B.C. finance minister forecasts budget surplus decline, but stable economic growth

VICTORIA – British Columbia’s budget surplus projections are dipping, but economic growth remains steady amid declines in neighbouring provinces and for overseas trading partners, says Finance Minister Mike de Jong.

The finance minister provided an update of the province’s finances in advance of meetings on Friday with independent economic forecasters and ahead of his budget presentation in 2016.

De Jong said on Tuesday that B.C.’s budget surplus was forecast to be down $19 million from last February’s projection, to $265 million.

“Forecasters continue to call for steady, stable growth for British Columbia,” he said. “For B.C., the domestic scenario is continuing to look relatively healthy and relatively strong.”

He said the province’s economic growth is forecast at two per cent this year and 2.4 per cent in 2016, slightly ahead of national growth projections of two per cent next year. De Jong said B.C. is poised to lead Canada in economic growth both this year and next.

The financial update indicates that B.C.’s hot housing market continues to fill provincial revenue coffers, adding $150 million in property tax revenues. But falling revenues from natural resources, especially natural gas, has cut resource revenue projections by $85 million, he said.

Natural gas revenues were forecast last year to be $344 million, but are now revised sharply downwards to $185 million.

“That’s a far cry from the years when those numbers were coming in excess of $1 billion,” said de Jong.

Opposition New Democrat finance critic Carole James said she’s concerned the hot real estate market is propping up the government’s surplus projections.

“That’s worrisome,” she said. “That is not a long-term economic plan.”

De Jong, meantime, said he’s concerned that economic slowdowns outside of B.C. could have an impact here.

Most of B.C.’s trading partners, with the exception of the United States, are facing economic declines, he said.

“I don’t want to leave the impression that anything I’ve showed you here points to a pending, looming catastrophe internationally,” de Jong said. “It’s just sluggish. Japan’s in a recession.”