Province Of British Columbia 18-K/A Annual report (foreign governments) (amended)

Exhibit 99.11

 

 

National Library of Canada Cataloguing in Publication Data

British Columbia. Office of the Comptroller General.

Public accounts for the year ended... – 2000/2001

Annual.

Report year ends Mar. 31.

Continues: British Columbia. Ministry of Finance.

Public accounts. ISSN 1187–8657.

ISSN 1499–1659 = Public accounts–British Columbia.

Office of the Comptroller General

1. British Columbia–Appropriations and
expenditures–Periodicals. 2. Revenue–British
Columbia–Periodicals.

3. Finance, Public–British Columbia–Periodicals. 1.
British Columbia. Ministry of Finance. 2. Title.

HJ13.B74 352.4’09711’05 C2001–960204–9

July 28, 2021

Victoria, British Columbia

Lieutenant Governor of the Province of British Columbia

MAY IT PLEASE YOUR HONOUR:

The undersigned has the honour to present the Public Accounts of the Government of the Province of British Columbia for the fiscal year ended March 31, 2021.

SELINA ROBINSON

Minister of Finance

Ministry of Finance

Victoria, British Columbia

Honourable Selina Robinson

Minister of Finance

I have the honour to submit herewith the Public Accounts of the Government of the Province of British Columbia for the fiscal year ended March 31, 2021.

Respectfully submitted,

CARL FISCHER

Comptroller General

PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

This page intentionally left blank

PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

British Columbia’s Public Accounts

The Public Accounts include the Summary Financial Statements of the provincial Government Reporting Entity which includes the financial results of all ministries and Crown agencies presented on a consolidated basis. The supporting notes and schedules define the accounting policies followed in preparing the province’s financial statements and form an integral part of the overall financial picture of the province’s financial activities in the fiscal year ending March 31, 2021.

Responsibility for the preparation of the government’s financial statements rests with the Office of the Comptroller General. The accounting standards followed by the province are established in section 23.1 of the Budget Transparency and Accountability Act. Although accounting policies are based on Public Sector Accounting Standards (PSAS), the application of standards to specific programs and transactions is the responsibility of the preparer who must use professional judgement to determine the treatment that is most representative of the underlying economic substance and best serves the information requirements of the users of government financial statements. To ensure due diligence in the application of accounting policies, decisions are based on comprehensive understanding of the substance of transactions, reference to existing and emerging accounting standards, and consultation with standard setters, other jurisdictions and the audit community.

In September 1999 the final report of the Budget Process Review Panel established clear principles for financial reporting based on user needs and led to the introduction of the Budget Transparency and Accountability Act which forms the basis of British Columbia’s legislated reporting framework. British Columbia is at the forefront of financial accountability by providing all financial reporting on a full accrual basis with direct comparability between budget and actual results. Conflicts can arise between the legislated requirement for comparable and consistent financial reporting and the national and international standards that guide accounting or the interpretation of those standards. Our obligation is to ensure financial reporting meets the accountability requirements of the public and stakeholders, within the framework established in legislation.

Despite the growing complexity of the reporting process, British Columbia remains committed to timely delivery of the Public Accounts each year and continues to focus on consistency in budgeting and financial reporting based on the comparability of its Estimates and Public Accounts, and the focus on “one bottom line”; that is, the Summary Financial Statements of the province.

Throughout the 2020/21 fiscal year, government maintained a state of emergency in response to the COVID–19 Novel Coronavirus pandemic. Government’s response to the COVID–19 pandemic had a significant financial impact on the 2020/21 Summary Financial Statements. Additional financial information specific to the pandemic is included on pages 13–14 which provides details on pandemic response and economic recovery spending of $10,087 million. We have worked closely with our colleagues across Canada and the Office of the Auditor General to ensure we maintain government’s high standards of transparency and financial accountability.

I would like to thank the Select Standing Committee on Public Accounts of the Legislative Assembly, government ministries, Crown corporations and agencies, and the Auditor General and his staff for their cooperation and support in preparing the Public Accounts.

Comments or questions regarding the Public Accounts document are encouraged and much appreciated. Please direct your comments or questions to me by mail at PO Box 9413 STN PROV GOVT, Victoria BC V8W 9V1; e–mail at: Carl.Fischer@gov.bc.ca; by telephone at 250–387–6692; or by fax at 250–356–2001.

Further information on the government’s financial performance is also provided through the Consolidated Revenue Fund Extracts (available on the Internet – website http://gov.bc.ca/publicaccounts). These extracts compare actual to planned spending of ministries on an appropriation basis, fulfilling ministries accountability back to the Legislative Assembly.

CARL FISCHER

Comptroller General

PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

This page intentionally left blank

PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

Contents

Overview (Unaudited)
Public Accounts Content	9
Legislative Compliance and Accounting Policy Report	10
Financial Statement Discussion and Analysis Report	11
Highlights	11
Discussion and Analysis	15
Economic Highlights	30
Summary Financial Statements
Statement of Responsibility for the Summary Financial Statements of the Government of the Province of British Columbia	35
Report of the Auditor General of British Columbia	37
Consolidated Statement of Financial Position	45
Consolidated Statement of Operations	46
Consolidated Statement of Change in Net Liabilities	47
Consolidated Statement of Cash Flow	48
Notes to Consolidated Summary Financial Statements	50
Reporting Entity	91
Consolidated Statement of Financial Position by Sector	94
Consolidated Statement of Operations by Sector	98
Statement of Financial Position for Self–supported Crown Corporations and Agencies	102
Summary of Results of Operations and Statement of Equity for Self–supported Crown Corporations and Agencies	104
Consolidated Statement of Tangible Capital Assets	106
Consolidated Statement of Guaranteed Debt	107
Supplementary Information (Unaudited)
Adjusted Net Income of Crown Corporations, Agencies and the SUCH Sector	111
SUCH Statement of Financial Position	114
SUCH Statement of Operations	116
Consolidated Staff Utilization	117
Consolidated Revenue Fund Extracts (Unaudited)
Statement of Financial Position	121
Statement of Operations	122
General Fund Statement of Financial Position	123
General Fund Statement of Operations	124
BC Prosperity Fund Statement of Financial Position	125
BC Prosperity Fund Statement of Operations	125
Statement of Cash Flow	126
Schedule of Net Revenue by Source	128
Schedule of Comparison of Estimated Expenses to Actual Expenses	130
Schedule of Financing Transaction Disbursements	132
Schedule of Write–offs, Extinguishments and Remissions	133
Provincial Debt Summary
Overview of Provincial Debt (Unaudited)	137
Provincial Debt (Unaudited)	138
Change in Provincial Debt (Unaudited)	139
Reconciliation of Summary Financial Statements’ Deficit (Surplus) to Change in Taxpayer–supported Debt and Total Debt (Unaudited)	140
Reconciliation of Total Debt to Summary Financial Statements’ Debt (Unaudited)	140
Change in Provincial Debt, Comparison to Budget (Unaudited)	141
Interprovincial Comparison of Taxpayer–supported Debt as a Percentage of Gross Domestic Product (Unaudited)	142
Interprovincial Comparison of Taxpayer–supported Debt Service Costs as a Percentage of Revenue (Unaudited)	143
Report of the Auditor General of British Columbia on the Summary of Provincial Debt, Key Indicators of Provincial Debt, and Summary of Performance Measures	144
Summary of Provincial Debt	147
Key Indicators of Provincial Debt	149
Summary of Performance Measures	150

PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

Contents — Continued
Definitions (Unaudited)	151
Acronyms (Unaudited)	154

PROVINCE OF BRITISH COLUMBIA PUBLIC ACCOUNTS 2020/21 9

Public Accounts Content

Financial Statement Discussion and Analysis (Unaudited)—this section provides a written commentary on the Summary Financial Statements plus additional information on the financial performance of the provincial government.

Consolidated Summary Financial Statements—these audited statements have been prepared to disclose the financial impact of the government’s activities. They aggregate the Consolidated Revenue Fund (CRF), the taxpayer–supported Crown corporations and agencies (government organizations), the self-supported Crown corporations and agencies (government business enterprises) and the school districts, universities, colleges, institutes and health organizations (SUCH) sector.

Supplementary Information (Unaudited)—this section provides supplementary schedules containing detailed information on the results of those Crown corporations and agencies that are part of the government reporting entity and the impact of the SUCH sector on the province’s financial statements.

Consolidated Revenue Fund Extracts (Unaudited)—the CRF reflects the core operations of the province as represented by the operations of government ministries and legislative offices. Its statements are included in an abridged form. The CRF Extracts include a summary of the CRF Statement of Financial Position, the CRF Statement of Operating Results, the General Fund Statement of Financial Position, the General Fund Statement of Operations, the BC Prosperity Fund Statement of Financial Position, the BC Prosperity Fund Statement of Operations, the CRF Statement of Cash Flow, a CRF Schedule of Net Revenue by Source, a CRF Schedule of Expenses, a CRF Schedule of Financing Transactions, and a CRF Schedule of Write-offs, Extinguishments and Remissions, as required by statute.

Provincial Debt Summary—this section presents unaudited schedules and unaudited statements that provide further details on provincial debt and reconcile the Summary Financial Statements debt to the province’s total debt. Also included are the audited Summary of Provincial Debt, Key Indicators of Provincial Debt and Summary of Performance Measures.

This publication is available on the Internet at: http://gov.bc.ca/finance

Additional Information Available (Unaudited)

The following information is available only on the Internet at: http://gov.bc.ca/finance

Consolidated Revenue Fund Supplementary Schedules—this section contains schedules that provide details of financial activities of the CRF, including details of expenses by ministerial appropriations, an analysis of statutory appropriations, Special Accounts and Special Fund balances and operating statements, and financing transactions.

Consolidated Revenue Fund Detailed Schedules of Payments—this section contains detailed schedules of salaries, wages, travel expenses, grants and other payments.

Financial Statements of Government Organizations and Enterprises—this section contains links to the audited financial statements of those Crown corporations, agencies and SUCH sector entities that are included in the government reporting entity.

10 PROVINCE OF BRITISH COLUMBIA
PUBLIC ACCOUNTS 2020/21

Legislative Compliance and Accounting Policy Report

The focus of the province’s financial reporting is the Summary Financial Statements, which consolidate the operating and financial results of the province’s Crown corporations, agencies, school districts, universities, colleges, institutes and health organizations with the Consolidated Revenue Fund. These are general–purpose statements designed to meet, to the extent possible, the information needs of a variety of users.

The Public Accounts are prepared in accordance with the Financial Administration Act and the Budget Transparency and Accountability Act (BTAA).

The BTAA was amended in 2001 with the passing of Bill 5. Under section 20 of that Bill, the government has mandated that “all accounting policies and practices applicable to documents required to be made public under this Act for the government reporting entity must conform to generally accepted accounting principles.”

For senior governments, generally accepted accounting principles (GAAP) is generally considered to be the recommendations and guidelines of the Canadian Public Sector Accounting Board.

Section 4.1 of the BTAA established an Accounting Policy Advisory Committee (APAC) to advise Treasury Board on the implementation of GAAP for the government reporting entity (GRE). With the government’s transition to full GAAP for the 2004/05 year, the role of APAC changed to include the provision of advice on evolving developments in accounting standards by the accounting profession, as well as emerging issues within government.

PROVINCE OF BRITISH COLUMBIA PUBLIC ACCOUNTS 2020/21 11

Financial Statement Discussion and Analysis Report

Highlights

The highlights section provides a summary of the key events affecting the financial statements based on information taken from the Summary Financial Statements and Provincial Debt Summary included in the Public Accounts. The budget figures are from pages 139, 145, 148 and 150 of the Budget and Fiscal Plan 2020/21–2022/23.

Budget and Actual Results 2020/21

				In Millions									Variance
				2020/21									2020/21			2020/21
	2020/21			Updated			2020/21			2019/20			Actual to			vs
	Budget			Forecast			Actual			Actual			Budget			2019/20
	$			$			$			$			$			$
Revenue		60,585			60,967			62,156			58,660			1,571			3,496
Expense		(60,058	)		(69,111	)		(67,624	)		(58,982	)		(7,566	)		(8,642	)
Surplus(deficit) before forecast allowance		527			(8,144	)		(5,468	)		(322	)		(5,995	)		(5,146	)
Forecast allowance		(300	)											300
Surplus (deficit) for the year		227			(8,144	)		(5,468	)		(322	)		(5,695	)		(5,146	)
Capital spending:
Taxpayer–supported capital spending		7,126			6,277			5,428			4,772			(1,698	)		656
Self–supported capital spending		3,409			3,812			3,475			4,294			66			(819	)
Total capital spending		10,535			10,089			8,903			9,066			(1,632	)		(163	)
Provincial debt:
Taxpayer–supported		49,202			59,962			59,750			46,229			10,548			13,521
Self–supported		26,890			27,524			27,350			25,932			460			1,418
Forecast allowance		300												(300	)
Total provincial debt		76,392			87,486			87,100			72,161			10,708			14,939
Taxpayer–supported debt to GDP ratio		15.5	%		20.3	%		20.2	%		15.1	%		4.7			5.1

Summary Accounts Surplus (Deficit)

The province ended the year with a deficit of $5,468 million, which was $5,695 million lower than the surplus forecast in the Budget and Fiscal Plan 2020/21–2022/23. The 2020/21 deficit of $5,468 million was $5,146 million higher than the deficit of $322 million in fiscal year 2019/20.

Revenue increased by $3,496 million over fiscal year 2019/20 and was $1,571 million higher than budget. The annual increase in revenue in the current year was mainly due to contributions from the federal government for COVID–19 support, net earnings from self–supported Crown corporations and agencies due to higher earnings in the Insurance Corporation of British Columbia (ICBC), and increases in taxation revenue, offset by the elimination of MSP premiums.

Expense increased by $8,642 million over fiscal year 2019/20 and was higher than budget by $7,566 million. The increases in spending in the current year were seen across all sectors as additional services were provided through the province’s pandemic support and recovery programs. Additional spending over budget was authorized through supplementary estimates and various statutory appropriations.

12 PROVINCE OF BRITISH COLUMBIA
PUBLIC ACCOUNTS 2020/21

Financial Statement Discussion and Analysis Report

Capital Spending

Taxpayer–supported infrastructure spending on hospitals, schools, post–secondary facilities, transit, and roads totaled $5,428 million in 2020/21, $1,698 million lower than budget mainly due to project scheduling changes. This spending has been deferred to future years.

Self–supported infrastructure spending on electrical generation, transmission and distribution projects and other capital assets totaled $3,475 million in 2020/21. Self–supported capital spending was $66 million higher than budget.

Provincial Debt

When calculating total provincial debt, the province adds to its financial statement debt all debt guarantees and the debt directly incurred by self–supported Crown corporations, reduced by sinking fund assets. This balance is referred to as the total provincial debt.

Taxpayer–supported provincial debt increased by $13,521 million in 2020/21 to support the province’s pandemic support and recovery programs and increased capital infrastructure in schools, hospitals and social housing. Self–supported provincial debt increased by $1,418 million mostly due to an increase in capital infrastructure related to power projects. The increase in total provincial debt of $14,939 million was $10,708 million more than the budgeted increase in total debt of $4,231 million. The key measure of taxpayer–supported debt to GDP ended the year at 20.2%, which is higher than the forecasted 15.5% in the budget.

PROVINCE OF BRITISH COLUMBIA PUBLIC ACCOUNTS 2020/21 13

Financial Statement Discussion and Analysis Report

COVID–19 Pandemic Spending and Related Measures

This section provides an overview of spending through the Province’s pandemic response and economic recovery programs during the current year. This spending was authorized by Supplementary Estimates and statutory appropriations.

