30,
2002 + 2001(4)
-----------------------------------------------------------------------------------------------------------------------------------
($ millions)
TAXPAYER-SUPPORTED DEBT
Provincial government direct operating .. 13,789 822 14,611 15,049 (438) 12,062
-------- ------ -------- -------- ------- --------
Education facilities
Schools ............................... 4,092 90 4,162 4,244 (62) 3,980
Post-secondary institutions ........... 1,425 14 1,439 1,532 (93) 1,424
-------- ------ -------- -------- ------- --------
5,517 104 5,621 5,776 (155) 5,404
-------- ------ -------- -------- ------- --------
Health facilities .......................... 1,920 41 1,961 2,014 (53) 1,840
-------- ------ -------- -------- ------- --------
Highways, ferries and public transit
BC Transportation Financing Authority ... 2,514 63 2,577 2,651 (74) 2,336
British Columbia Ferry Corporation ...... 19 (2) 17 32 (15) 20
British Columbia Transit ................ 79 3 82 89 (7) 73
Public transit .......................... 936 (1) 935 939 (4) 939
SKYTRAIN extension ...................... 1,044 38 1,082 1,129 (47) 965
Rapid Transit Project 2000 Ltd. ......... 47 (36) 11 -- 11 120
-------- ------ -------- -------- ------- --------
4,639 65 4,704 4,840 (136) 4,453
-------- ------ -------- -------- ------- --------
Other
British Columbia Buildings Corporation .. 596 (128) 468 559 (91) 544
552513 British Columbia Ltd.
(Skeena Cellulose Inc.) ............... -- -- -- -- -- 230
Social housing(5) ....................... 299 (69) 230 234 (4) 267
Homeowner Protection Office ............. 113 4 117 126 (9) 95
Universities and colleges
- fiscal agency loans ................. 114 (5) 109 114 (5) 118
Other(6) ................................ 188 (24) 164 158 6 231
-------- ------ -------- -------- ------- --------
1,310 (222) 1,088 1,191 (103) 1,485
-------- ------ -------- -------- ------- --------
TOTAL TAXPAYER-SUPPORTED DEBT ................. 27,175 810 27,985 28,870 (885) 25,244
-------- ------ -------- -------- ------- --------
SELF-SUPPORTED DEBT
Commercial Crown corporations and agencies
British Columbia Hydro and Power
Authority ............................. 6,863 486 7,349 7,562 (213) 6,846
British Columbia Railway Company ........ 614 (6) 608 637 (29) 622
Columbia River power projects(7) ........ 120 (1) 119 286 (167) 120
Columbia Power Corporation .............. 64 (31) 33 -- 33 45
Liquor Distribution Branch .............. 13 -- 13 12 1 2
-------- ------ -------- -------- ------- --------
7,674 448 8,122 8,497 (375) 7,635
Warehouse borrowing program ................ 1,067 139 1,206 901 305 2,646
-------- ------ -------- -------- ------- --------
TOTAL SELF-SUPPORTED DEBT ..................... 8,741 587 9,328 9,398 (70) 10,281
-------- ------ -------- -------- ------- --------
TOTAL PROVINCIAL DEBT ......................... 35,916 1,397 37,313 38,268 (955) 35,525
======== ====== ======== ======== ======= ========
-----------------------------------------------------------------------------------------------------------------------------------
(1) Debt includes provincial government direct debt, fiscal agency loans, other
debt that has been guaranteed by the provincial government, and certain
other debt that is not provincially guaranteed.
(2) Gross new long-term borrowing plus net change in short-term debt
outstanding, less sinking fund contributions, sinking fund earnings and net
maturities of long-term debt (after deduction of sinking fund balances for
maturing issues).
(3) Reflects six-month allocation of the full-year budget based on planned
activities and seasonal patterns.
(4) Restated to include vehicle lease obligations of $45 million.
(5) Includes the BC Housing Management Commission and the Provincial Rental
Housing Corporation.
(6) Includes student assistance loans.
(7) Includes joint ventures of the Columbia Power Corporation and the Columbia
Basin Trust.
