British Columbia is operating debt-free for the first time in more than 40 years, according to the Province’s Second Quarterly Report.
“When we formed government, we committed to do things differently. We promised British Columbians that we would take on the big challenges in our province from the housing crisis to child care,” said Carole James, Minister of Finance. “Today’s results show that our plan is working and that investing in people pays dividends. We’re tackling our province’s major challenges head on and, at the same time, eliminating B.C.’s operating debt for the first time in over 40 years.”
While the B.C. government continues to make record-level capital investments in affordable housing, schools and hospitals, debt affordability has improved this quarter and the province’s debt-to-GDP ratio is at its lowest point since the 2008 financial crisis.
As B.C.’s real estate market continues to moderate, the Province forecasts that property transfer tax revenues will decline by an additional $150 million. The decline in real estate revenue is offset by higher-than-expected personal and corporate income tax revenue.
At the end of the second quarter, ICBC’s forecast decreased by a further $206 million. Government is responding to the ongoing risk ICBC poses to the fiscal plan and the moderation in the housing market by increasing the forecast allowance by $600 million. Overall, government’s projected surplus is $1.35 billion for the 2018-19 fiscal year.
Private sector economists are predicting stable economic growth and expect B.C. to rank among the top of provincial rankings in 2018. B.C. is projected to lead Canada in gross domestic product (GDP) growth in 2019, with 2.4% growth expected.