			In Millions
	Vote 52		Vote 53		Ministries		Total Spend
	$		$		$		$
Critical Services
Health and Mental Health		1,722				245		1,967
Child Care Services		56				262		318
Temporary Housing, Meals and Supports for Vulnerable Persons		162						162
Essential Services		130						130
Total		2,070		0		507		2,577
Financial Supports
BC Recovery Benefit		1,297						1,297
BC Emergency Benefit for Workers and Organizations		700						700
Supports for People Receiving Income and Disability Assistance		712						712
Temporary Rent Supplement		129						129
Canada Emergency Commercial Rent Assistance		79						79
Total		2,917		0		0		2,917
Jobs and Training
Community Job Creation Projects		25						25
Early Retirement Bridging Program		18						18
Forest Employment Program		12						12
Jobs in Health Care		229						229
Indigenous Community Skills Training and Education		15						15
Employment Supports for People with Disabilities		10						10
Short–term Skills Training for In–demand Jobs		18						18
Targeted Training for Health and Human Services		11						11
Other Jobs and Training Programs		10						10
Total		348		0		0		348
Recovery for People
K–12 Return to School Funding		45						45
Other Recovery for People Programs		7						7
Total		52		0		0		52
Recovery for Business
Amplify BC		23						23
Amateur Sports		15						15
Digital Marketing and Launch Online		44						44
Small Business Recovery Grant including Tourism Top-up		93						93
Tourism Dependent Communities		19						19
Tourism Regional Destination Marketing Initiatives		14						14
Other Recovery for Business Programs		10						10
Total		218		0		0		218

14 PROVINCE OF BRITISH COLUMBIA
PUBLIC ACCOUNTS 2020/21

Financial Statement Discussion and Analysis Report

COVID-19 Pandemic Spending and Related Measures – continued

			In Millions
	Vote 52		Vote 53		Ministries		Total Spend
	$		$		$		$
Community Infrastructure
Active Transportation – Enhancements / Maintenance		17						17
Community Economic Recovery Infrastructure Program		100						100
Highways Climate Change Adaptation		17				3		20
Anacla/Bamfield Economic Recovery Initiative		26						26
Regional/Local Airports Medivac Grants		16						16
Investing in Canada Infrastructure Program		41						41
Regional Port Enhancement Program		40						40
Remote and Rural Community Access Program		26						26
Species and Ecosystems Restoration		10						10
Shoreline, Derelict Vessel and Illegal Dumping Clean–Up		15						15
Watershed Initiative and Wetlands Projects		27						27
Other Community Infrastructure Programs		20						20
Total		355		0		3		358
Community Social Supports
Arts and Culture Resilience Plan		35						35
Childcare Spaces and Safety Grants		99						99
Total		134		0		0		134
Food Security and Farming
Invasive Species Detection and Removal		12						12
Other Food Security and Farming Programs		17						17
Total		29		0		0		29
Self–Resilience
Commercial Vehicle Innovation Challenge		30						30
Go Electric Specialty Use Vehicle Incentive Program		31						31
Tech and Innovation – Connectivity		90						90
Value Added Manufacturing and Supply Chains		16						16
Other Self–Resilience Programs		21						21
Total		188		0		0		188
Federal–Provincial Programs
Restart Funding for Local Governments				540				540
BC Transit, Translink and BC Ferries				1,080				1,080
K–12 Safe Restart Funding				242				242
Small Air Carriers Relief Funding				2				2
Total		0		1,864		0		1,864
Statutory Spending
Housing Purchases for Vulnerable Populations						196		196
Pandemic Pay for Front Line Workers						333		333
Emergency Program Act						51		51
Climate Action Tax Credit one–time enhancement						480		480
Total		0		0		1,060		1,060
Ministry Operations and other Pandemic–Related Costs
Ministry Operations and other Pandemic–Related costs		0		0		342		342
Total Pandemic Response and Recovery Program Spending		6,311		1,864		1,912		10,087

Under the Safe Restart Agreement, the federal government contributed $1,053 million towards the Federal–Provincial Program costs noted above.

PROVINCE OF BRITISH COLUMBIA PUBLIC ACCOUNTS 2020/21 15

Financial Statement Discussion and Analysis Report

Discussion and Analysis

The detailed analysis section provides an overview of significant trends relating to the Statement of Operations, Statement of Financial Position and Provincial Debt.

Revenue Analysis

Revenue analysis helps users understand the government’s finances in terms of its revenue sources and allows them to evaluate the revenue producing capacity of the government.

Revenue by Source

Revenue by source provides an outline of the primary sources of provincial revenue and how results change between those sources over time. Revenues are reported by separate components of taxation, contributions from the federal government, natural resources and other sources, which include fees and licences, contributions from self–supported Crown corporations, and investment income.

	In Millions
	2016/17		2017/18		2018/19		2019/20		2020/21
	Actual		Actual		Actual		Actual		Actual
	$		$		$		$		$
Taxation		27,093		28,321		32,714		33,266		34,166
Contributions from federal government		8,167		9,055		9,052		9,535		12,894
Fees and licences		6,213		6,249		5,593		5,572		4,329
Miscellaneous		3,508		3,543		3,413		3,838		3,136
Net earnings of self-supported Crown corporations and agencies		2,525		1,056		2,005		2,918		3,964
Natural resources		2,711		2,695		3,108		2,268		2,403
Investment income		1,232		1,101		1,243		1,263		1,264
Total revenue		51,449		52,020		57,128		58,660		62,156

Provincial revenues increased by $3,496 million in 2020/21. The improvement in provincial revenue was primarily due to increases in contributions from the federal government of $3,359 million, in net earnings of self–supported Crown corporations and agencies of $1,046 million, and in taxation revenue of $900 million. Increases in these significant sources of revenue were offset by a decrease in fees and licenses revenue of $1,243 million and a decrease of $566 million in other revenues.

In 2020/21, tax revenue increased by $900 million (2.7%). Employer health tax increased $259 million (13.7%). Personal income tax revenue increased by $461 million (4.3%) mainly reflecting a stronger income and tax base and a positive prior–year adjustment. Property transfer tax revenue increased by $489 million (30.4%) due to the higher dollar value and number of housing sales. Corporate income tax revenue decreased by $206 million (4.1%), with an increase in installments offset by a negative prior–year adjustment. Other tax revenues decreased by $103 million over the same period, mainly from increases in provincial sales tax offset by reductions in commercial property tax rates.

16 PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

Financial Statement Discussion and Analysis Report

The net earnings of self–supported Crown corporations and agencies were $1,046 million higher than 2019/20 mainly from increased earnings in ICBC of $1,904 million offset by a decrease in British Columbia Lottery Corporation of $917 million due to reduced services during the pandemic.

Natural resource revenues were $135 million higher than 2019/20, mainly from increased forestry revenue because of increased stumpage rates and timber harvest volume and from increased natural gas royalties. These were offset by decreases in minerals revenue from lower coal prices and decreases in drilling permits and fees as the COVID–19 pandemic reduced industry activity.

Own–source Revenue to GDP

The ratio of own–source revenue to GDP represents the amount of revenue the provincial government is taking from the provincial economy in the form of taxation, natural resource revenue, earnings of self–supported Crown corporations and user fees and licences (own–source revenue is all revenue except for federal transfers).

Own–source revenue to GDP has remained stable over the past five years, ending the year at 16.7%.

 

Percentage Change in Revenue

Trend analysis of revenue provides users with information about significant changes in revenue over time and between sources. This enables users to evaluate past performance and assess potential implications for the future.

Over the five years since 2016/17, total revenue has increased in relation with the increase in GDP. Taxation revenue has continued to exceed the growth in GDP. Contributions from the federal government increased significantly in fiscal 2021 due to COVID–19 support payments.

 

PROVINCE OF BRITISH COLUMBIA 17

PUBLIC ACCOUNTS 2020/21

Financial Statement Discussion and Analysis Report

Natural Resource Revenue

The chart of natural resource revenue by source explains past trends of natural resource revenue in total and by major category.

Forestry revenue increased by $316 million in 2020/21. The proportion of natural resource revenue derived from forestry increased to 54.3% in 2020/21 from 43.6% in 2019/20.

Petroleum, natural gas and mineral revenues decreased by $179 million from 2019/20. These categories of natural resource revenue account for 22.9% of natural resource revenue compared to 32.1% in 2019/20.

Water and other resource revenues decreased by $2 million in the year. They comprise 22.8% of provincial natural resource revenue.

Government–to–Government Transfers to Total Revenue

The ratio of government–to–government transfers to total revenue is an indicator of how dependent the province is on transfers from the federal government. An increasing trend shows more reliance and a decreasing trend shows less.

Federal transfers increased significantly in 2020/21, resulting in a ratio increase to 20.7%, primarily from COVID–19 support payments.

18 PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

Financial Statement Discussion and Analysis Report

Expense Analysis

The following analysis helps users to understand the impact of the government’s spending on the economy, the government’s allocation and use of resources, and the cost of government programs.

Expense by Function

Expense by function provides a summary of the major areas of government spending, and changes in spending over time. Functions, which indicate the purpose of expenditures, are defined by Statistics Canada’s Financial Management System of Government Statistics. The province uses the following functions: health, education, social services, natural resources and economic development, interest, other, transportation, general government, and protection of persons and property. The health, education and social services functions account for approximately three quarters of the province’s total operating costs.

	In Millions
	2016/17		2017/18		2018/19		2019/20		2020/21
	Actual		Actual		Actual		Actual		Actual
	$		$		$		$		$
Health		19,689		20,927		22,151		23,449		25,605
Education		12,469		13,092		14,089		14,735		14,943
Social services		4,243		4,737		5,343		5,887		7,789
Natural resources and economic development		2,465		3,374		3,825		3,778		4,191
Interest		2,587		2,623		2,684		2,727		2,722
Other		2,260		1,553		1,810		2,501		2,841
Transportation		1,784		1,931		2,021		2,126		3,360
General government		1,532		1,540		1,670		1,653		3,915
Protection of persons and property		1,655		1,930		2,004		2,126		2,258
Total expense		48,684		51,707		55,597		58,982		67,624

Government spending on programs and services increased by $8,642 million in 2020/21.

The province increased spending on the health sector by $2,156 million (9.2%), the other sector by $340 million (13.6%), the education sector by $208 million (1.4%), and the social services sector by $1,902 million (32.3%). Spending increased in the transportation sector by $1,234 million (58.0%), in the general government sector by $2,262 million (137.0%), and in all of the remaining sectors by $540 million over 2019/20. Expenses of the year included $10,087 million in pandemic response and recovery program costs as detailed on pages 13–14.

 

PROVINCE OF BRITISH COLUMBIA 19

PUBLIC ACCOUNTS 2020/21

Financial Statement Discussion and Analysis Report

In 2020/21, provincial operating expenses were $67,624 million, a $8,642 million (14.7%) increase from 2019/20. Program spending has increased by $18,940 million (38.9%) since 2016/17. This is compared to increases in GDP of 12.8% over the same period.

Expense to GDP

The ratio of expense to GDP represents the amount of government spending in relation to the overall provincial economy.

Government spending as a percentage of GDP increased from 19.3% to 22.9% in 2020/21, reflecting increased government spending on pandemic response and recovery programs.

20 PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

Financial Statement Discussion and Analysis Report

Changes in Actual Results from 2019/20 to 2020/21

	In Millions
						Surplus
	Revenue			Expense		(Deficit)
	$			$		$
2019/20 (Deficit)		58,660			58,982		(322	)
Increase in contributions from the federal government		3,359					3,359
Increase in net earnings of self–supported Crown corporations and agencies		1,046					1,046
Increase in taxation revenue		900					900
Increase in natural resources revenue		135					135
Decrease in other revenues		(1,944	)				(1,944	)
Increase in general government spending					2,262		(2,262	)
Increase in health spending					2,156		(2,156	)
Increase in social services spending					1,902		(1,902	)
Increase in transportation sector spending					1,234		(1,234	)
Increase in other program spending					1,088		(1,088	)
Subtotal of changes in actual results		3,496			8,642		(5,146	)
		62,156			67,624
2020/21 (Deficit)							(5,468	)
2019/20 Accumulated Surplus before Accumulated Other Comprehensive income							7,993
2020/21 Accumulated Surplus before Accumulated Other Comprehensive income							2,525
Accumulated other comprehensive income (loss) from self–supported Crown corporations and agencies							682
2020/21 Accumulated Surplus							3,207

The year over year increase in total revenue of $3,496 million, offset by the increase in total expense of $8,642 million, resulted in a deficit that was $5,146 million higher than the 2019/20 deficit. Accumulated surplus, including accumulated other comprehensive income, decreased from $7,769 million in 2019/20 to $3,207 million at the end of 2020/21.

PROVINCE OF BRITISH COLUMBIA 21

PUBLIC ACCOUNTS 2020/21

Financial Statement Discussion and Analysis Report

Changes from 2020/21 Budget

	In Millions
						Forecast
	Revenue			Expense		Allowance			Surplus
	$			$		$			$
Surplus per 2020/21 Budget		60,585			60,058		(300	)		227
Increased contributions from the Federal government		2,931								2,931
Decreased taxation revenue		(1,178	)							(1,178	)
Decreased miscellaneous revenue		(662	)							(662	)
Increased net earnings of self-supported Crown corporations and agencies		547								547
Decreased other revenues		(67	)							(67	)
Increased general government spending					2,019					(2,019	)
Increased social services spending					1,588					(1,588	)
Increased health spending					1,320					(1,320	)
Increased transportation spending					1,132					(1,132	)
Increased natural resources and economic development spending					1,094					(1,094	)
Increased other program spending					413					(413	)
Forecast allowance							300			300
Subtotal of changes in actual results compared to budget		1,571			7,566		300			(5,695	)
Actual Results		62,156			67,624		0			(5,468	)

Revenue was $1,571 million (2.6%) higher than the budgeted amount of $60,585 million and expenses were $7,566 million (12.6%) higher than the budgeted amount of $60,058 million. Additional spending over budget was authorized by supplementary estimates and various statutory appropriations.

Net Liabilities and Accumulated Surplus

In accordance with Canadian generally accepted accounting principles, the government’s Consolidated Statement of Financial Position is presented on a net liabilities basis. Net liabilities represent net future cash outflows resulting from past transactions and events. An analysis of net liabilities and accumulated surplus helps users to assess the government’s overall financial position and the future revenue required to pay for past transactions and events.

	In Millions									Variance
										2020/21			2020/21
	2020/21			2020/21			2019/20			Budget			vs
	Budget			Actual			Actual			to Actual			2019/20
	$			$			$			$			$
Financial assets		50,530			58,375			48,354			7,845			10,021
Liabilities		(99,391	)		(111,534	)		(93,639	)		(12,143	)		(17,895	)
Net Liabilities		(48,861	)		(53,159	)		(45,285	)		(4,298	)		(7,874	)
Non–financial assets		57,907			56,366			53,054			(1,541	)		3,312
Accumulated surplus		9,046			3,207			7,769			(5,839	)		(4,562	)

22	PROVINCE OF BRITISH COLUMBIA
	PUBLIC ACCOUNTS 2020/21

Financial Statement Discussion and Analysis Report

The accumulated surplus represents the sum of the current and prior years’ operating results, and accumulated changes in other comprehensive income. At March 31, 2021, the accumulated surplus was $3,207 million, $5,839 million lower than budget.

Financial assets were $10,021 million higher than 2019/20 as the result of increases in loans for the purchase of assets, recoverable from agencies of $1,533 million, cash, cash equivalents and temporary investments of $2,575 million, equity in self-supported Crown corporations and agencies of $3,108 million, loans, advances and mortgages receivable of $1,081 million, due from other governments of $779 million, and $945 million in other financial assets.

Liabilities increased by $17,895 million from 2019/20. This increase was the result of an increase of $13,313 million in taxpayer-supported debt mainly to support pandemic response and recovery programs and for infrastructure spending on hospitals, schools, post-secondary facilities, transit, and roads, an increase in self-supported debt of $1,428 million due to investment in government power projects, and an increase of $3,154 million in other liabilities including accounts payable and deferred revenue.

Non-financial assets typically represent resources, such as tangible capital assets, that the government can use in the future to provide services. Non-financial assets increased by $3,312 million over 2019/20 representing government’s investment in current year infrastructure spending.