--------------------------------------------------------------------------------
SECOND QUARTERLY REPORT 2002/03
40 APPENDIX
--------------------------------------------------------------------------------
TABLE A.8 MAIN REVENUE ASSUMPTIONS AND SENSITIVITIES
- CONSOLIDATED REVENUE FUND
[Enlarge/Download Table]
-----------------------------------------------------------------------------------------------------------------------------
2002/03
-------------------------------
REVENUE SOURCE AND ASSUMPTIONS BUDGET UPDATED 2002/03 FULL-YEAR SENSITIVITIES
($ MILLIONS) ESTIMATE FORECAST AND FORECAST DETAILS
-------------------------------
($ MILLIONS)
-----------------------------------------------------------------------------------------------------------------------------
PERSONAL INCOME TAX $4,854 $4,254
B.C. personal income growth 2.0% 2.4% +/-1% change in 2002 B.C. personal income
B.C. tax base growth 2.5% 2.9% equals +/-$50 to $100 million.
Includes Budget 2002 measures:
Increase the sales tax credit -$20 -$20
Increase disability tax credits -$4 -$4
B.C. Family bonus adjustments $3 $3
Prior-year assessments:
2001 tax-year entitlement ($ millions) $5,398 $5,169
2001 personal income growth 2.2% 2.6% +/-0.01% change in 2001 effective yield equals
2001 tax-base growth 2.2% 1.8% +/-$90 million one-time and +/-$90 million
revenue base change.
A correction of a recent federal error in the calculation of personal income tax
remittances to B.C. has been factored into the revenue forecast for 2002/03 and
onwards. The federal government has recently forgiven the potential liability
for the 1997 to 1999 tax years.
-----------------------------------------------------------------------------------------------------------------------------
CORPORATION INCOME TAX $779 $664
National tax base growth -10.0% -3.0% +/-1% change in the 2002 national tax base equals
+/-$10 to $15 million.
B.C. corporate profit growth - 2001 -15.0% -2.8% +/-1% change in the 2001 B.C. tax base equals
+/-$10 to $15 million.
Instalments from the federal government
National tax base ($ billions) $105.2 $107.6
B.C. instalment share 9.5% 9.5%
Revenue ($ millions)
Gross advances $1,030 $1,065
Less credits for 2002 tax year -$99 -$146 Higher credits reflecting 2001 tax assessments.
Prior-year adjustment -$152 -$255
Adjustment for 2001 and prior years
2001 BC tax base ($ billions) $9.3 $9.7
Small business share of tax base 34% 40%
Revenue for 2001 and prior years ($ millions) Revenue forecast for 2001 and prior years is based on
Gross tax revenue $1,149 $1,138 tax assessment information as of October 15, 2002
Less credits for 2001 tax year -$98 -$165 provided by the federal government.
Revenue for 2000 and prior years $75 $50
Revenue is recorded on a cash basis. Due to lags in the federal collections and
instalment systems, changes to the B.C. corporate profits and tax base forecasts
affect revenue mainly in the succeeding year. For example, 2002/03 instalments
from the federal government are based on B.C.'s share of the national tax base
for the 2000 tax-year (assessed as of December 31, 2001) and the federal
government's forecast of the 2002 national tax base. Final payments for the year
are adjusted to reflect 2001 assessments for B.C. (assessed as of December 31,
2002).
-----------------------------------------------------------------------------------------------------------------------------
SOCIAL SERVICES TAX $3,802 $3,812
Consumer expenditure growth 3.2% 4.6% +/-1% change equals up to +/-$30 million.
Machinery and equipment 2.3% 0.0% +/-1% change equals up to +/-$10 million.
spending growth
Other final demand n.a. -0.7% +/-1% change in other expenditures equals up to
+/-$20 million.
