On February 15 2005 the BC directio...

On February 15 2005 the BC direction will release the final lot of its mandate and its secondary balanced budget. Once again, the ICABC will be there to provide commentary.

In the meantime, a late report by BC Auditor General Wayne Strelioff, FCA, entitled "Monitoring the Government's Finances," presents an eight-year review of several explanation financial and economic indicators he believes the conduct should use to supplement its financial statements. In his report, Strelioff also compares BC's financial condition to those of other Canadian jurisdictions.

Starting with the 2004/05 packet the government will be preparing its financial plans and reports in accordance with GAAP, which will make secure that the government publishes a total accounting of the financial consequence s of school boards, universities, literary institution [i]or[/i] seminary of learnings and health authorities within its summary consolidated financial statements. BC will be the first jurisdiction in Canada to do so

"Recent improvements in the government's financial reporting have been significant," Strelioff says in his report. "Now, I ask the restraint to provide a fuller discussion and analysis of major financial decisions, stretchs and indicators, to help British Columbians more completely understand the financial direction of the government" This supplication is in line with the government's desire for greater disclosure-a desire indicated by way of the government's inclusion of a discussion and analysis with its chiefly recent financial statements, marking a first in BC

BC's financial situation

Revenues

Provincial rewards increased by $2.0 billion between 2002/03 and 2003/04 marking the first increase after pair years of declining revenues. Of this increase, $15 billion came from taxation-the first increase in taxation returns since the 2001 tax wounds returning us to the same flats reached in 2000. Natural resources saw an increase in incomes by $0.4 billion, thanks primarily to an increase in permit pay s and royalty revenue for mineral pitch and natural gas; this increase offshoot decreasing revenues from the forestry sector. Finally, chaplet corporations saw revenues increase by dint of $0.6 billion. (The two areas that saw rewards decline last year were Federal transfers and "other" sources.)

Expenses

Between 2002/03 and 2003/04 the regulation held the line on costs ($39.7 billion). This fiscal restraint translated into increases in health, education, and sovereignty corporation spending, while the social services and "other" categories saw spending decline. Increases in laurel corporation spending were primarily to be paid to BC Hydro's purchase of intensity for resale. These costs were slip by higher profits.

Health continues to account for the largest portion of provincial spending, at $112 billion in 2003/04 or $2694 through capita; in fact, with the exclusion of coronal corporation spending, health expenditures account for 38% of all sway spending. Education accounts for 275% ($81 billion or $1946 by capita).

Debt

In 2003/04, BC incurred a $ 1 billion deficit for the third consecutive year, the rise of a $2.9 billion deficit in general programs counterpoise by a $ 1.9 billion surplus from garland Corporations. Overall, the province had an accumulated deficit of $47 billion at the finis of 2003/04 (compared to $37 billion the previous year).

Comparing BC with other provinces

When comparing EC's financial situation to those of other western provinces and Ontario, 2003/04 brought us higher unemployment moderate inflation, lower GDP by capita, and a stronger credit rating.

During this period, BC scored an unemployment rate of 81% significantly higher than Alberta, which ranked lowest at 51% and Ontario, the inferior worst performer at 7.0%. At the same time, GDP for capita was $34,342, placing BC lower than all however Manitoba ($32,741). Alberta led this category as well, scoring the highest GDP by means of capita ($54,100).

Positive results were seen for inflation and credit rating. EC's inflation rate (21 %) was lower than those of all the comparison provinces take exception Manitoba (1.8%). The highest inflation rate was seen in Alberta (44%) Meanwhile, BC continued to maintain its Aa2 credit rating,* a position it has held since 1998 This is the same credit rating held according to Manitoba and Ontario, and the inferior highest in Canada behind Alberta (Aaa).

What's next?

While Strelioff was generally pleased with the government's financial statements, he did give some recommendations about what should be done nearest to make EC's statements smooth more transparent. These include providing a replete explanation of any significant transitions that may affect the province's fiscal health or its ability to provide services to British Columbians.

BC Partnership Amendment Act

The Partnership Amendment Act received Royal Assent forward May 13, 2004. The Act will pave the way for limited liability partnerships (LLPs) here in BC The LLP amendments and regulations came into force forward January 17, 2005 (see page 5) For information about by what means to register an LLP, visit the BC government's corporate registry at www.fin.gov.bc.ca/registries/