Accumulated Surplus

The accumulated surplus represents current and all prior years’ operating results. In 2020/21, the province had an accumulated surplus of $3,207 million, $4,562 million lower than in 2019/20. The positive operating results of prior years, although offset by the current year deficit, continue to provide the flexibility to sustain core public services.

 

PROVINCE OF BRITISH COLUMBIA	23
PUBLIC ACCOUNTS 2020/21

Financial Statement Discussion and Analysis Report

Components of Net Liabilities

Financial Assets

Trend analysis of financial assets provides users with information regarding the amount of resources available to the government that can be converted to cash to meet obligations or fund operations.

	In Millions
	2016/17		2017/18		2018/19		2019/20		2020/21
	Actual		Actual		Actual		Actual		Actual
	$		$		$		$		$
Cash, cash equivalents, temporary investments		4,232		3,440		3,029		3,985		6,560
Equity in self-supported Crown corporations and
agencies		7,494		6,111		5,732		6,515		9,623
Loans, advances and mortgages receivable		2,153		2,328		2,383		2,940		4,021
Loans for the purchase of assets, recoverable from
agencies		23,809		20,534		22,547		24,768		26,301
Other financial assets		9,131		10,748		10,994		10,146		11,870
Total financial assets		46,819		43,161		44,685		48,354		58,375

In 2020/21, financial assets increased by $10,021 million primarily due to an increase in cash, cash equivalents, and temporary investments of $2,575 million, recoverable capital loans of $1,533 million due to investments in power projects, and an increase in equity in self-supported Crown corporations and agencies of $3,108 million related to the increase in net income reported by ICBC. The remaining financial assets increased by $2,805 million.

Liabilities

Trend analysis of liabilities provides users with information to understand and assess the demands on financial assets and the revenue raising capacity of government.

	In Millions
	2016/17		2017/18		2018/19		2019/20		2020/21
	Actual		Actual		Actual		Actual		Actual
	$		$		$		$		$
Taxpayer-supported debt		42,390		44,752		43,209		46,669		59,982
Self-supported debt		23,699		20,619		22,655		24,847		26,275
Total financial statement debt		66,089		65,371		65,864		71,516		86,257
Accounts payable and other liabilities		9,031		9,751		10,572		11,497		13,092
Deferred revenue		9,624		10,027		10,518		10,626		12,185
Total liabilities		84,744		85,149		86,954		93,639		111,534

In 2020/21, total liabilities increased by $17,895 million. Liabilities are obligations that must be settled at a future date by the transfer or use of assets. Taxpayer-supported financial statement debt increased by $13,313 million and self-supported financial statement debt increased by $1,428 million. Information relating to the government’s debt management can be found in more detail in the analysis of the total provincial debt on page 27. Deferred revenue increased by $1,559 million and accounts payable and other liabilities increased by $1,595 million. Deferred revenue represents unearned revenues and restricted contributions that will be recognized as revenue in future periods.

24	PROVINCE OF BRITISH COLUMBIA
	PUBLIC ACCOUNTS 2020/21

Financial Statement Discussion and Analysis Report

Non-financial Assets

Trend analysis of non-financial assets provides users with information to assess the management of a government’s infrastructure and long-term non-financial assets.

	In Millions
	2016/17		2017/18		2018/19		2019/20		2020/21
	Actual		Actual		Actual		Actual		Actual
	$		$		$		$		$
Tangible capital assets		41,303		45,836		47,829		50,023		52,781
Other non-financial assets		2,822		2,700		2,786		3,031		3,585
Total non-financial assets		44,125		48,536		50,615		53,054		56,366

Management of non-financial assets has a direct impact on the level and quality of services a government is able to provide to the public. Non-financial assets typically represent resources that government can use in the future to provide services. At March 31, 2021, non-financial assets were $56,366 million which was $3,312 million higher than 2019/20 and $12,241 million higher than fiscal 2016/17. The majority of the province’s non-financial assets represent capital expenditures for tangible capital assets net of amortization. The government has increased its investment in infrastructure spending by $2,758 million, to ensure service potential is available to deliver programs and services in future periods. Capital expenditures are not included on the Consolidated Statement of Operations and have no effect on the current deficit. They reduce future operating results in the form of amortization expense as the service potential of assets is used to deliver programs and services.

Change in Capital Stock

This measure shows the impact of net changes to the government’s stock of physical capital. Positive amounts demonstrate an investment in infrastructure to replace existing capital and provide service potential in future periods.

The net annual investment in capital was $2,758 million in 2020/21, and $12,501 million since the start of fiscal 2016/17 (including the Transportation Investment Corporation which was fully consolidated in fiscal 2017/18). Total capital stock has also increased steadily over that period, which indicates that capital infrastructure is available to continue providing programs and services in future periods.

 

PROVINCE OF BRITISH COLUMBIA	25
PUBLIC ACCOUNTS 2020/21

Financial Statement Discussion and Analysis Report

Net Liabilities and Accumulated Surplus

	In Millions
	2016/17			2017/18			2018/19			2019/20			2020/21
	Actual			Actual			Actual			Actual			Actual
	$			$			$			$			$
Financial assets		46,819			43,161			44,685			48,354			58,375
Liabilities		(84,744	)		(85,149	)		(86,954	)		(93,639	)		(111,534	)
Net liabilities		(37,925	)		(41,988	)		(42,269	)		(45,285	)		(53,159	)
Non-financial assets		44,125			48,536			50,615			53,054			56,366
Accumulated surplus		6,200			6,548			8,346			7,769			3,207

Net liabilities increased by $7,874 million in 2020/21. Liabilities include deferred revenue of $12,185 million which represents unearned revenues and restricted contributions that will be recognized as revenue in future periods.

The financial measure of net liabilities has increased and investments in infrastructure have increased resulting in a decrease in accumulated surplus. The accumulated surplus of the province was $3,207 million at the end of 2020/21, indicating that the cumulative result of all past annual surpluses and deficits is positive, or that the province remains in a positive net financial position.

Non-financial Assets as a Portion of Liabilities

The chart provides an indication of the proportion of liabilities used to fund capital infrastructure as opposed to funding working capital requirements including accounts payable and other operating liabilities, as well as revenue deferred to future periods. Over the past five years, the relationship between non-financial assets and net liabilities has remained stable. In the last year the relationship between non-financial assets and net liabilities has narrowed as increases in liabilities exceeded increases in non-financial assets.

 

26	PROVINCE OF BRITISH COLUMBIA
	PUBLIC ACCOUNTS 2020/21

Financial Statement Discussion and Analysis Report

Net Liabilities to GDP

The net liabilities to GDP ratio provides an indication of the province’s ability to maintain existing programs and meet existing creditor requirements without increasing the debt burden on the economy as a whole.

The increased net liabilities to GDP reflects the impacts from the COVID-19 pandemic in 2020/21. Net liabilities include deferred revenue that will be recognized as revenue in future periods, and obligations to outside parties including accounts payable and debt.

 

Surplus (Deficit) to GDP

The annual surplus (deficit) to GDP ratio is an indicator of sustainability that compares the province’s financial results to the overall results of the economy.

Results in the positive range of the chart indicate that the economy is growing faster than net government spending. Results in the negative range of the chart reflect government spending on pandemic response and recovery programs.

 

PROVINCE OF BRITISH COLUMBIA	27
PUBLIC ACCOUNTS 2020/21

Financial Statement Discussion and Analysis Report

Total Provincial Debt

Total provincial debt is calculated differently than financial statement debt. Analysis of total provincial debt helps users to assess the extent of long-term liabilities and the government’s ability to meet future debt obligations.

	In Millions
	2016/17		2017/18		2018/19		2019/20		2020/21
	Actual		Actual		Actual		Actual		Actual
	$		$		$		$		$
Gross debt	66,089		65,371		65,864		71,516		86,257
Less: sinking fund assets	(1,087	)	(1,348	)	(752	)	(692	)	(492	)
Third party guarantees and non–guaranteed debt	835		896		850		1,337		1,335
Total provincial debt	65,837		64,919		65,962		72,161		87,100

When reporting to rating agencies, the province adds to its financial statement debt all debt guarantees and the debt directly incurred by self-supported Crown corporations, reduced by sinking fund assets. This balance is referred to as the total provincial debt.

Total provincial debt is $843 million higher than the amounts reported in the province’s financial statements after deducting sinking funds held to pay down the debt, and including guaranteed debt and the debt of self-supported Crown corporations.

Total provincial debt increased by $14,939 million in 2020/21 to support pandemic response and recovery programs and capital projects. The debt of self-supported Crown corporations and agencies increased for investments in power projects. Taxpayer-supported debt increased by $13,521 million due to $8,746 million for government operating requirements, and to fund capital projects in the education sector of $1,416 million, in BC Transportation Financing Authority of $1,128 million, in the health sector of $852 million, in social housing of $805 million, and other taxpayer-supported corporations and agencies of $574 million.

Taxpayer-supported debt to GDP

The ratio of taxpayer-supported debt to GDP is a key measure used by financial analysts and investors to assess a province’s ability to repay debt and is a key measure monitored by the bond rating agencies. An increasing ratio means that debt is growing faster than the growth of the economy as measured by GDP.

At the end of 2020/21, taxpayer-supported debt to GDP was 20.2%, which was higher than the budgeted 15.5%, after the stable trend from fiscal 2016/17 to fiscal 2019/20.

 

28	PROVINCE OF BRITISH COLUMBIA
	PUBLIC ACCOUNTS 2020/21

Financial Statement Discussion and Analysis Report

Strong Credit Rating

Reflecting the province’s fiscal performance, British Columbia has maintained a strong and stable credit rating with all three credit rating agencies. In 2020/21, Moody’s Investors Service Inc. gave the province a Aaa credit rating (2020: Aaa); Standard and Poor’s gave the province a AAA credit rating (2020: AAA); and Dominion Bond Rating Service gave the province a AA(high) credit rating (2020: AA(high)).

Credit Ratings March 31, 2021

Rating Agency1
	Moody’s Investors		Dominion Bond
Jurisdiction	Service Inc.	Standard and Poor’s	Rating Service
British Columbia2	Aaa	AAA	AA (high)
Alberta	Aa3	A	AA (low)
Saskatchewan	Aaa	AA	AA (low)
Manitoba	Aa2	A+	A (high)
Ontario	Aa3	A+	AA (low)
Quebec	Aa2	AA–	AA (low)
New Brunswick	Aa2	A+	A (high)
Nova Scotia	Aa2	AA–	A(high)
Prince Edward Island	Aa2	A	A
Newfoundland	A1	A	A (low)
Canada	Aaa	AAA	AAA

¹ The rating agencies assign letter ratings to borrowers. The major categories, in descending order of credit quality, are: AAA/Aaa; AA/Aa; A; BBB/Baa; BB/Ba; and B. The “1”, “2”, “3”, “high”, “low”, “-”, and “+” modifiers show relative standing within the major categories. For example, AA+ exceeds AA.

² On July 7, 2021, Standard and Poor’s lowered the province’s credit rating to AA+, with a stable outlook, because of impacts from the COVID-19 pandemic on fiscal results and debt.

A more comprehensive overview of provincial debt, including key debt indicators is located on pages 137–150.

Public Debt Charges to Revenue (the Interest Bite)

The public debt charges to revenue indicator is often referred to as the “interest bite”. This provides users with the percentage of the province’s revenue used to pay interest on debt. The ratio is sensitive to the cost of debt arising from either increasing interest rates or increasing debt, as well as decreases in revenue.

If an increasing proportion of provincial revenue is required to pay interest on provincial debt, less money is available to provide core public services. The interest bite has remained stable over the last five years. In 2020/21, the province spent 3.1 cents of each revenue dollar on interest on the provincial taxpayer-supported debt.

 

PROVINCE OF BRITISH COLUMBIA	29
PUBLIC ACCOUNTS 2020/21

Financial Statement Discussion and Analysis Report

Non–Hedged Foreign Currency Debt to Total Provincial Debt

The ratio of non–hedged foreign currency debt to total provincial debt shows the degree of vulnerability of a government’s public debt position to swings in exchange rates.

Non–hedged foreign currency debt directly offset by instruments in the same foreign currency are considered “natural hedges”. These amounts are excluded from the ratio.

In 2020/21, the province had the equivalent of CAD $285 million in non–hedged debt.

 

30	PROVINCE OF BRITISH COLUMBIA
	PUBLIC ACCOUNTS 2020/21

Financial Statement Discussion and Analysis Report

Economic Highlights

British Columbia’s economy declined by an estimated 3.8% in the 2020 calendar year, the fourth smallest rate among the provinces, according to preliminary GDP by industry data from Statistics Canada. The estimated 3.8% decline for British Columbia in 2020 is an improvement compared to the government’s Budget 2021 estimate of a 5.3% decline.

Real Gross Domestic Product in Calendar Year 2020

The decline in 2020 was almost entirely driven by service-producing industries, while goods-producing industries declined modestly.

Service–producing industries, which account for just over three-quarters of B.C.’s GDP, declined by 4.9% in 2020. Output in the arts, entertainment and recreation (down 39.6%), accommodation and food services (down 31.1%), transportation and warehousing (down 21.6%), and in the health care and social assistance sector (down 8.0%) were the main drivers in the decrease. In 2020, the real estate and rental and leasing sector and the finance and insurance sector increased by 4.1% and 2.5%, respectively.

B.C.’s goods–producing industries declined by 0.3% in 2020. A notable decrease in the manufacturing sector (down 7.1%) was largely offset by a 4.2% increase in the construction sector. The gain in construction was driven by large gains in the engineering construction subsector (up 18.8%), mainly related to activity in the oil and gas industry, while construction in the residential and non-residential buildings subsectors declined by 1.9% and 2.7%, respectively, in 2020. Meanwhile, smaller changes were observed in the utilities (up 2.7%), agriculture, forestry, fishing and hunting (down 2.7%) and mining, quarrying, and oil and gas extraction (up 0.6%) sectors.

 

Unemployment Rate

British Columbia’s annual unemployment rate was 8.9% in 2020, up from 4.7% in 2019. The unemployment rate in B.C. in 2020 was lower than the national unemployment rate of 9.5%. The average level of employment in B.C. decreased by 6.6% in 2020, following a 3.0% increase in 2019.

 

PROVINCE OF BRITISH COLUMBIA	31
PUBLIC ACCOUNTS 2020/21

Financial Statement Discussion and Analysis Report

Risks and Uncertainties

The government’s main exposure to risks and uncertainties arises from variables, which the government does not directly control. These include:

· assumptions underlying revenue and Crown corporation forecasts such as economic factors, commodity prices and weather conditions;

· the outcome of litigation, arbitration, and negotiations with third parties;

· potential changes to federal transfer allocations, cost-sharing agreements with the federal government and impacts on the provincial income tax bases arising from federal tax policy and budget changes;

· utilization rates for government services such as health care, children and family services, and income assistance;

· exposure to interest rate fluctuations, foreign exchange rates and credit risk; and

· changes in Canadian generally accepted accounting principles.

The following are the approximate effect of changes in some of the key variables on the surplus (deficit):

Key Fiscal Sensitivities
		Annual Fiscal Impact
Variable	Increase Of	($ millions)
Nominal GDP	1%	$150 to $250
Lumber prices (US$/thousand board feet)	$50	$125 to $1751
Natural gas prices (Cdn$/gigajoule)	25 cents	$40 to $602
US exchange rate (US cents/Cdn$)	1 cent	($25) to ($50)
Interest rates	1 percentage point	($156)
Debt	$500 million	($8) to ($10)

¹Sensitivity relates to stumpage revenue only.

²Sensitivities can vary significantly, especially at lower prices.

Although the government is unable to directly control these variables, strategies have been implemented to mitigate these risks and uncertainties. The development of taxation, financial and corporate regulatory policy to reinforce British Columbia’s position as an attractive place to invest and create jobs will help offset the increase in competition for investment as a result of globalization of economic and financial markets. As in previous years, the government applied a forecast allowance in the budget to account for risks to revenue, expenditure, Crown corporations’, school districts’, universities’, colleges’, institutes’, and health organizations’ (SUCH sector) forecasts. The use of forecast allowances recognizes the uncertainties in predicting future economic developments.