Includes Budget 2002 measures:
Various exemptions / refunds -$17 -$19
General rate increased to 7.5% +$250 +$250
-----------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECOND QUARTERLY REPORT 2002/03
APPENDIX 41
--------------------------------------------------------------------------------
TABLE A.8 MAIN REVENUE ASSUMPTIONS AND SENSITIVITIES
- CONSOLIDATED REVENUE FUND
[Enlarge/Download Table]
-----------------------------------------------------------------------------------------------------------------------------
2002/03
-------------------------------
REVENUE SOURCE AND ASSUMPTIONS BUDGET UPDATED 2002/03 FULL-YEAR SENSITIVITIES
($ MILLIONS) ESTIMATE FORECAST AND FORECAST DETAILS
-------------------------------
($ MILLIONS)
-----------------------------------------------------------------------------------------------------------------------------
PETROLEUM, NATURAL GAS AND MINERALS $1,370 $1,352
Natural gas price ($Cdn/gigajoule) $3.65 $3.45 +/-$.50 change in the natural gas price equals
+/-$125 to $175 million.
Natural gas volumes (annual per cent 3.8% 1.9% +/-1% change in natural gas volumes equals
change) +/-$5 to $15 million.
Auctioned land base (000 hectares) 653 780 +/-5% change in price or volume of land sales equals
+/-$13 million.
Average bid price/hectare ($) $375 $325
-----------------------------------------------------------------------------------------------------------------------------
FORESTS $1,145 $1,120
SPF 2x4 price ($US/1000 bd ft. $250 $237 +/-US$50 change in SPF price equals +/-$125 to
calendar year average) $150 million.
Hemlock price ($US/1000 bd ft. $600 $600 +/-US$100 change in hemlock price equals +/-$15 to
calendar year average) $25 million.
Pulp price ($US/tonne, calendar year $500 $467 +/-US$50 change in pulp price equals +/-$10 to
average) $15 million.
Interior Crown harvest volumes 44.0 46.0 +/-10% change in Interior harvest volumes equals
+/-$60 (million cubic metres) to $100 million.
Coastal Crown harvest volumes 14.0 13.0 +/-10% change in Coastal harvest volumes equals +/-$20
(million cubic metres) to $30 million.
Countervail and anti-dumping duties have the effect of reducing the industrial
producer price indices published by Statistics Canada by an assumed 15 per cent,
resulting in lower stumpage rates.
-----------------------------------------------------------------------------------------------------------------------------
CONTRIBUTIONS FROM GOVERNMENT $1,420 $1,483 See Table A.10 for assumptions and sensitivities for the
ENTERPRISES -- BASED ON BUSINESS Crown corporations.
SERVICE PLANS
-----------------------------------------------------------------------------------------------------------------------------
CANADA HEALTH AND SOCIAL TRANSFER $2,805 $2,535
(CHST)
EQUALIZATION $0 $770
National CHST cash ($ billion) $18.6 $18.6 Due to the interactions between the CHST and
Equalization programs, the sensitivities reflect the
National tax points ($ billion) $16.4 $16.8 combined fiscal effect on both revenue sources.
B.C. entitlment (share of national 13.1% 13.2% +/-0.1% change in B.C.'s population share equals +/-$15
population) to $20 million.
B.C. tax point offset ($ billion) -$1.8 -$1.6 1% increase (decrease) in B.C. basic federal tax
(BFT) and no change in other provincial/territorial BFT
decreases (increases) revenue by $40 to $60 million.
Associated equalization tax point -- -$0.3 1% change in national BFT and no change in
offset ($ billion) B.C. BFT equals +/-$15 to $85 million.
-----------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECOND QUARTERLY REPORT 2002/03
42 APPENDIX
--------------------------------------------------------------------------------
TABLE A.9 MAIN EXPENDITURE ASSUMPTIONS AND SENSITIVITIES
- CONSOLIDATED REVENUE FUND
[Enlarge/Download Table]
-----------------------------------------------------------------------------------------------------------------------------
2002/03
-------------------------------
MINISTRY PROGRAMS AND ASSUMPTIONS BUDGET UPDATED 2002/03 FULL-YEAR SENSITIVITIES
ESTIMATE FORECAST AND FORECAST DETAILS
-------------------------------
($ MILLIONS)
-----------------------------------------------------------------------------------------------------------------------------
ADVANCED EDUCATION $1,900 UNCHANGED
Student spaces - (# of FTEs) 157,500 Unchanged The number of student spaces may vary depending on the
financial and other policies adopted by post-secondary
institutions.
