BC Surplus $865 Million

BC Finance Minister Gary Collins has released the province's first quarterly report and the picture looks promising.

He says the first quarterly report expects this year's budget surplus to reach $865 million, significantly higher than the $100 million surplus estimated when Budget 2004 was tabled in February.

He attributes the higher than expected surplus to, "solid employment gains, near record lumber prices, higher energy and mineral prices, sustained housing market activity and stronger retail sales."

Collins says Government revenue is forecast to be $1.2 billion higher than budget due to higher natural resource royalties, revenues from taxation, and commercial Crown corporation net incomes. "Excluding the BC Rail transaction, which is bottom line neutral, spending for ministries and other programs in the consolidated revenue fund is on track to come in $45 million below budget. This includes the estimated $175 million cost of fighting this year's forest fires, offset by lower debt interest costs," says Collins.

Collins says provincial debt is expected to decline to $37.2 billion by the end of 2004/05, $603 million lower than in 2003/04 and $2.2 billion lower than the February budget, mainly due to improvements in government's cash position and forecast surplus.

"To help manage the risk associated with potentially volatile commodity revenues and unexpected economic or financial shocks, the forecast allowance is increased from $100 million to $300 million. In the event that it is not required, the forecast allowance would increase the size of the budget surplus."

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