Risk management in relation to debt is discussed in Note 20 on page 74 of the Notes to the Consolidated Summary Financial Statements.

PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

This page intentionally left blank

Consolidated

Summary Financial Statements

Province of British Columbia

For the Fiscal Year Ended

March 31, 2021

 

PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

This page intentionally left blank

PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

Statement of Responsibility

for the Summary Financial Statements

of the Government of the Province of British Columbia

Responsibility for the integrity and objectivity of the Summary Financial Statements for the Government of the Province of British Columbia rests with the government. The Comptroller General prepares these financial statements in accordance with the Budget Transparency and Accountability Act (BTAA), which requires generally accepted accounting principles (GAAP) for senior governments in Canada, supported by regulations of Treasury Board under the BTAA. The fiscal year of the government is from April 1 to March 31 of the following year.

To fulfill its accounting and reporting responsibilities, the government maintains financial management and internal control systems. These systems give due consideration to costs, benefits and risks, and are designed to provide reasonable assurance that transactions are properly authorized by the Legislative Assembly, are executed in accordance with prescribed regulations and are properly recorded. This is done to maintain accountability of public money and safeguard the assets and properties of the Province of British Columbia under government administration. The Comptroller General of British Columbia maintains the accounts of British Columbia, a centralized record of the government’s financial transactions, and obtains additional information as required from ministries, Crown corporations, agencies, school districts, universities, colleges, institutes and health organizations to meet accounting and reporting requirements.

The Auditor General of British Columbia provides an independent opinion on the financial statements prepared by the government. The duties of the Auditor General in that respect are contained in section 11 of the Auditor General Act.

Annually, the financial statements are tabled in the legislature as part of the Public Accounts, and are referred to the Select Standing Committee on Public Accounts of the Legislative Assembly. The Select Standing Committee on Public Accounts reports to the Legislative Assembly with the results of its examination and any recommendations it may have with respect to the financial statements and accompanying audit opinions.

Approved on behalf of the Government of the Province of British Columbia:

/s/ Selina Robinson

SELINA ROBINSON

Chair, Treasury Board

PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

This page intentionally left blank

INDEPENDENT AUDITOR’S REPORT

To the Legislative Assembly of the Province of British Columbia

Qualified Opinion

I have audited the summary financial statements of the Government of the Province of British Columbia (Government) using my staff and resources. The Engagement Leader, Molly Pearce, CPA, CA is responsible for this audit and its performance. The summary financial statements of Government comprise the consolidated statement of financial position as at March 31, 2021, and the consolidated statements of operations, change in net liabilities and cash flow for the year then ended, and notes to the financial statements including a summary of significant accounting policies.

In my opinion, except for the effects of the matters described in the Basis for Qualified Opinion section of my report, the summary financial statements present fairly, in all material respects, the financial position of the Government as at March 31, 2021, and the results of its operations, change in its net liabilities, and its cash flows for the year then ended in accordance with Canadian Public Sector Accounting Standards.

Basis for Qualified Opinion

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my qualified opinion.

Deferral of revenues

Government’s accounting treatment for funds received from other governments and for externally restricted funds received from non-government sources is to initially record them as deferred revenue (a liability) and then recognize revenue in the statement of operations either on the same basis as the related expenditures occur or, in the case of funds for the purchase or construction of capital assets, to recognize revenue on the same basis as the related assets are amortized.

Under Canadian Public Sector Accounting Standards, Government’s method of accounting for contributions is only appropriate in circumstances where the funding meets the definition of a liability. Otherwise, the appropriate accounting treatment is to record contributions as revenue when they are received or receivable. In my opinion, certain contributions from others do not meet the definition of a liability, and as such Government’s method of accounting for those contributions represents a departure from Canadian Public Sector Accounting Standards.

LEGISLATIVE ASSEMBLY OF THE PROVINCE OF BRITISH COLUMBIA

Independent Auditor’s Report

This departure has existed since the inception of the standard, which applies to periods beginning on or after April 1, 2012. Had Government made an adjustment for this departure in the current year, the liability for deferred revenue as at March 31, 2021 would have been lower by $5,983 million, contribution revenue, surplus for the year and accumulated surplus would have been higher by $5,983 million, and net liabilities would have been lower by $5,983 million.

I conducted my audit in accordance with Canadian generally accepted auditing standards. My responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of my report. I am independent of Government in accordance with the ethical requirements that are relevant to my audit of the summary financial statements in Canada, and I have fulfilled my other ethical responsibilities in accordance with these requirements.

Key Audit Matters

Key audit matters are those matters that, in my professional judgment, were of most significance in my audit of the financial statements of the current period. These matters were addressed in the context of my audit of the financial statements as a whole, and in forming my opinion thereon, and I do not provide a separate opinion on these matters. In addition to the matter described in the Basis for Qualified Opinion section, I have determined the matters described below to be the key audit matters to be communicated in my report.

Consolidation of the Government’s financial statements

The Government’s summary financial statements include the financial information of both central government components and those organizations in the broader public sector controlled by Government. Note 1 – Significant Accounting Policies, explains what is included in the reporting entity (with reference to a list of organizations on pages 91 – 93) and the principles of consolidation.

The challenge is to understand what control means in the public sector. Control is determined by looking at the circumstances of each organization. An organization’s legal form does not determine whether an organization is included or excluded from the reporting entity. Canadian Public Sector Accounting Standards provides guidance that sets out various indicators that provide evidence of control at the financial statement reporting date. Once the determination of control has been made the type of government organization needs to be determined as this impacts the accounting policies applied in the consolidation of the financial information. The complexity of identifying all the entities that comprise the government reporting entity, along with the significant judgments required in the determination of control, as well as the significant judgments required in determination of the types of government organizations controlled have a pervasive impact on the financial statements. In addition, the complexity of the consolidation process itself creates a risk of fraud and error. For that reason, the consolidation of the Government’s financial statements has been identified as a key audit matter.

LEGISLATIVE ASSEMBLY OF THE PROVINCE OF BRITISH COLUMBIA

Independent Auditor’s Report

Audit procedures include evaluating the relationship between government and an organization. In some circumstances it is easy to determine the existence of control. In other cases, it is a matter of judgement to determine if indicators represent evidence of control. Throughout the year, as part of my audit procedures I scan media as well as Government announcements to identify new organizations, as well as organizations or legislative changes that may have changed an organization’s control profile. I look for indicators of control for each new and changed organization. I also enquire of management and obtain representations as to the completeness of the summary financial statement.

Once the government reporting entity organizations, or components, have been identified there are extensive procedures to ensure the preparation of the consolidated summary financial statements has resulted in accurate eliminations of all intra-organization balances and accurate disclosure of financial statement balances. My audit procedures for the consolidation process include: reviewing the audit work performed by component auditors, checking that figures used in the consolidation have been accurately extracted from the financial statements of the components, reviewing the disclosures in the component financial statements to ensure these are carried forward to the summary financial statements, reviewing the adjustments for any components have a different financial year end than the summary financial statements, and gathering evidence to support specific consolidation journal entries and verifying the compilation of the summary financial statements as a whole.

Accuracy of personal income taxation revenue

Personal income tax is Government’s largest taxation revenue stream, providing over $11.1 billion in revenue in fiscal 2021. Personal tax is included in Note 29 – taxation revenue and note 2 - measurement uncertainty provides disclosure on measurement uncertainty related to personal income tax revenue and provides a range for uncertainty of +/- $500 million. Personal income tax revenue in a fiscal year is derived from management estimates of personal income tax for two separate calendar years. For the fiscal year ending March 31, 2021, Government records nine months of revenue for calendar year 2020 and three months of revenue for calendar year 2021. However, the tax assessments for the 2020 calendar year will not be finalized until December 2021, and the 2021 tax assessments won’t be available until one year later. This means precise revenue figures from personal income tax cannot be determined until 21 months after the fiscal year-end date. As a result, Government estimates these revenues based on the best information available. The estimate is complex and includes several inputs and assumptions and as a result this has been identified as a key audit matter.

Government uses an economic forecast model to support its conclusions on two main assumptions underpinning a significant portion of its calendar year estimates: household income growth and elasticity. The latter, elasticity, is defined as the ratio of annual current year tax revenue growth to annual household income growth.

LEGISLATIVE ASSEMBLY OF THE PROVINCE OF BRITISH COLUMBIA

Independent Auditor’s Report

Other key areas included in the estimate are the impact of tax measures or other adjustments to consider significant events. In the current year, there was a one-time downward adjustment of $391 million due to the expectation that the impacts of COVID-19 would result in taxpayers moving to a lower tax bracket.

Actual calendar year results differ from Government’s estimates and result in prior year adjustments being accounted for in the current fiscal reporting period. These adjustments impact Government’s reported personal income tax revenue.

Audit work to address this key audit matter included assessing the appropriateness of the method used to make the estimate, performing a retrospective review to determine the accuracy of previous estimates made, ensuring the underlying data supporting management estimate is correct, testing the accuracy of management’s calculations supporting the estimate and developing a range estimate to assess managements estimate against. Audit procedures also included a review of the estimate for indications of management bias, an evaluation of the quality of the personal income tax revenue measurement uncertainty disclosure in the summary financial statements and management representation related to estimates was obtained.

An auditor’s specialist was engaged to assist with the audit of this complex estimate.

Impact of the COVID-19 pandemic relevant to the summary financial statements

The COVID-19 pandemic has had a significant impact on the province of British Columbia for fiscal year 2021. Government has considered the impact of COVID-19 on the summary financial statements. They have disclosed that the pandemic has increased measurement uncertainty as noted in Note 2. Government has also disclosed a broad statement related to COVID-19 in Note 40 – significant event. The COVID-19 pandemic has resulted in risks related to the operations and financial reporting processes of Government and for this reason it has been identified as a key audit matter.

Risks arising from the impacts of COVID-19 include:

· the valuation of investments, interest rates used to estimate long term liabilities, estimation of taxes owed to Government and the collection of other accounts receivable.

· the financial impact of the COVID-19 response measures implemented in 2021.

· Government’s way of working, including the operation of controls, has been impacted by COVID-19 as a result of many staff working remotely. There is inevitably an increase in risk due to the remote accessing of information technology systems.

Audit procedures to address the significant aspects of COVID-19 included meetings with Government during the year to understand the impacts of the pandemic to financial reporting and how it has impacted the significant estimates and judgements used in the preparation of the summary financial statements.

LEGISLATIVE ASSEMBLY OF THE PROVINCE OF BRITISH COLUMBIA

Independent Auditor’s Report

Though the audit places only limited reliance on the Government’s information technology control environment, in response to any incremental risk from remote working, audit procedures included obtaining understanding and reviewing any key changes to various Government information technology controls and financial process activities as part of my assessment of audit risks to consider where additional testing might be required.

The higher level of COVID-19 related spending increased the level of detailed audit testing done as well as adjusting substantive analytic procedures to take into consideration the factors that are directly related to pandemic revenues and expense. There was also increased scrutiny of transactions occurring directly before and after year end to ensure entries were recorded in the correct year. In addition, management representation related to the impact of COVID-19 on the financial statements was obtained.

Other Accompanying Information

Government is responsible for the information they include in the annual Public Accounts report.

My opinion on the summary financial statements does not cover other information accompanying the financial statements and, except for my independent auditor’s opinion on the debt-related statements, I do not express any form of assurance conclusion thereon.

In connection with my audit of the summary financial statements, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the summary financial statements or my knowledge obtained during the audit or otherwise appears to be materially misstated.

If, based on the work I have performed on the other information, I conclude that there is a material misstatement therein, I am required to report that fact in this auditor’s report. As described in the Basis for Qualified Opinion section above, I believe there are material misstatements in Government’s accounting for the deferral of revenues. I have concluded that the other information is materially misstated for the same reason with respect to the amounts or other items in the annual report affected by this departure from Canadian Public Sector Accounting Standards.

Responsibilities of Treasury Board for the Summary Financial Statements

The Treasury Board of British Columbia is responsible for the oversight of the financial reporting process including the approval of significant accounting policies. The Comptroller General of British Columbia (Comptroller General) is responsible for the preparation and fair presentation of the summary financial statements in accordance with the Budget Transparency and Accountability Act (BTAA), and for such internal control as the Comptroller General determines is necessary to enable the preparation of the summary financial statements that are free from material misstatement, whether due to fraud or error.

LEGISLATIVE ASSEMBLY OF THE PROVINCE OF BRITISH COLUMBIA

Independent Auditor’s Report

In preparing the summary financial statements, the Comptroller General is responsible for assessing Government’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting when the Government will continue its operations for the foreseeable future.

Auditor’s Responsibilities for the Audit of the Financial Statements

My objectives are to obtain reasonable assurance about whether the summary financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion in accordance with generally accepted accounting principles, being Public Sector Accounting Standards for senior governments in Canada. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement, when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decision of users taken on the basis of these financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, I exercise professional judgment and maintain professional skepticism throughout the audit. I also:

• Identify and assess the risks of material misstatement of the summary financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Government’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Comptroller General.

• Conclude on the appropriateness of the Comptroller General’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on Government’s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the summary financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor’s report. However, future events or conditions may cause Government to cease to continue as a going concern.

 

LEGISLATIVE ASSEMBLY OF THE PROVINCE OF BRITISH COLUMBIA

Independent Auditor’s Report

• Evaluate the overall presentation, structure and content of the summary financial statements, including the disclosures, and whether the summary financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

The audit of the summary financial statements is a group audit engagement. As such I also obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the summary financial statements. I am responsible for the direction, supervision and performance of the group audit and I remain solely responsible for my audit opinion.

I communicate with the Chair of Treasury Board regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.

I also provide the Chair of Treasury Board with a statement that I have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on my independence, and where applicable, related safeguards.

	/s/ Michael A. Pickup
Victoria, British Columbia, Canada	Michael A. Pickup, FCPA, FCA
July 16, 2021	Auditor General

 

PROVINCE OF BRITISH COLUMBIA	45
PUBLIC ACCOUNTS 2020/21

Summary Financial Statements

Consolidated Statement of Financial Position

as at March 31, 2021

			In Millions
	Note		2021			2020
				$			$
Financial Assets
Cash and cash equivalents				6,163			3,590
Temporary investments				397			395
Accounts receivable		3		5,971			5,165
Inventories for resale		4		71			68
Due from other governments		5		1,711			932
Due from self–supported Crown corporations and agencies		6		282			316
Equity in self–supported Crown corporations and agencies		7		9,623			6,515
Loans, advances and mortgages receivable		8		4,021			2,940
Other investments		9		3,343			2,973
Sinking fund investments		10		492			692
Loans for purchase of assets, recoverable from agencies		11		26,301			24,768
				58,375			48,354
Liabilities
Accounts payable and accrued liabilities		12		8,893			7,684
Employee future benefits		13		2,865			2,654
Due to other governments		14		623			436
Due to Crown corporations, agencies and trust funds		15		710			722
Deferred revenue		16		12,185			10,626
Employee pension plans		17		1			1
Taxpayer–supported debt		18		59,982			46,669
Self–supported debt		19		26,275			24,847
				111,534			93,639
Net assets (liabilities)		21		(53,159	)		(45,285	)
Non–financial Assets
Tangible capital assets		22		52,781			50,023
Restricted assets		23		2,003			1,931
Prepaid program costs		24		1,264			892
Other assets		25		318			208
				56,366			53,054
Accumulated surplus (deficit)		26		3,207			7,769
Measurement uncertainty		2
Contingent assets and contractual rights		27
Contingent liabilities and contractual obligations		28
Significant events		40

The accompanying notes and supplementary statements are an integral part of these consolidated financial statements.

Prepared in accordance with Canadian generally accepted accounting principles.