Debt Service costs $145 Unchanged A 1% change in interest rates affects annual debt service
costs by approximately $1.8 million.
Student Loans Authorized $143 Unchanged A 1% change in interest rates affects annual costs by
approximately $3.6 million.
Loans and Grants - volume (#) 71,740 Unchanged A 1% change in demand affects costs by $1.4 million.
-----------------------------------------------------------------------------------------------------------------------------
ATTORNEY GENERAL $556 $540
Criminal caseload - volume (#) 125,000 Unchanged A 10% change in criminal caseload level affects
costs by approximately $9 million annually.
Civil Court hours - volume (#) 72,900 Unchanged A 10% change in the number of civil court hours affects
costs by approximately $5 million annually.
Court locations (#) 74 locations Unchanged In seven locations where courthouses were to have been
43 staffed closed, circuit courts have been established.
31 unstaffed Negotiations with other locations requesting circuit
courts are on-going.
Treaty Negotiations Office $51 $35 Mainly due to lower forestry stumpage collected
and disbursed under the McLeod Lake Treaty Adhesion
Agreement.
Statutory Services - CROWN
PROCEEDING ACT $30 Unchanged Actual annual expenditures vary with the volume/size
of claims and timing of settlements. Over the past ten
years, the annual cost of settlements has varied from
$2 million to $81 million.
-----------------------------------------------------------------------------------------------------------------------------
CHILDREN AND FAMILY DEVELOPMENT $1,558 UNCHANGED
Children-in-care caseload (#) 9,700 Unchanged A 5% change in caseload affects annual costs by
approximately $10 to $13 million.
Community Living Services caseload (#) 8,850 Unchanged A 5% change in caseload affects annual costs by
approximately $22 to $26 million.
-----------------------------------------------------------------------------------------------------------------------------
COMMUNITY, ABORIGINAL AND WOMEN'S
SERVICES $555 UNCHANGED
2010 Winter Olympics Bid $2 Unchanged In June, the federal and provincial governments
announced that they would cost-share on a 50:50 basis,
venues costs of $620 million, if Canada is chosen to
host the games. A decision on the winning bid will be
made in July 2003. No funding for hosting the Games or
for related infrastructure has been included in
the budget.
-----------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECOND QUARTERLY REPORT 2002/03
APPENDIX 43
--------------------------------------------------------------------------------
TABLE A.9 MAIN EXPENDITURE ASSUMPTIONS AND SENSITIVITIES
- CONSOLIDATED REVENUE FUND
[Enlarge/Download Table]
-----------------------------------------------------------------------------------------------------------------------------
2002/03
-------------------------------
MINISTRY PROGRAMS AND ASSUMPTIONS BUDGET UPDATED 2002/03 FULL-YEAR SENSITIVITIES
ESTIMATE FORECAST AND FORECAST DETAILS
-------------------------------
($ MILLIONS)
-----------------------------------------------------------------------------------------------------------------------------
EDUCATION $4,861 UNCHANGED
Student Enrolment (# of FTEs) 592,000 Unchanged
Class Size - Kindergarten 19 district Unchanged A 1% change in enrolment affects annual costs by
average approximately $32 million.
Class Size - Grades 1-3 21 district Unchanged A one-student per class change in K-12 affects annual
average costs by approximately $60 million.
Class Size - Grades 4-12 30 district Unchanged
average
Debt Service Costs $363 Unchanged A 1% increase in interest rates affects annual debt
service costs by $7 million.
-----------------------------------------------------------------------------------------------------------------------------
ENERGY AND MINES $50 UNCHANGED
Vancouver Island gas pipeline and the $21 Unchanged Each $1 Cdn per GJ change in the average natural
Squamish Rate Stabilization Facility gas price for the fiscal year affects annual costs by
$6 million. At current gas price forecasts, it is
unlikely that costs will exceed the budget estimate
in 2002/03.
