BC budget update projects higher surplus, lower real estate revenue

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VICTORIA (NEWS 1130) – Our province’s slowing housing market is starting to have some major implications for the government’s budget projections.

The BC Liberals are predicting $200 million less than forecast in the last quarterly update. It’s also downgrading its expectations for revenue from the 15 per cent foreign buyer tax, which was brought in back in August.

“BC continues to outperform the country in economic growth, but with modest growth expected for next year. That means we must remain vigilant and continue to create a healthy economic profile, with a fiscal plan that balances spending with debt repayment and an economic strategy that diversifies our industries and export partners,” says Finance Minister Mike de Jong.

The government expected it to bring in $165 million this fiscal year, but now it’s lowering that to $50 million and revenues are expected to increase by $372 in 2016-2017 when compared to the first quarter.

Overall, the province expects its surplus to be $2.2 billion which is an increase of $300 million since the last quarterly projection.

“Year-to-date economic data continue to show strong domestic activity when compared to 2015, and private sector forecasters expect BC to rank first in provincial economic growth in 2016. Retail sales and exports are performing better than expected in the first Quarterly Report. So far this year, BC has seen an increase in 71,400 jobs over the same period last year,” says the provincial government in a statement.

Also announced in today’s budget update was a modest raise for about 310,000 unionized workers in BC’s public sector. It comes out of what’s known as the Economic Stability Fund. The workers will see a bump of 0.35 per cent starting next February.

As for debt, the province says taxpayer-supported debt is forecast to end this fiscal year at $2.1 billion lower than forecast in budget and $1.6 billion less than last year.

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