/s/ Carl Fischer

CARL FISCHER

Comptroller General

46	PROVINCE OF BRITISH COLUMBIA
PUBLIC ACCOUNTS 2020/21

Summary Financial Statements

Consolidated Statement of Operations

for the Fiscal Year Ended March 31, 2021

	In Millions
	2021						2020
	Estimates
	(Note 34)			Actual			Actual
	$			$			$
Revenue
Taxation (Note 29)		35,344			34,166			33,266
Contributions from the federal government		9,963			12,894			9,535
Fees and licences		4,667			4,329			5,572
Miscellaneous		3,798			3,136			3,838
Net earnings of self–supported Crown corporations and agencies (Note 7)		3,417			3,964			2,918
Natural resources (Note 30)		2,149			2,403			2,268
Investment income		1,247			1,264			1,263
		60,585			62,156			58,660
Expense (Note 31)
Health		24,285			25,605			23,449
Education		15,178			14,943			14,735
Social services		6,201			7,789			5,887
Natural resources and economic development		3,097			4,191			3,778
Interest		2,723			2,722			2,727
Other		2,633			2,841			2,501
Transportation		2,228			3,360			2,126
General government		1,896			3,915			1,653
Protection of persons and property		1,817			2,258			2,126
		60,058			67,624			58,982
Surplus (deficit) for the year before forecast allowance		527			(5,468	)		(322	)
Forecast allowance		(300	)
Surplus (deficit) for the year		227			(5,468	)		(322	)
Accumulated surplus (deficit)—beginning of year as restated (Note 26)					7,993			8,315
Accumulated surplus (deficit)—before other comprehensive income					2,525			7,993
Accumulated other comprehensive income from self–supported Crown corporations
and agencies (see page 105)—beginning of year					(224	)		31
Other comprehensive income from self–supported Crown corporations and agencies
(see page 105)					906			(255	)
Accumulated other comprehensive income from self–supported Crown
corporations and agencies (see page 105)—end of year					682			(224	)
Accumulated surplus (deficit)—end of year					3,207			7,769

The accompanying notes and supplementary statements are an integral part of these consolidated financial statements.

PROVINCE OF BRITISH COLUMBIA 47

PUBLIC ACCOUNTS 2020/21

Summary Financial Statements

Consolidated Statement of Change in Net Liabilities

for the Fiscal Year Ended March 31, 2021

	In Millions
	2021						2020
	Estimates1			Actual			Actual
	$			$			$
Surplus (deficit) for the year		227			(5,468	)		(322	)
Effect of change in tangible capital assets:
Acquisition of tangible capital assets		(7,126	)		(5,428	)		(4,772	)
(Gain) or loss on sale of tangible capital assets		(56	)		(7	)
Amortization of tangible capital assets		2,601			2,547			2,469
Disposals and valuation adjustments		50			130			109
		(4,531	)		(2,758	)		(2,194	)
Effect of change in:
Restricted assets		(59	)		(72	)		(97	)
Prepaid program costs		(1	)		(372	)		(105	)
Other assets		(1	)		(110	)		(43	)
		(61	)		(554	)		(245	)
Effect of self–supported Crown corporations’ and agencies’ other comprehensive
income		40			906			(255	)
(Increase) in net liabilities		(4,325	)		(7,874	)		(3,016	)
Net (liabilities)—beginning of year		(44,536	)		(45,285	)		(42,269	)
Net (liabilities)—end of year (Note 21)		(48,861	)		(53,159	)		(45,285	)

The accompanying notes and supplementary statements are an integral part of these consolidated financial statements.

¹The estimates amounts are from page 147 of the Budget and Fiscal Plan 2020/21–2022/23.

48 PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

Summary Financial Statements

Consolidated Statement of Cash Flow

for the Fiscal Year Ended March 31, 2021

	In Millions
	2021								2020
	Receipts		Disbursements			Net			Net
	$		$			$			$
Operating Transactions
Surplus (deficit) for the year1							(5,468	)		(322	)
Non–cash items included in surplus (deficit):
Amortization of tangible capital assets							2,547			2,469
Amortization of public debt deferred revenue and deferred charges							(202	)		(75	)
Concessionary loan adjustments (decrease)							(6	)		(4	)
(Gain) or loss on sale of tangible capital assets							(7	)
Valuation adjustment							189			251
Net earnings of self–supported Crown corporations and agencies							(3,964	)		(2,918	)
Temporary investments (increase) decrease							(2	)		36
Accounts receivable (increase)							(864	)		(59	)
Due from other governments (increase) decrease							(779	)		341
Due from self–supported Crown corporations and agencies decrease							34			177
Accounts payable and accrued liabilities increase							1,209			369
Employee future benefits increase							211			83
Due to other governments increase (decrease)							187			(108	)
Due to Crown corporations, agencies and funds (decrease) increase							(12	)		644
Employee pension plan (decrease)										(64	)
Items applicable to future operations increase (decrease)							969			(51	)
Contributions from self–supported Crown corporations and agencies							1,763			2,625
Cash (used for) derived from operations							(4,195	)		3,394
Capital Transactions
Tangible capital assets dispositions (acquisitions)		123		(5,428	)		(5,305	)		(4,719	)
Cash (used for) capital		123		(5,428	)		(5,305	)		(4,719	)
Investment Transactions
Investment in self–supported Crown corporations and agencies				(1	)		(1	)		(745	)
Loans, advances and mortgages receivable (issues)		391		(1,495	)		(1,104	)		(592	)
Other investments—net (increase) decrease				(372	)		(372	)		164
Restricted assets—net (increase)				(72	)		(72	)		(97	)
Sinking fund investments—net decrease		208		(37	)		171			74
Cash (used for) investments		599		(1,977	)		(1,378	)		(1,196	)
Sub–total cash (requirements)							(10,878	)		(2,521	)

PROVINCE OF BRITISH COLUMBIA 49

PUBLIC ACCOUNTS 2020/21

Summary Financial Statements

Consolidated Statement of Cash Flow—Continued

for the Fiscal Year Ended March 31, 2021

	In Millions
	2021								2020
	Receipts		Disbursements			Net			Net
	$		$			$			$
Sub–total cash (requirements) carried forward from previous page							(10,878	)		(2,521	)
Financing Transactions2
Public debt increase		42,217		(27,359	)		14,858			5,694
(Used for) purchase of assets, recoverable from agencies		10,296		(11,703	)		(1,407	)		(2,181	)
Cash derived from financing		52,513		(39,062	)		13,451			3,513
Increase in cash and cash equivalents							2,573			992
Cash and cash equivalents—beginning of year							3,590			2,598
Cash and cash equivalents—end of year							6,163			3,590
Cash and cash equivalents are made up of:
Cash							5,248			2,875
Cash equivalents							915			715
							6,163			3,590

¹Interest received during the year was $1,244 million (2020: $1,213 million). Interest paid during the year was $2,677 million (2020: $2,711 million). Interest received includes interest income from the Statement of Operations in the amount of $1,264 million (2020: $1,263 million) plus the change in accrued interest receivable in the amount of $(20) million (2020: $(50) million). Interest paid includes interest expense from the Statement of Operations in the amount of $2,722 million (2020: $2,727 million) plus the change in accrued interest payable in the amount of $(45) million (2020: $(16) million).

²Financing transaction receipts are from debt issues and disbursements are for debt repayments.

The accompanying notes and supplementary statements are an integral part of these consolidated financial statements.

50 PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021

1. Significant Accounting Policies

(a) BASIS OF ACCOUNTING

The government’s Summary Financial Statements are prepared in accordance with the Budget Transparency and Accountability Act (BTAA), which requires generally accepted accounting principles (GAAP) for senior governments in Canada, supported by regulations of Treasury Board under the BTAA.

(b) REPORTING ENTITY

These financial statements include the accounts of organizations that meet the criteria of control (by the province) as established under Canadian Public Sector Accounting Standards. The reporting entity also includes government partnerships.

A list of organizations included in these consolidated financial statements may be found on pages 91 – 93. Trusts administered by government or government organizations are excluded from the reporting entity.

(c) PRINCIPLES OF CONSOLIDATION

Taxpayer–supported Crown corporations, agencies, and the school districts, universities, colleges, institutes, health organizations (SUCH) and the Consolidated Revenue Fund (CRF) are consolidated using the full consolidation method. The government’s interests in government partnerships are recorded on a proportional consolidation basis. Self–supported Crown corporations, agencies, entities and government business partnerships are consolidated using the modified equity basis of consolidation.

Organizations are reviewed annually to determine whether they can be expected to meet the definition of self–supported over their normal course of operations. In determining whether organizations will be able to maintain their operations and meet their liabilities from revenues received from sources outside of the government reporting entity, the following factors are considered as they apply:

i) The organization’s history of maintaining its operations and meeting its liabilities;

ii) Whether the organization would continue to maintain its operations and meet its liabilities without relying on sales to, or subsidies in cash or kind from, the government reporting entity;

iii) Past, present and future economic conditions within which the organization operates; and

iv) Whether the organization has realistic and specific plans that show how it expects to be able to maintain its operations and meet its liabilities in the future.

The status of self–supported organizations is not changed in response to financial results which are reasonably expected to be temporary in nature. Organizations are classified as self–supported on establishment and during a start up period if they are reasonably expected to meet the definition of self–supported in their normal course of operations.

The definitions of these consolidation methods can be found on page 151.

Adjustments are made for Crown corporations, agencies and entities whose fiscal year ends are different from the government’s fiscal year end of March 31. These Crown corporations, agencies and entities consist of the British Columbia Assessment Authority (December 31) and all school districts (June 30).

PROVINCE OF BRITISH COLUMBIA 51

PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

1. Significant Accounting Policies—Continued

Statistics Canada’s Financial Management System for Government Statistics provides the guidance for establishing segment disclosure and function reporting. The Consolidated Statement of Financial Position by Sector and the Consolidated Statement of Operations by Sector are found on pages 94 – 101. These statements include the operations of the CRF, taxpayer–supported Crown corporations and agencies, and SUCH sector organizations. Each taxpayer–supported Crown corporation, agency and SUCH sector organization is assigned to a sector based on its major activity. Sectors are identified using functions. The nature of each function is described in greater detail under Note 1(d) Classification by Sector.

(d) SPECIFIC ACCOUNTING POLICIES

Classification by Sector

The province uses the following sectors: health, education, social services, natural resources and economic development, protection of persons and property, transportation, general government, debt servicing and other.

The health sector includes the provincial health care system. It includes providing medical, hospital and preventive care, and other health–related services such as laboratories and diagnostic facilities.

The education sector includes education services. It includes elementary, secondary, and post–secondary schools. It also includes other education services such as programs to upgrade the skills of individuals and to provide apprenticeship training.

The social services sector includes outlays that the province made to help disadvantaged individuals and families overcome obstacles and circumstances which threaten their well–being. It includes counselling and rehabilitation services, transfer payments to individuals who are unable to lead a normal life due to a physical or mental disability, and services and goods provided by the province to the elderly.

The natural resources and economic development sector includes the promotion and development of industries, as well as the development and conservation of the natural resources on which these industries depend. It includes regulating the various industrial activities that are carried on in the province, as well as research related to resource conservation.

The protection of persons and property sector includes the protection of persons and property from negligence, abuse and crime. It includes policing, operating and maintaining courts of law and correctional facilities. It includes services related to new immigrants. It also includes negotiations to resolve land, resources, governance and jurisdictional issues with First Nations.

The transportation sector includes the operation and maintenance of transportation systems. This includes highway infrastructure, other road systems and public transit.

The general government sector is composed of three sub–categories. These are general administration, executive and legislature, and other general government services. General administration includes central accounting, budgeting, tax administration and collection, and other centralized administrative services. Executive and legislature includes the political, law enactment and constitutional activities of the province.

The debt servicing sector represents the financial impacts of activities related to management of public debt.

The other sector consists of activities, such as housing and culture, which cannot be allocated to any of the specifically described sector classifications.

Revenue

All revenue is recorded on an accrual basis. For corporate income tax, the cash received from the federal government is used as the basis for estimating the tax revenue. Annual tax revenues also include adjustments between the estimated revenues of previous years and actual amounts, as well as revenues from reassessments relating to prior years. Revenues do not include estimates of unreported taxes, or the impact of future reassessments that cannot be reliably determined.

52	PROVINCE OF BRITISH COLUMBIA
	PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

1. Significant Accounting Policies—Continued

Personal income tax revenue is accrued in the year earned based on estimates of household and taxable income. The revenue reported in the fiscal year is based on a pro-ration of the calendar year estimates.

Direct taxes, such as sales, fuel, carbon and tobacco, are recorded during the period in which the taxable event occurs and when authorized by legislation. Property tax revenues are recorded based on a pro–ration of actual property tax billings for each of the calendar years that comprise the fiscal year.

Taxes payable by the province in the normal course of operations are reported on the gross basis, as are the related expenses.

Tax concessions are accrued on the same basis as the associated tax revenues and reduce gross taxation revenue, but are not considered valuation allowances.

Royalty revenue is reported net of allowable credits integral to determining the amount of royalty. Amounts are reported as revenue when received or receivable.

Government transfers are recognized as revenues in the period during which the transfer is authorized and any eligibility criteria are met. Government transfers are deferred if they are restricted through stipulations for specific programs such as health transfers.

Expense

The cost of all goods consumed and services received during the year is expensed. Interest expense includes debt servicing costs such as amortization of discounts and premiums, foreign exchange gains and losses, and issue costs.

Pension expense is calculated as the cost of pension benefits earned by employees during the year, interest on the pension benefits liability, net of pension plan assets, and amortization of the government’s share of any experience gains or losses, less contributions made by members. The estimated total cost of government’s share of plan amendments related to past service is expensed in the year the plan is amended.

Government transfers include grants, entitlements and transfers under agreements, as defined in the definitions on page 152. Government transfers are recognized as expenses in the period in which the events giving rise to the transfer occurred, as long as the transfer is authorized, eligibility criteria have been met and a reasonable estimate of the amount can be made.

Assets

Assets are recorded to the extent they represent cash and claims upon outside parties, items held for resale to outside parties, prepaid expenses, deferred charges or tangible capital assets acquired as a result of events and transactions prior to year end.

Financial Assets

Cash and cash equivalents include cash on hand, demand deposits and short–term highly liquid investments that are readily convertible to known amounts of cash. These are subject to an insignificant risk of changes in value. These short–term investments generally have a maturity of three months or less and are held for the purpose of meeting short–term cash commitments rather than for investing.

Temporary investments and Warehouse Program investments include short–term investments recorded at the lower of cost or market value. The fair values of short–term investments approximate their carrying values because of the short–term maturity of these instruments. Warehouse Program investments are short–term investments related to specific borrowings in advance of requirements under the Warehouse Borrowing Program.

Inventories for resale are expected to be sold within one year and include property that has been purchased, or for which development costs have been incurred, and that is held for ultimate resale or lease to outside parties. Inventories for resale are recorded at the lower of cost or net realizable value.

PROVINCE OF BRITISH COLUMBIA	53
PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

1. Significant Accounting Policies—Continued

Equity in self–supported Crown corporations and agencies represents the province’s investment (including long–term advances) in those self–supported Crown corporations and agencies at cost, increases/decreases in the investees’ net assets, and other comprehensive income.

Loans for purchase of assets recoverable from agencies are recorded at maturity value, less unamortized premium or discount, deferred foreign exchange gains or losses and sinking fund balances. Premium/discount is amortized on a constant yield basis.

Loans and advances are recorded at cost less adjustment for any prolonged impairment in value. Mortgages receivable are recorded at the principal amount less valuation allowance, are secured by real estate and are repayable over varying terms. Concessionary loans and mortgages are recorded at net present value at issue, and related present value discounts are expensed. Valuation allowances are made when collectibility is considered doubtful. Interest is accrued on loans receivable only when collection is certain. Otherwise, it is recognized on the cash basis.

Other investments are recorded at the cost of acquisition, which may be adjusted by attributed income. Valuation adjustments are made when the value of investments is impaired.

Sinking fund investments are cash and marketable securities held specifically for the purpose of repaying outstanding debt at maturity. Sinking fund investments are recorded at the cost of acquisition.