-----------------------------------------------------------------------------------------------------------------------------
FORESTS $621 UNCHANGED
Direct Fire Fighting $55 $43 The budget provides funding based on a historical
median fire year and assumes implementation of a
cost-shared fire protection model.
Drier than normal weather, particularly in the Interior,
would likely affect costs. The annual cost of fighting
forest fires has varied from $19 million to $154 million.
B.C. experienced normal weather patterns in the first
quarter and was able to deploy firefighters to help
Oregon and California fight the Biscuit fire. The
ministry is expecting savings of $12 million due to
the low fire season in B.C., but it is also managing
pressures in other areas.
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SECOND QUARTERLY REPORT 2002/03
44 APPENDIX
--------------------------------------------------------------------------------
TABLE A.9 MAIN EXPENDITURE ASSUMPTIONS AND SENSITIVITIES
- CONSOLIDATED REVENUE FUND
[Enlarge/Download Table]
-----------------------------------------------------------------------------------------------------------------------------
2002/03
-------------------------------
MINISTRY PROGRAMS AND ASSUMPTIONS BUDGET UPDATED 2002/03 FULL-YEAR SENSITIVITIES
ESTIMATE FORECAST AND FORECAST DETAILS
-------------------------------
($ MILLIONS)
-----------------------------------------------------------------------------------------------------------------------------
HEALTH SERVICES $10,205 UNCHANGED
PHARMACARE $718 Unchanged
Demand/cost growth 15.0% Unchanged An 11% change in utilization affects costs by
(per cent change) approximately $70 million; a 4% change in drug prices
affects costs by approximately $25 million.
MEDICAL SERVICES PLAN (MSP) $2,518 Unchanged
Population/demographic growth in 1.6% Unchanged A 2% change in the volume of services provided by
physician costs (per cent change) fee-for-service physicians affects MSP costs by
approximately $38 million.
Arbitration of Working Agreement Unchanged The Working Agreement has been finalized.
with physicians
Supplementary Benefits Unchanged A 1% change in the average number of supplementary
services per beneficiary affects MSP costs by
approximately $0.5 million.
REGIONAL HEALTH SECTOR $6,337 Unchanged A 1% change in population affects annual costs by
Anticipated service changes include: approximately $60 million.
Acute inpatient and day surgery cases (#) 615,000 Unchanged
Mental Health - new community beds to 106 Unchanged
replace Riverview beds (#)
Home and Community Care assisted living - Unchanged
units construction (#)
Administrative expenses as a per cent of 25.8% Unchanged
total expenses
EMERGENCY HEALTH SERVICES $188 Unchanged
-----------------------------------------------------------------------------------------------------------------------------
HUMAN RESOURCES $1,789 $1,672
Temporary and Continuous Assistance - 146,700 134,000 A 1% change in caseload affects expenditures by
average caseload (#) approximately $10 million annually. A 1% change in the
unemployment rate affects expenditures by approximately
$12 million annually.
Temporary and Continuous Assistance - 665 Unchanged The average cost per case is sensitive to behaviour
average cost per case ($) changes, composition of the caseload, and factors such
as treatment of income and length of time on income
assistance.
A 1% change in the annual average cost per case
affects expenditure by approximately $8-$12 million.
-----------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECOND QUARTERLY REPORT 2002/03
APPENDIX 45
--------------------------------------------------------------------------------
TABLE A.9 MAIN EXPENDITURE ASSUMPTIONS AND SENSITIVITIES
- CONSOLIDATED REVENUE FUND
[Enlarge/Download Table]
-----------------------------------------------------------------------------------------------------------------------------
2002/03
-------------------------------
MINISTRY PROGRAMS AND ASSUMPTIONS BUDGET UPDATED 2002/03 FULL-YEAR SENSITIVITIES
ESTIMATE FORECAST AND FORECAST DETAILS
-------------------------------
($ MILLIONS)
-----------------------------------------------------------------------------------------------------------------------------
PUBLIC SAFETY AND SOLICITOR GENERAL $506 UNCHANGED
Corrections - number of inmates (#) 2,150- Approx 2,150 A 1% change in the prison population affects costs by
2,350 $1.1 million.
EMERGENCY PROGRAM ACT $16 $22 Actual costs will vary depending on the number or
severity of natural disasters such as earthquakes and
floods (additional costs of $19 million are funded
from contingencies).
-----------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION $739 UNCHANGED
Amortization portion of the Public $53 Unchanged Earlier completion could affect annual amortization
Transit Vote expenditures.
-----------------------------------------------------------------------------------------------------------------------------
MANAGEMENT OF PUBLIC FUNDS AND DEBT $920 $800 The full-year impact of a one per cent change in
interest rates affects direct operating debt
interest expense by $88 million and by
Expected interest rates for new $121 million when taxpayer-supported
provincial borrowing: debt is included.
Short-term 2.94% 3.40%
Long-term 6.51% 6.45%
US exchange rate ($) $0.6375 $0.6546
-----------------------------------------------------------------------------------------------------------------------------
GOVERNMENT RESTRUCTURING $230 UNCHANGED
(ALL MINISTRIES)
Workforce Adjustment $65 $100 Includes severance and other associated costs.
FTE reduction incurring severance costs (#) 1,900 2,100 A 10% change in the estimated number of FTEs incurring
severance, or in the average cost of severance, would
affect costs by approximately $22 million.
Accomodation Initiative $135 $100 As ministry plans are confirmed, costs may change.
Other restructuring $30 $30 As ministry plans are confirmed, costs may change.
-----------------------------------------------------------------------------------------------------------------------------
GOVERNMENT-WIDE ISSUES UNCHANGED
Compensation Agreements expiring this year will be settled under a
0-0-0 bargaining mandate. There will be no
across-the-board general wage increases for sectors.
Legitimate skills shortages may be addressed by
employers through market adjustment increases.
The provincial government will not provide incremental
funding for market adjustment increases.
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--------------------------------------------------------------------------------
SECOND QUARTERLY REPORT 2002/03
46 APPENDIX
--------------------------------------------------------------------------------
TABLE A.10 CROWN CORPORATION ASSUMPTIONS AND SENSITIVITIES
[Enlarge/Download Table]
-----------------------------------------------------------------------------------------------------------------------------
2002/03
-------------------------------
CROWN CORPORATION AND ASSUMPTIONS BUDGET UPDATED 2002/03 FULL-YEAR SENSITIVITIES
ESTIMATE FORECAST
-------------------------------
($ MILLIONS)
-----------------------------------------------------------------------------------------------------------------------------
BRITISH COLUMBIA BUILDINGS CORPORATION
Net income (loss) 34 35 +/-10% in timing/extent of ministry restructuring =
+/-$2-$4 million.
Short-term interest rates 2.9% 2.7% +/-10% in energy prices = +/-$2 million.
+/-1% in interest rates = +/-$0.3 million.
Gains on disposal of property 6.0 7.2 Value and timing of property sales depend on market timing
Capital spending up to 70 46 and values. Shareholder-directed disposal could impact gains.
Dividend to CRF 13 14 +/-$10 million in capital spending = +/-$0.5 million in net
expenses.
Grants in lieu of taxes for owned 19 19 Potential move to full property tax = up to
properties +/-$14 million in costs depending on implementation timing.
-----------------------------------------------------------------------------------------------------------------------------
BRITISH COLUMBIA FERRY CORPORATION
Net income (loss) 16 24
Capital spending 103 84
Traffic volume trends +1.6% +1.6% +/-1% in traffic volumes = +/-$3 million.
Toll increases CPI nil +/-1% in fuel prices = +/-$0.5 million.
Fuel costs 51 47
Dedicated motor fuel tax 74 74
-----------------------------------------------------------------------------------------------------------------------------
BC TRANSPORTATION FINANCING AUTHORITY
Net income (loss) (56) (37)
Capital spending 254 256 +/-1% in provincial fuel consumption volumes =+/-$2 million.
Dedicated tax revenue 203 203 +/-1% in floating/new fixed-borrowing rates =+/-$5
Average floating/new fixed borrowing rate 5.6% 5.4% million in interest costs.