Tangible Capital Assets

Tangible capital assets are recorded at historical cost, plus asset retirement obligations, less accumulated amortization. The recorded cost, less the residual value, is generally amortized over the estimated useful lives of the assets on a straight–line basis.

All significant tangible capital assets of government organizations and operations have been capitalized. Intangible assets and items inherited by right of the Crown, such as forest, water and mineral resources, are not recognized in these financial statements. Crown land is capitalized at a nominal value of one dollar.

The value of collections (e.g. artifacts, specimens and documents) has been excluded from the Statement of Financial Position. When collections are purchased, these items are expensed.

Liabilities

All liabilities are recorded to the extent they represent claims payable to outside parties as a result of events and transactions prior to year end. This includes probable losses on loan guarantees issued by the province, contingent liabilities (when it is likely a liability exists and the amount of the liability can be reasonably determined on an individual or portfolio basis) and unfunded pension liabilities. Liabilities are not recorded for tax concessions or royalty credits which are integral in determining the amount of revenue.

Guaranteed debt includes guarantees by the Minister of Finance, made through specific agreements or legislation, to repay promissory notes, bank loans, lines of credit, mortgages and other securities. Loss provisions on guaranteed debt are recorded when it is likely that a loss will occur. The amount of the loss provision represents the best estimate of future payments less recoveries. The loss provision is recorded as a liability and an expense in the year determined and is adjusted as necessary to ensure it equals the expected payout of the guarantee.

54	PROVINCE OF BRITISH COLUMBIA
	PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

1. Significant Accounting Policies—Continued

Employee Pension Plans

The province accounts for employee pension plans by recognizing a liability and an expense in the reporting period in which the employee has provided service. The amount is calculated using the accrued benefit actuarial cost method. Where plans are in a net asset position and Joint Trusteeship Agreements restrict access to the assets, the province records the value of plan net assets as nil. The province records a liability for its share where plans are in a net obligation position. Changes in net liabilities/assets, which arise as a result of actuarial gains and losses, are amortized on a straight–line basis over the average remaining service period of employees active at the date of the adjustments. Past service costs from plan amendments are recognized in full in the year of the amendment.

Unfunded pension liabilities of the Members of the Legislative Assembly Superannuation Account represent the terminal funding that would be required from the province for the difference between the present value of the obligations for future benefit entitlements and the amount of funds available in the account.

Public Debt

Public debt represents the direct debt obligations of the Province of British Columbia, including borrowings incurred for government operating purposes, the acquisition of capital assets, re–lending to authorized government bodies and borrowings in advance of future requirements under the Warehouse Borrowing Program. Public debt consists of short–term promissory notes, notes, bonds and debentures, bank loans, capital leases and mortgages payable. These obligations are recorded at principal less unamortized premium or discount and unrealized foreign exchange gains or losses.

Public debt is reported under two categories:

(i) Taxpayer–supported debt—includes direct debt used for government operating and capital purposes, the debt of those Crown corporations, agencies and SUCH sector entities who require an operating or debt servicing subsidy from the provincial government, and the debt of an entity that is fully consolidated within these financial statements.

(ii) Self–supported debt—includes the portion of debt of self–supported organizations and entities that has been borrowed through the government’s fiscal agency loan program. It does not include all debt of self–supported organizations as these entities are consolidated on the modified equity basis. Self–supported organizations fully fund their operations and debt from revenue generated through the sale of goods and/or services at commercial rates to buyers that are outside the government reporting entity. Self–supported debt includes debt of the Warehouse Borrowing Program.

Debt premium/discount is amortized on a constant yield basis. Unamortized premium/discount on bonds called and refinanced is amortized over the remaining life of the old debt or the life of the new debt, whichever is shorter.

Foreign Currency Translation

Monetary assets and liabilities denominated in foreign currencies are translated to Canadian dollars at the exchange rate prevailing at year end. Foreign currency transactions are translated at the exchange rate prevailing at the date of the transaction unless hedged by forward contracts that specify the rate of exchange. Adjustments to revenue or expense transactions arising as a result of foreign currency translation are credited or charged to operations at the time the adjustments arise. Unrealized foreign currency gains and losses on long–term, fixed–term monetary assets and liabilities are reported as a component of sinking funds, public debt and loans for purchase of assets recoverable from agencies, and amortized over the remaining terms of the related items on a straight–line basis. Non–monetary assets and liabilities are translated at historical rates of exchange.

PROVINCE OF BRITISH COLUMBIA	55
PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

1. Significant Accounting Policies—Continued

Derivative Financial Instruments

The province is a party to financial instruments with off–balance sheet risk due to fluctuations in foreign currency exchange rates, interest rate fluctuations and counterparty default on financial obligations. The province does not use derivative financial instruments for speculative purposes. Off–balance sheet position data is given in the form of nominal principal amounts outstanding. Amounts earned and expenses incurred under swaps are recognized and offset against the related interest expense. Gains and losses on terminated derivative contracts are deferred and amortized over the remaining term of the contract or the term of the related debt.

Other Comprehensive Income

Any recognition of other comprehensive income for self–supported Crown corporations has been reflected in the equity in self–supported Crown corporations and agencies, and in the accumulated surplus (deficit).

Asset Retirement Obligations

The province recognizes asset retirement obligations where a reasonable estimate of the fair value of the obligation and the future settlement date of the retirement of the asset can be determined. The associated retirement costs are capitalized as part of the assets’ carrying value and amortized over the assets’ useful lives. Legal liabilities may exist for the removal and disposal of asbestos within buildings that will undergo major renovations or demolition. The fair value of the liability for asbestos removal or disposal will be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made.

2. Measurement Uncertainty

The preparation of financial statements requires the province to make estimates and assumptions that affect the amounts of assets, liabilities, revenues and expenses during the reporting period. Uncertainty in the determination of these amounts is known as measurement uncertainty.

Some of the more significant estimates used in these financial statements affect the accrual of tax revenues, Canada Health Transfer and Canada Social Transfer entitlements, obligations for pension obligations and other employee future benefits, accruals for environmental obligations, future payments related to contingent liabilities, and valuation allowances for loans, investments and advances. Actual results could differ from estimates. For many common financial statement items, such as accounts payable and allowances for doubtful accounts, measurement uncertainty is inherent but inestimable.

A provision for environmental clean–up is included in accounts payable and accrued liabilities. The provision is subject to a high degree of measurement uncertainty because the existence and extent of contamination, the responsibility for clean–up, and the timing and cost of remediation cannot be reliably estimated in all circumstances. The degree of measurement uncertainty resulting from the estimation of the provision cannot be reasonably determined. Environmental clean–up disclosure is included in Note 28.

56	PROVINCE OF BRITISH COLUMBIA
	PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

2. Measurement Uncertainty—Continued

The amount of personal income tax attributable to the year can change as a result of changes in the underlying revenue assumptions, such as household income growth and tax base growth, and as a result of tax assessments and reassessments. The amount of corporate income tax attributable to the tax year can change as a result of tax assessments and reassessments in subsequent years. Tax transfer expenses related to refundable tax credits attributable to the year are also impacted by both personal income tax and corporate income tax assessments and reassessments. The variability of the final amounts attributable to the year cannot be reasonably determined.

Estimates are based on the best information available at the time of preparation of the financial statements and are reviewed annually to reflect new information as it becomes available. Certain estimates used in these financial statements may be subject to measurement uncertainty due to the COVID–19 pandemic (see Note 40). The amount of variability cannot be reasonably determined at this time.

Measurement uncertainty exists in these financial statements, as identified in the table below, for items with a variability of over $10 million:

	Actual1				In Millions
	Amount		Measurement		Uncertainty		Range
Program Area	Recorded		Minimum		Maximum		Minimum			Maximum
	$		$		$		$			$
Liabilities
Accounts Payable and Accrued Liabilities
Litigation and Arbitration		185		155		230		(30	)		45
Crime Victim Assistance Program		173		163		183		(10	)		10
Silviculture Liability		181		163		199		(18	)		18
Employee Leave Entitlements		411		398		428		(13	)		17
Variability arises from uncertainty of the outcomes or the use of estimates.
Revenue
Taxation
Personal Income Tax		11,118		10,618		11,618		(500	)		500
Contributions from the Federal Government
Canada Health Transfer payments2		5,671		5,629		5,713		(42	)		42
Canada Social Transfer payments2		2,035		2,020		2,050		(15	)		15
Expense (Note 31)
Government Transfers
Tax Transfers		2,358		2,158		2,558		(200	)		200

Variability is based on the potential differences between the estimates for the economic factors used in calculating the accruals and actual economic results.

¹Actual amount recorded for each program area may not represent the entire amount in the financial statement line item.

²Canada Health Transfer and Canada Social Transfer payments are transfers from the federal government based on the provincial share of national population figures.

PROVINCE OF BRITISH COLUMBIA	57
PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

3. Accounts Receivable

	In Millions
	2021			2020
	$			$
Accounts receivable		3,679			3,250
Taxes receivable		2,734			2,421
Accrued interest		357			337
		6,770			6,008
Provision for doubtful accounts		(799	)		(843	)
		5,971			5,165

4. Inventories for Resale

	In Millions
	2021		2020
	$		$
Properties		13		9
Miscellaneous		58		59
		71		68

Inventories for resale are charged to the statement of operations when sold. During the year, the total cost of sales was $94 million (2020: $156 million) including the effect of write–downs of $2 million (2020: $1 million). Write–downs occurred due to obsolete materials no longer used, damaged goods, and reductions in the market value of goods.

5. Due from Other Governments

	In Millions
	2021		2020
	$		$
Government of Canada:
Current		1,632		866
Provincial governments:
Current		21		19
Local governments:1
Current		55		44
Long–term		3		3
		1,711		932

¹Local governments are municipal units established by the provincial government which include regional and metropolitan municipalities, cities, towns, townships, districts, rural municipalities and villages.

58 PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

6. Due from Self–supported Crown Corporations and Agencies

	In Millions
	2021		2020
	$		$
British Columbia Liquor Distribution Branch		94		100
UBC Properties Investments Ltd		71		54
British Columbia Lottery Corporation		48		69
Columbia Power Corporation		47		61
British Columbia Hydro and Power Authority		10		10
Vancouver Island Technology Park Trust		7		6
Heritage Realty Properties Ltd		4		3
Great Northern Way Campus Trust		1		1
SFU Community Trust				10
Miscellaneous				2
		282		316

See Statement of Financial Position for Self–supported Crown Corporations and Agencies on pages 102 – 103 for details.

7. Equity in Self–supported Crown Corporations and Agencies

	In Millions
	2021											2020
						Other
			Unremitted			Comprehensive
	Investments		Earnings			Income			Total			Total
	$		$			$			$			$
British Columbia Hydro and Power Authority		20		6,300			(19	)		6,301			5,588
Insurance Corporation of British Columbia				1,132			730			1,862			(561	)
Columbia Power Corporation		26		160						186			177
British Columbia Lottery Corporation				(25	)		(24	)		(49	)		(32	)
		46		7,567			687			8,300			5,172
Self–Supported Subsidiaries1
Columbia Basin Trust joint ventures2		941		30						971			981
British Columbia Railway Company3		107		126			(7	)		226			215
Great Northern Way Campus Trust4		72		(19	)					53			51
Real Estate Errors and Omissions Insurance Corporation5				29			2			31			25
UBC Properties Investments Ltd				30						30			47
SFU Community Trust				7						7			12
Vancouver Island Technology Park Trust6		1		1						2			2
Heritage Realty Properties Ltd6													1
Miscellaneous				3						3			9
		1,121		207			(5	)		1,323			1,343
		1,167		7,774			682			9,623			6,515

PROVINCE OF BRITISH COLUMBIA 59

PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

7. Equity in Self–supported Crown Corporations and Agencies—Continued

	In Millions
	2021											2020
						Other
			Unremitted			Comprehensive
	Investments		Earnings			Income			Total			Total
	$		$			$			$			$
Change in Equity in Self–supported
Crown Corporations and Agencies
Balance–beginning of year		46		5,342			(216	)		5,172			5,105
Increase (decrease) in other comprehensive income							903			903			(254	)
Net earnings of self–supported Crown corporations and agencies				3,853						3,853			2,826
Dividends				(1,484	)					(1,484	)		(2,258	)
Adjustments to dividends				(144	)					(144	)		(247	)
Balance—end of year		46		7,567			687			8,300			5,172
Self–Supported Subsidiaries1
Balance–beginning of year		1,120		231			(8	)		1,343			612
Prior period adjustments													15
Balance–beginning of year restated		1,120		231			(8	)		1,343			627
Increase (decrease) in investment		1								1			745
Increase (decrease) in other comprehensive income							3			3			(1	)
Net earnings of self–supported Crown corporations and agencies				111						111			92
Dividends				(111	)					(111	)		(71	)
Transfers (to) from deferred revenue				(24	)					(24	)		(49	)
Balance–end of year		1,121		207			(5	)		1,323			1,343
		1,167		7,774			682			9,623			6,515

¹Self–supported subsidiaries are non–core government business enterprises that are consolidated under the modified equity method by taxpayer–supported organizations.

²Brilliant Power Corporation, Brilliant Expansion Power Corporation, Arrow Lakes Power Corporation and Waneta Expansion Power Corporation are jointly controlled with Columbia Power Corporation. Columbia Power Corporation’s equity investment is included as an integral component of Columbia Power Corporation.

³A subsidiary of BC Transportation Financing Authority.

⁴Great Northern Way Campus Trust is owned 25% each by Emily Carr University of Art & Design, British Columbia Institute of Technology, The University of British Columbia, and Simon Fraser University.

⁵A subsidiary of the Real Estate Council of British Columbia.

⁶Subsidiaries of the University of Victoria.

See Statement of Financial Position for Self–supported Crown Corporations and Agencies and Summary of Results of Operations and Statement of Equity for Self–supported Crown Corporations and Agencies on pages 102 – 105 for details.

60 PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

8. Loans, Advances and Mortgages Receivable

	In Millions
	2021			2020
	$			$
Loans and Advances
Land tax deferment loans		1,492			1,320
BC student loans		1,064			1,017
Construction loans to social housing projects		938			594
Note receivable		678
Miscellaneous		151			288
		4,323			3,219
Provision for doubtful accounts		(321	)		(301	)
		4,002			2,918
Mortgages Receivable
Reconstruction Program		20			23
Provision for doubtful accounts		(1	)		(1	)
		19			22
		4,021			2,940

The Land Tax Deferment Program allows eligible owners to defer payment of all, or a portion of, annual property taxes due on principal residences. Eligible individuals are either 55 years of age or older, a surviving spouse, a person with a disability, or an owner who is financially supporting, at the time of application, a dependent child. The program for individuals 55 years of age or older, a surviving spouse, or a person with a disability, requires 25% equity in the home. The program for families with dependent children requires 15% equity in the home. Simple interest is charged on the deferred taxes at a rate set by the Minister of Finance. This rate will not exceed the prime lending rate of the principal banker to the government and there is a different interest rate between the two programs. The deferred taxes, plus any administration fees or outstanding interest, must be repaid before the residence can be legally transferred to a new owner, other than directly to a surviving spouse or adding a current spouse to title. Land Tax Deferment Loans are secured by registered charge on title.

The BC Student Loan Program provides funding in the form of interest–free repayable loans to students for post secondary education leading toward a credential. Amortization of the loans is set on repayment commencement by the borrower. Most periods are 114 months in length but borrowers can extend to a maximum of 174 months if minimum payment requirements have been met. Defaulted loans are due on demand. The Ministry of Finance also administers defaulted student loans issued by financial institutions under a guaranteed or a risk sharing agreement with the province.

Construction loans are provided by British Columbia Housing Management Commission (BCHMC), a taxpayer–supported Crown corporation and an approved lender under the National Housing Act. BCHMC provides construction loans for societies that are building approved projects under social housing programs. Interest is payable at the province’s weighted average borrowing rate for short–term funds, plus administration costs. Loans are repaid at substantial completion of each project from financing arranged with private lenders.