-----------------------------------------------------------------------------------------------------------------------------
BRITISH COLUMBIA HYDRO AND POWER AUTHORITY
Net income before transfer (to) from rate 350 350 Range of net income from $285-$430 million, depending on
stabilization account total the impact of the following non-controllable factors:
Transfer (to) from rate stabilization account (5) 65 +/-5% in average temperatures = +/-$5 million
Dividend to CRF 283 341 +/-1% in hydro generation = +/-$20 million
Capital spending 745 745 +/-$1/MW/h in electricity trade margins = +/-$30 million
Water inflow levels (snowpack) 100% 109% +/-10% in natural gas prices = +/-$5 million
Domestic load growth -0.1% 0.4% +/-100 basis points in borrowing rate = +/-$20 million
BC real GDP 0.6% 1.4% +/-$0.01 in exchange rates = +/-$10 million
Forward energy price date mid-Jan/02 mid-Sep/02
CDN short-term interest rates 2.9% 2.7%
Exchange rate (US/CDN) $0.64 $0.65
-----------------------------------------------------------------------------------------------------------------------------
BRITISH COLUMBIA LIQUOR DISTRIBUTION BRANCH
Net income 640 641 Price competition, economic conditions, weather patterns
Net sales increase 1.8% 1.8% and timing of holidays affect sales.
Capital spending 22 11 +/-1% in sales volume =+/-$6 million in net income.
-----------------------------------------------------------------------------------------------------------------------------
BRITISH COLUMBIA LOTTERY CORPORATION
Net income 660 670
Dividend to CRF 476 485
Capital spending 26 34
Gaming activity +6.3% +7.2% +/-1% in gaming activity =+/-$6 million.
-----------------------------------------------------------------------------------------------------------------------------
BRITISH COLUMBIA RAILWAY COMPANY
Net income (loss) before write-downs 14 12 Total traffic disruption could reduce net income by
Capital spending 66 58 $4 million per week.
-----------------------------------------------------------------------------------------------------------------------------
INSURANCE CORPORATION OF BRITISH COLUMBIA
Net income (loss) (10) 15
Investment income 399 374 +/-0.25% in investment returns = +/-$14 million.
Capital spending +/-1% in investment balance = +/-$4 million.
o operational 30 15
o ICBC Properties Ltd. 86 94 Capital spending shown at gross expenditures before
Restructuring costs 15 8 recoveries of $41 million due to a lease cancellation
settlement.
Policy premium revenue trend +5.2% +5.4% +/-1% in premium revenue = +/-$27 million (Increase
in revenue trend reflects higher-than-expected optional
insurance sales.)
Premium rate changes CPI+ CPI+
Claims-incurred trends +2.0% +5.3% +/-1% in assumed claims trend = +/-$21-$25 million
Adjustment to prior year claims - (78) +/-1% in prior year unpaid claims estimate = +/-$40
million.
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--------------------------------------------------------------------------------
SECOND QUARTERLY REPORT 2002/03
APPENDIX 47
--------------------------------------------------------------------------------
TABLE A.11 STATEMENT OF FINANCIAL POSITION
(UNAUDITED)
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Year-to-Date Updated Forecast
Actual --------------------------------------------------
March 31 Sept. 30 Increase/ March 31 Increase/
2002 2002 (Decrease)(1) 2003 (Decrease)(1)
------------------------------------------------------------------------------------------------------------------------------------
($ millions)
FINANCIAL ASSETS
Cash and temporary investments ................................ 780 1,429 649 169 (611)
Other financial assets ........................................ 4,342 3,725 (617) 4,513 171
Investments in commercial Crown corporations and agencies:
Retained earnings of self-supported Crown corporations ...... 2,525 2,741 216 2,573 48
Loans for purchases of assets recoverable from agencies...... 7,552 8,000 448 7,518 (34)
---------------------------------------------------------------
10,077 10,741 664 10,091 14
Warehouse borrowing program assets............................. 1,067 1,206 139 -- (1,067)
---------------------------------------------------------------
16,266 17,101 835 14,773 (1,493)
---------------------------------------------------------------
LIABILITIES
Current liabilities ........................................... 4,044 4,362 318 3,837 (207)
Debt:
Taxpayer-supported debt ..................................... 27,175 27,985 810 30,766 3,591
Self-supported debt.......................................... 8,741 9,328 587 7,643 (1,098)
Forecast allowance .......................................... -- -- -- 500 500
---------------------------------------------------------------