The note receivable is due to a sale of property by Providence Health Care Society.

Miscellaneous loans issued by University of British Columbia include matured unsecured promissory notes (2020: $78 million) issued to UBC Properties Trust, and housing and other loans receivable of $36 million (2020: $26 million) issued in accordance with University’s Housing Action Plan, bearing interest at the Canada Revenue Agency’s prescribed interest rate, maturing at 15 or 30 years. Miscellaneous loans include commercial loans of $26 million (2020: $34 million) issued by Columbia Basin Trust bearing interest of nil to 7.50% maturing by 2045 and loans of $20 million (2020: $21 million) issued by University of Victoria to subsidiary government business enterprises bearing interest of 5.13% to 7.45% maturing by 2030.

PROVINCE OF BRITISH COLUMBIA 61

PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

8. Loans, Advances and Mortgages Receivable—Continued

The Reconstruction Loan Program was established in 1998 under the Homeowner Protection Act to provide financial assistance to British Columbians who own homes damaged by premature building envelope failure and have limited ability to secure financing to pay for necessary remediation work. The financial assistance includes interest free loans as well as guarantees and interest subsidies of those loans provided by lenders outside of the government reporting entity. No new applicants under the program were being accepted after July 31, 2009. Financial assistance is secured by registered mortgages.

9. Other Investments

	In Millions
	2021		2020
	$		$
Pooled investment portfolios		2,006		1,747
Equity investments		385		299
Municipal, corporate and other bonds		227		233
Provincial government bonds		80		80
British Columbia Ferry Services Inc		75		75
Commercial loans and investments		11		11
Government of Canada bonds		8		12
Miscellaneous		551		516
		3,343		2,973

Pooled investment portfolios consist mainly of units in various funds of the British Columbia Investment Management Corporation. These funds’ investments consist primarily of debt and equity holdings of privately held companies. Pooled investment portfolios have a market value of $2,426 million (2020: $1,995 million).

Equity investments have a market value of $766 million (2020: $376 million). They include investments in Canadian, United States (U.S.) and international equity markets.

Municipal, corporate and other bonds have a market value of $266 million (2020: $233 million) with yields ranging from 0.18% to 11.75%. Maturity dates range from April 13, 2021 to May 15, 2067.

Provincial bonds of various provinces have a market value of $83 million (2020: $85 million), with yields ranging from 0.23% to 7.60%. Maturity dates range from June 1, 2021 to December 2, 2051.

As part of a secured debenture amendment and preferred share surrender agreement dated May 23, 2003, the province exchanged its interest in British Columbia Ferry Corporation for 75,477 preferred shares in British Columbia Ferry Services Inc. These non–voting preferred shares are valued at $1,000 per share and entitle the province to a fixed cumulative dividend at a rate of 8% of the issue price.

Commercial loans and investments are recorded at the lower of cost of acquisition adjusted by attributed income and market value. Commercial loans and investments include Columbia Basin Trust’s $11 million (2020: $11 million) investment in power developments and other investments.

Government of Canada bonds have a market value of $7 million (2020: $12 million), with yields ranging from 0.17% to 5.75%. Maturity dates range from June 15, 2021 to December 1, 2064.

Miscellaneous investments consist of other pooled funds as well as various forms of income securities, notes and treasury bills. The market value of miscellaneous investments is $587 million (2020: $521 million).

62 PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

10. Sinking Fund Investments

	In Millions
	2021		2020
	$		$
Sinking fund investments related to taxpayer–supported debt		236		445
Sinking fund investments related to self–supported debt		256		247
		492		692

	In Millions
	2021		2020
	$		$
Provincial government bonds		463		456
Pooled investment portfolios		24		29
Local government bonds		5		5
Miscellaneous				202
		492		692

Provincial bonds of various provinces have a market value of $545 million (2020: $496 million), with yields ranging from 0.11% to 3.37%. Maturity dates range from April 1, 2021 to March 5, 2050.

Pooled investment portfolios have a market value of $24 million (2020: $29 million). These pooled investment portfolios consist of units in the British Columbia Investment Management Corporation’s bond funds, which mainly consist of various governments’ bonds and short–term unitized funds that hold money market instruments.

Local government bonds have a market value of $6 million (2020: $6 million), with yields of 0.63%. Maturity date is November 30, 2023. Local government bonds mainly consist of debt issued by the Municipal Finance Authority of British Columbia.

Miscellaneous investments have a market value of nil (2020: $202 million).

Sinking fund investments related to self–supported debt include Province of British Columbia bonds with a carrying value of $102 million (2020: $139 million).

11. Loans for Purchase of Assets, Recoverable from Agencies

	In Millions
	2021		2020
	$		$
British Columbia Hydro and Power Authority		24,876		23,316
Columbia Basin Trust joint ventures1		969		990
Columbia Power Corporation		271		277
British Columbia Lottery Corporation		180		180
Improvement districts		5		5
		26,301		24,768

¹Columbia Basin Trust joint ventures with Columbia Power Corporation (Brilliant Power Corporation, Brilliant Expansion Power Corporation, Arrow Lakes Power Corporation, and Waneta Expansion Power Corporation).

PROVINCE OF BRITISH COLUMBIA 63

PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

12. Accounts Payable and Accrued Liabilities

	In Millions
	2021		2020
	$		$
Accounts payable		4,670		3,805
Other accrued estimated liabilities1		3,510		3,211
Accrued interest on debt		713		668
		8,893		7,684

¹Includes pending litigation, provision for guaranteed debt payout and other miscellaneous accrued claims as disclosed in Note 28.

13. Employee Future Benefits
	In Millions
	2021		2020
	$		$
Vacation, compensatory time off, sick bank		1,388		1,229
Retirement allowance		773		762
Long–term disability		345		345
Post–retirement benefits		238		203
Worker compensation benefits		121		115
		2,865		2,654

There are a variety of employee benefit plans across the reporting entity with different terms that provide for post–employment benefits, compensated absences and termination benefits. The cost of benefits is recognized in the periods the employee provides service. A liability is recognized for benefits that do not vest or accumulate when an event that obligates the province to pay benefits occurs.

The retirement allowance includes actuarially determined liabilities. As at March 31, 2021, unamortized actuarial losses (gains) from actuarial estimates performed every three years were $(11) million (2020: $(28) million). During the year, the amount of benefits paid was $48 million (2020: $53 million).

Worker compensation benefits represent the actual premiums accruing to WorkSafeBC for the year. Amounts recorded in the financial statements relating to long–term disability benefits represent the actual amount of benefits paid during the year plus the actuarial estimate for future payments, based on claims ongoing at year–end.

64 PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

14. Due to Other Governments

	In Millions
	2021		2020
	$		$
Government of Canada:
Current		520		355
Long–term				3
Provincial governments:
Current		20		21
Local governments:1
Current		83		57
		623		436

¹Local governments are municipal units established by the provincial government that include regional and metropolitan municipalities, cities, towns, townships, districts, rural municipalities and villages.

15. Due to Crown Corporations, Agencies and Trust Funds

	In Millions
	2021		2020
	$		$
Columbia Basin Trust joint ventures1		634		651
Great Northern Way Campus Trust		9		10
Trust funds		67		61
		710		722

¹Columbia Basin Trust joint ventures with Columbia Power Corporation (Brilliant Power Corporation, Brilliant Expansion Power Corporation, Arrow Lakes Power Corporation, and Waneta Expansion Power Corporation).

16. Deferred Revenue

	In Millions
	2021		2020
	$		$
Deferred restricted contributions (see table)		9,328		7,768
Unearned lease revenue		1,197		1,139
Tuition		479		501
Petroleum, natural gas and minerals, leases and fees		337		455
Motor vehicle licences and permits		291		279
Water rentals and recording fees		123		101
Derivative debt instruments		71		77
Miscellaneous		359		306
		12,185		10,626

Unearned lease revenue represents lease payments received in advance. Revenue is recognized as the performance obligations are met over the term of the lease.

PROVINCE OF BRITISH COLUMBIA 65

PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

16. Deferred Revenue—Continued

Petroleum, natural gas and minerals, leases and fees include payments received from external sources to obtain exclusive subsurface tenure rights to explore for, or produce, petroleum and natural gas resources. Revenue is recognized over the average term of the tenures issued, currently estimated at 10 years.

Deferred Restricted Contributions are those contributions received from external sources that are restricted through legislative or contractual stipulations for the purpose of program delivery. These deferred contributions are reduced and recognized as revenue when the stipulations of the contribution agreement are satisfied.

			In Millions
	Revenue Recognition		2021		2020
	(Years)
			$		$
Restricted Contributions from the Federal Government
Build Canada fund for highway and transportation infrastructure		3–100		1,637		1,163
Operating contributions for the education sector		1–12		584		337
Infrastructure and economic diversification		20–50		559		256
Miscellaneous contributions for post–secondary institutions		1–40		352		351
Strategic infrastructure fund investments in post-secondary institutions		3–40		335		345
Operating contributions for other sectors		1–12		180		140
Miscellaneous contributions for transportation infrastructure		1–40		178		734
Regional services and facilities in the health sector		3–40		7		9
Other		1–40		116		22
Restricted Contributions from Municipal Sources
Regional hospital districts for equipment and facilities		3–40		1,028		523
Operating contributions for the transportation sector		1–12		177		82
Bylaw capital funding for schools		3–40		129		122
Municipal transportation infrastructure funding		3–77		59		61
Restricted Contributions from Other Sources
Health endowments and other contributions		5–50		2,115		1,768
Education endowments		30		1,078		1,060
Operating contributions for the education sector		1–12		489		510
Operating contributions for the other sector		1–12		170		159
Operating contributions for the health sector		1–12		119		107
Miscellaneous contributions from other sources		5–50		16		19
				9,328		7,768

Impact to revenue for the next five fiscal years and thereafter is estimated to be:

	In Millions
	$
2022		935
2023		821
2024		522
2025		493
2026		460
Thereafter		6,097
Total deferred restricted contributions		9,328

66 PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

17. Employee Pension Plans

	In Millions
	2021		2020
	$		$
Members of the Legislative Assembly Superannuation Account		1		1

Members of the Legislative Assembly Superannuation Account

The Legislative Assembly Superannuation Account (the “Account”) is administered by the British Columbia Pension Corporation (the “BC Pension Corporation”). As members of the Legislative Assembly retire, the present value of the amount required to provide a legislative member’s future pension benefit is transferred from the Account to the Public Service Pension Plan from which monthly pensions are paid. The province contributes to this plan and provides additional funding when the present value of the funding exceeds the accumulated assets in the Account available to fund those members’ benefit entitlements in the plan. This plan provides basic pension benefits based on length of service, highest four–year average earnings and plan members’ age at retirement. Benefits, such as group health benefits and inflation protection for the basic pension, are not guaranteed and are contingent upon available funding.

Other pension plans

Other pension plans represent defined benefit plans outside of the College, Public Service, Municipal, and Teachers’ Pension plans which are funded by entities within the government reporting entity. They include the Retirement Plan for Non–Teaching Employees of the Board of School Trustees of School District No. 43 (Coquitlam), the University of Victoria’s pension plan for employees other than faculty and professional staff, Simon Fraser University’s Academic Pension Plan and Administrative/Union Pension Plan, and Canadian Blood Services’ pension plan for regular employees. Only 14.67% of the pension fund assets and accrued benefit obligation are included for the Canadian Blood Services pension plan, reflecting the province’s interest in the plan. The accrued benefit obligation for these other pension plans is $841 million (2020: $767 million), with estimated pension fund assets of $988 million (2020: $896 million), and an unamortized actuarial gain (loss) of $36 million (2020: $43 million). The accrued net asset (liability) is $111 million (2020: $86 million) and is included in post retirement benefits in Note 13.

There are additional employee pension plans in Crown corporations and agencies consolidated on the modified equity basis. They include British Columbia Hydro and Power Authority, British Columbia Lottery Corporation, British Columbia Railway Company, and the Insurance Corporation of British Columbia. Net assets or net liabilities of the pension funds are included in the equity balance of the particular Crown corporation or agency in Note 7. Total accrued benefit obligations equal $9,061 million (2020: $7,884 million), with estimated pension fund assets of $7,490 million (2020: $6,477 million). The accrued net (liability) asset is $(1,571) million (2020: $(1,407) million).

Joint trusteed plans

The province contributes to four pension plans for substantially all of its employees. The four pension plans are the College Pension Plan, the Public Service Pension Plan, the Municipal Pension Plan, and the Teachers’ Pension Plan. The plans provide basic pensions based on length of service, highest five–year average earnings and plan members’ age at retirement. Benefits, such as group health benefits and inflation protection for the basic pension, are not guaranteed and are contingent upon available funding. No unfunded liability exists for the future indexing of pensions as the obligation is limited to the amount of available assets in separate inflation accounts.

PROVINCE OF BRITISH COLUMBIA 67

PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

17. Employee Pension Plans—Continued

The College, Public Service, Municipal and Teachers’ pension plans are joint trusteed plans. In joint trusteed plans, control of the plans and their assets is assumed by individual pension boards made up of plan employer and plan member appointed trustees. The Province participates as a plan employer in each plan. Provisions of these plans stipulate that the province has no formal claim to any pension plan surplus or asset. The boards are fully responsible for the management of the plans, including investment of the assets and administration of the plans. The BC Pension Corporation provides benefit administrative services as an agent of the boards of trustees. The British Columbia Investment Management Corporation provides investment management services as an agent of the boards of trustees.

In the event an unfunded liability is determined by an actuarial valuation (performed at least every three years), the pension boards are required to address it through contribution adjustments shared equally by plan members and employers. It is expected, therefore, that any unfunded liabilities in the future will be short–term in nature.

The reported net assets or net obligations of the pension plans are administered under joint trust arrangements. The province has no claim on accrued asset amounts. The province is responsible for 50% of a reported net obligation. Settlement of the obligation will occur in future periods as contributions maintain a fully funded plan status over time. Also, only 70% of the pension fund assets, accrued benefit obligation, and preliminary current year employer contributions are included for the Municipal Pension Plan, reflecting the province’s interest in the plan.

The accrued benefit obligations and pension assets shown for 2020/21 are based on extrapolations of the most recent actuarial valuations as shown below. Fund assets are based on market value at the date of actuarial valuation and extrapolated using actuarial growth assumptions as shown in the following table. The expected long–term inflation rates used in these assumptions are nil, since the future indexing of pensions is limited to the amount of available assets in the inflation adjustment account.

Key actuarial assumptions and dates:
	Public
	Service		Municipal		Teachers’		College
	Pension		Pension		Pension		Pension
	Plan		Plan		Plan		Plan
Date of actuarial valuation		Mar 31/20		Dec 31/18		Dec 31/17		Aug 31/18
Date of audited financial statements		Mar 31/20		Dec 31/19		Dec 31/19		Aug 31/20
Expected long–term rate of return		6.00%		6.25%		6.00%		6.25%

The audited financial statements of each pension plan listed, except the Account, may be found in the annual reports at www.pensionsbc.ca outside these audited statements.

68 PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

17. Employee Pension Plans—Continued

Accrued net obligation (asset) table:

The estimated financial position as at March 31, 2021, for the basic pension in each plan is as follows:

	In Millions
	Public
	Service		Municipal		Teachers’		College
	Pension		Pension		Pension		Pension
	Plan		Plan		Plan		Plan		Total
	$		$		$		$		$
Accrued benefit obligation	22,664		30,819		22,429		4,231		80,143
Pension fund assets	26,113		35,334		24,065		4,723		90,235
	(3,449	)	(4,515	)	(1,636	)	(492	)	(10,092	)
Unamortized actuarial gain (loss)	1,037		2,089		1,326		273		4,725
Accrued net obligation (asset)	(2,412	)	(2,426	)	(310	)	(219	)	(5,367	)

The province is obligated under labour contracts to provide retirement benefits for its employees through contributions to these pension plans. Contribution rates are adjusted to reflect the results of the triennial actuarial valuation of each plan. When there is an accrued net obligation, the contribution rates will be increased to address the shortfall over the employees’ estimated remaining years of service. The province contributes approximately 50% of the total contributions for these plans; therefore, the province’s accrued net obligation is 50%. An accrued net obligation will not result in a payment to the plan, but will be addressed through increased contributions over time.