Total provincial debt........................................ 35,916 37,313 1,397 38,909 2,993
LESS: guarantees and non-guaranteed debt .................... (464) (448) 16 (436) 28
---------------------------------------------------------------
35,452 36,865 1,413 38,473 3,021
---------------------------------------------------------------
39,496 41,227 1,731 42,310 2,814
---------------------------------------------------------------
NET LIABILITIES................................................. (23,230) (24,126) (896) (27,537) (4,307)
---------------------------------------------------------------
CAPITAL AND OTHER ASSETS
Prepaid capital advances ...................................... 7,033 7,033 -- 7,192 159
Tangible capital assets........................................ 11,206 11,175 (31) 11,332 126
Other assets .................................................. 281 294 13 285 4
---------------------------------------------------------------
18,520 18,502 (18) 18,809 289
---------------------------------------------------------------
ACCUMULATED SURPLUS (DEFICIT) ................................... (4,710) (5,624) (914)(2) (8,728) (4,018)(2)
---------------------------------------------------------------
---------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
1 Change from March 31, 2002
2 Change includes accounting policy equity adjustments.
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CHANGE IN FINANCIAL POSITION
-------------------------------------------------------------------------------------------------
September 30 March 31
2002 2003
-------------------------------------------------------------------------------------------------
($ millions)
CHANGE IN ACCUMULATED (SURPLUS) DEFICIT:
(Surplus) deficit for the period .............................. 896 4,000
Accounting policy equity adjustments .......................... 18 18
----------------------------
914 4,018
----------------------------
WORKING CAPITAL CHANGES:
Increase (reduction) in cash and temporary investments ........ 649 (611)
Increase (decrease) in guarantees and non-guaranteed debt ..... (16) (28)
Other working capital changes ................................. (922) 382
----------------------------
(289) (257)
----------------------------
CAPITAL ASSET AND INVESTMENT CHANGES:
Increase in taxpayer-supported capital investments ............ 499 1,399
LESS: amortization and other accounting changes ............... (530) (1,114)
----------------------------
(31) 285
----------------------------
Increase in total investment in commercial Crown corporations . 666 1,096
LESS: loan repayments and other accounting changes ............ (2) (1,082)
----------------------------
664 14
----------------------------
Increase (decrease) in warehouse borrowing investments ........ 139 (1,067)
----------------------------
772 (768)
----------------------------
INCREASE (DECREASE) IN TOTAL PROVINCIAL DEBT .................... 1,397 2,993
----------------------------
----------------------------
-------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECOND QUARTERLY REPORT 2002/03
48 APPENDIX
--------------------------------------------------------------------------------
TABLE A.12 FULL-TIME EQUIVALENTS (FTEs)(1) - UPDATED FORECAST
[Enlarge/Download Table]
-----------------------------------------------------------------------------------------------------------------------------------
2002/03
-------------------------------------
Budget Updated Actual
Estimate Forecast Variance 2001/02
-----------------------------------------------------------------------------------------------------------------------------------
Ministries and special offices............................................... 31,608 30,300 (1,308)(2) 33,214
Taxpayer-supported Crown corporations and agencies........................... 8,800 8,522 (278)(3) 9,178
----------------------------------------------------
TOTAL FTEs................................................................... 40,408 38,822 (1,586) 42,392
----------------------------------------------------
----------------------------------------------------
(1) Full-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 and 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.
(2) Primarily due to accelerated implementation of service plan reductions,
and higher participation in the voluntary departure and early
retirement programs.
(3) Primarily due to earlier-than-anticipated staffing reductions resulting
from the implementation of core review recommendations.
--------------------------------------------------------------------------------
SECOND QUARTERLY REPORT 2002/03
Dates Referenced Herein and Documents Incorporated by Reference
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