The preliminary overall fund rates of return (loss) reported to the pension boards as at December 31, 2020 for each plan are: College Pension Plan 11.2% (2020: 13.5%), Public Service Pension Plan 12.1% (2020: 13.4%), Municipal Pension Plan 11.6% (2020: 12.5%), and Teachers’ Pension Plan 10.6% (2020: 13.0%).

The province’s share includes contributions for all participants in the government reporting entity. Total contributions this year for each plan are: College Pension Plan $100 million (2020: $94 million), the Public Service Pension Plan $455 million (2020: $431 million), the Municipal Pension Plan $894 million (2020: $843 million), and the Teachers’ Pension Plan $394 million (2020: $375 million).

PROVINCE OF BRITISH COLUMBIA 69

PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

18. Taxpayer–supported Debt1
			In Millions
	Year of	Canadian	US	Other
	Maturity	Dollar	Dollar2	Currencies2	2021	2020
		$	$	$	$	$
Short–term promissory notes	2021				0	4,504
	2022	5,231	2,399		7,630	0
Notes, bonds and debentures3	2021				0	2,143
	2022	2,370	990		3,360	3,387
	2023	2,456	1,233		3,689	3,690
	2024	3,319			3,319	2,681
	2025	1,449	1,663	712	3,824	3,644
	2026	3,477		350	3,827	1,620
	2027–2031	9,409	3,206	265	12,880	8,527
	2032–2036	3,214		161	3,375	2,708
	2037–2041	4,757		379	5,136	5,010
	2042–2046	4,247		340	4,587	4,572
	2047–2051	5,723		1,245	6,968	3,583
	2052–2056	137			137	133
	2057–2061				0	0
	2062–2066	181			181	181
Capital leases	2021–2048	280			280	285
Total debt issued at face value		46,250	9,491	3,452	59,193	46,668
Unamortized premium					789	1
Total taxpayer-supported debt					59,982	46,669

The effective interest rates (weighted average) as at March 31 on the above debt are:

2021	3.15	%
2020			3.66	%

¹The balances and interest rates reflect the impact of the related derivative contracts, presented in Note 20.

²Foreign currency denominated debt as at March 31, 2021 includes USD$7,874 million which was fully hedged to CAD$9,491 million; 100 million Swiss Francs was fully hedged into CAD$96 million; 1,673 million EURO was fully hedged to CAD$2,474 million, $870 million AUD was fully hedged to CAD$882 million.

³Notes, bonds, and debentures includes $27 million (2020: $31 million) in other loans.

70 PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

18. Taxpayer–supported Debt—Continued

Notes, bonds and debentures

Redeemable by the province

Balances include debentures issued to the Canada Pension Plan totalling $3,131 million (2020: $3,282 million) at a weighted average interest rate of 4.71% (2020: 4.87%). These debentures mature at various dates from April 10, 2021 to July 12, 2049 with interest rates varying between 1.98% and 6.64%. These debentures are redeemable in whole or in part before maturity, on thirty days prior notice, at the option of the province. During the year, $109 million (2020: $156 million) Canada Pension Plan debentures were issued.

Public–private partnership obligations

Balances include the present value of the minimum payments related to tangible capital assets financed by public-private partnership agreements totalling $3,096 million (2020: $2,819 million).

Mortgages

Balances include mortgages totalling $171 million (2020: $164 million) secured by land and buildings. The carrying value is $253 million (2020: $214 million).

Aggregate payments to meet sinking fund instalments and retirement provisions

Aggregate payments for the next five fiscal years and thereafter to meet sinking fund instalments and retirement provisions on notes, bonds and debentures are:

	In Millions
	$
2022	3,794
2023	3,667
2024	3,309
2025	3,824
2026	3,821
2027–2066	33,167
Total of stated minimum payments	51,582

Capital Lease Obligations

Capital lease obligations consist of the present value of the minimum lease payments related to capital leased assets. The province has lease agreements with terms between 3 years and 42 years, with interest rates ranging between 0.00% and 10.63%.

Major leases include: Vancouver Coastal Health Authority capital lease obligation for the Gordon and Leslie Diamond Health Care Centre of $98 million (2020: $101 million), with a weighted average interest rate of 5.37% and maturing August 1, 2036, Ministry of Citizens’ Services capital lease obligation for office space in Capital Park of $95 million (2020: $99 million), with a weighted average interest rate of 3.97% and maturing March 1, 2040, Thompson Rivers University lease agreements for land and student residences of $35 million (2020: $36 million), with a weighted average interest rate of 5.14% and maturing August 31, 2047, and British Columbia Institute of Technology capital lease obligation for the building at Annacis Island Campus of $18 million (2020: $20 million), with a weighted average interest rate of 4.19% and maturing July 31, 2044.

PROVINCE OF BRITISH COLUMBIA 71

PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

18. Taxpayer–supported Debt—Continued

Aggregate payments to meet capital lease payments

Aggregate minimum lease payments over the next five fiscal years and thereafter are:

	In Millions
	$
2022	31
2023	28
2024	25
2025	22
2026	21
2027–2048	282
Total minimum lease payments	409
Less imputed interest	(129	)
Total capital lease liability	280

72 PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

19. Self–supported Debt¹

			In Millions
	Year of	Canadian	US	Other
	Maturity	Dollar	Dollar2	Currencies2	2021	2020
		$	$	$	$	$
Short–term promissory notes	2021				0	2,876
	2022	906	2,113		3,019	0
Notes, bonds and debentures	2021				0	1,100
	2022	526			526	526
	2023	500			500	500
	2024	200			200	200
	2025				0	0
	2026	900	633	391	1,924	1,950
	2027–2031	5,575			5,575	4,275
	2032–2036	1,110		200	1,310	1,310
	2037–2041	1,250	371		1,621	1,632
	2042–2046	4,923			4,923	4,923
	2047–2051	6,481			6,481	5,581
	2052–2056	60			60	60
	2057–2061				0	0
	2062–2063	50			50	50
Total debt issued at face value		22,481	3,117	591	26,189	24,983
Unamortized premium (discount)					80	(104	)
Unrealized foreign exchange gain (loss)					6	(32	)
Total self–supported debt					26,275	24,847

The effective interest rates (weighted average) as at March 31 on the above debt are:

2021	3.23	%
2020			3.50	%

¹The balances and interest rates reflect the impact of the related derivative contracts, presented in Note 20.

²Foreign currency denominated debt as at March 31, 2021 includes USD$2,454 million (CAD$3,117 million), of which USD$2,227 million was fully hedged to CAD$2,832 million and USD$227 million was unhedged (CAD$285 million), and 402 million EURO was fully hedged to CAD$591 million.

Notes, bonds and debentures

Redeemable by the province

Balances include debentures issued to the Canada Pension Plan totalling $223 million (2020: $223 million) at a weighted average interest rate of 3.34% (2020: 3.34%). These debentures mature at various dates from May 8, 2042 to July 10, 2042, with interest rates varying between 3.22% and 3.54%. These debentures are redeemable in whole or in part before maturity, on thirty days prior notice, at the option of the province. During the year, no Canada Pension Plan debentures were issued (2020: nil).

PROVINCE OF BRITISH COLUMBIA 73

PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

19. Self–supported Debt—Continued

Aggregate payments to meet retirement provisions

Aggregate payments for the next five fiscal years and thereafter to meet retirement provisions on notes, bonds and debentures are:

	In Millions
	$
2022		526
2023		500
2024		200
2025		0
2026		1,924
2027–2063		20,020
Total of stated minimum payments		23,170

74 PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

20. Risk Management and Derivative Financial Instruments

The province borrows funds in both domestic and foreign capital markets, and manages its existing debt portfolio to achieve the lowest debt costs within specified risk parameters. As a result, the province is exposed to risks associated with fluctuations in interest rates, foreign exchange rates, and credit risk. In accordance with the risk management policy guidelines set by the Risk Committee of the Ministry of Finance, the province uses a variety of derivative financial instruments to hedge the exposure to these risks.

Derivatives used by the province include interest rate swaps, cross–currency swaps, and forward foreign exchange contracts. A derivative instrument is a financial contract with a counterparty that is applied to effect a hedge on interest rate or foreign exchange exposure that exists in the underlying provincial debt instrument. A derivative derives value from the impact of market changes on the underlying hedged debt instrument.

The following tables present maturity schedules of the province’s derivatives, based on the notional amounts of the contracts. Cross–currency swaps can have an exchange of the notional amounts at the start of the contract, the end of the contract, or both. There is no exchange of the notional amounts in interest rate swaps.

Taxpayer–supported Portfolios (Notional Values)

	In Millions
							Forward
			Cross-		Interest		Foreign
	Year of		Currency		Rate		Exchange
	Maturity		Swaps1		Swaps1		Contracts1		Total
			$		$		$		$
		2022		1,025		486		2,398	3,909
		2023		1,233		1,050			2,283
		2024				109			109
		2025		2,375		4			2,379
		2026		350		100			450
		2027–2031		3,471		692			4,163
		2032–2036		161		232			393
		2037–2041		378		200			578
		2042–2046		340		200			540
		2047–2051		1,245		400			1,645
		2052–2056				195			195
Total				10,578		3,668		2,398	16,644

¹At March 31, 2021, fair market valuation was an unrealized gain of $710 million (2020: $1,276 million gain) on cross–currency swaps, and an unrealized gain of $238 million (2020: $447 million gain) on interest rate swaps, and an unrealized loss of $43 million (2020: $99 million gain) on forward foreign exchange contracts. These unrealized gains and losses are incurred on derivatives held in matched hedging arrangements with related debt instruments that are held to maturity. The unrealized gains or losses on these hedging derivatives are offset by corresponding unrealized gains or losses on the matched debt instruments. These gains and losses are subject to measurement uncertainty.

PROVINCE OF BRITISH COLUMBIA 75

PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

20. Risk Management and Derivative Financial Instruments—Continued

Self–supported Portfolios (Notional Values)

	In Millions
							Forward
			Cross		Interest		Foreign
	Year of		Currency		Rate		Exchange
	Maturity		Swaps2		Swaps2		Contracts2		Total
			$		$		$		$
		2022						2,113	2,113
		2023							0
		2024							0
		2025							0
		2026		391					391
		2027–2031						436	436
		2032–2036		200		1,725			1,925
		2037–2041						283	283
		2042–2046							0
		2047–2051							0
		2052–2056				1,500			1,500
Total				591		3,225		2,832	6,648

²At March 31, 2021, fair market valuation was an unrealized gain of $19 million (2020: $14 million gain) on cross currency swaps, an unrealized loss of $121 million (2020: $951 million loss) on interest rate swaps, no gain or loss (2020: $79 million loss) on advanced rate setting agreements, and an unrealized loss of $24 million (2020: $166 million gain) on forward foreign exchange contracts. These unrealized gains and losses are incurred on derivatives held in matched hedging arrangements with related debt instruments that are held to maturity. The unrealized gains or losses on these hedging derivatives are offset by corresponding unrealized gains or losses on the matched debt instruments. These gains and losses are subject to measurement uncertainty.

Interest rate risk

Interest rate risk is the risk that the province’s debt servicing costs will fluctuate due to changes in interest rates. The province uses derivative contracts (interest rate swaps) to manage interest rate risk by exchanging a series of interest payments and assuming either a fixed or floating rate liability to a counterparty, based on the notional principal amount. Derivatives allow the province to alter the proportion of its debt held in fixed and floating rate form to take advantage of changes in interest rates.

The government’s current policy guidelines with respect to the provincial government direct debt portfolio, which totals $42,432 million (2020: $30,804 million), allow floating rate exposure up to 45.00% (2020: 45.00%) of this portion of the taxpayer-supported debt. At March 31, 2021, floating rate debt exposure was 22.33% (2020: 22.02%) of the government direct debt portfolio.

Under current policy guidelines for British Columbia Hydro and Power Authority (BC Hydro), the maximum floating rate exposure is 25.00% (2020: 25.00%) of their debt which totals $24,602 million (2020: $23,158 million). At March 31, 2021, floating rate debt exposure for BC Hydro was 13.60% (2020: 16.00%) of their debt.

Based on the taxpayer–supported and self–supported debt portfolios at March 31, 2021, a one percent change in interest rates would impact the annual debt servicing expense by $116 million (2020: $86 million) for the taxpayer–supported debt portfolio and $30 million (2020: $29 million) for the self–supported debt portfolio.

At March 31, 2021, swap agreements relating to investments held by taxpayer-supported portfolios included interest rate swaps totalling $44 million (2020: $44 million).

76 PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

20. Risk Management and Derivative Financial Instruments—Continued

Foreign exchange risk

Foreign exchange risk is the risk that the province’s debt servicing costs and principal payments will fluctuate due to changes in foreign exchange rates. The province uses derivative contracts (cross–currency swaps) to hedge foreign exchange risk by converting foreign currency principal and interest cash flows into Canadian dollar cash flows.

The government’s current policy guidelines with respect to the provincial government direct debt portfolio, which totals $42,432 million (2020: $30,804 million), allow unhedged foreign debt exposure up to 10.00% (2020: 10.00%) of this portion of the taxpayer–supported debt. At March 31, 2021, there was no unhedged foreign debt exposure of the government direct debt portfolio (2020: nil).

Under current policy guidelines for BC Hydro, the maximum unhedged foreign debt exposure is 5.00% (2020: 5.00%) of its debt, which totals $24,602 million (2020: $23,158 million). At March 31, 2021, 0.20% (2020: 0.30%) of its debt was in the form of unhedged foreign debt in US dollars.

Based on the taxpayer-supported and self–supported debt portfolios at March 31, 2021, a one cent change in the Canadian dollar versus the US dollar would not impact the annual debt servicing cost (2020: nil) for the taxpayer–supported debt portfolio; however, the self–supported debt portfolio would increase by $1 million (2020: $2 million).

At March 31, 2021, swap agreements relating to investments held by taxpayer-supported portfolios included cross–currency swaps totalling $39 million (2020: $39 million).

Credit risk

Credit risk is the risk that the province will incur financial losses due to a counterparty defaulting on its financial obligations. In accordance with the government’s policy guidelines, the province reduces its credit risk by dealing with only highly rated counterparties. The province only enters into derivative transactions with counterparties that have a rating from Standard & Poor’s or Moody’s Investors Service Inc. of at least A+/A1. The province also establishes limits on individual counterparty credit exposures and monitors these exposures on a regular basis.

The province implements Credit Support Annex agreements for all derivative type transactions, including cross–currency and interest rate swaps, to mitigate exposure to counterparty default risk. Under the terms of these agreements, the province may be required to pledge or receive eligible collateral with its counterparties. These amounts will be returned to or received from the counterparties when there are no longer any outstanding obligations. As at March 31, 2021, gross counterparty exposure was valued at $781 million (2020: $972 million), and net collateral held was $374 million (2020: $172 million), for a net exposure of $407 million (2020: $800 million). Collateral held consists of $91 million cash received which is included in accounts payable (see Note 12) (2020: $51 million cash paid included in accounts receivable (see Note 3)), and $283 million (2020: $223 million) of securities received, which have not been recognized in the financial statements as it is held by a third party until the derivative transaction is completed or default occurs.

21. Net Liabilities

The Consolidated Statement of Change in Net Liabilities (see page 47) shows the net impact of applying the expenditure basis of accounting. The net liabilities calculation uses the expenditure, rather than the expense basis of accounting. Under the expenditure basis of accounting, tangible capital assets, prepaid program costs and other assets are recorded as expenditures when calculating the current year surplus or deficit. Under the expense basis of accounting, these items are recorded on the Consolidated Statement of Financial Position as assets and amortized over an applicable period of time.

PROVINCE OF BRITISH COLUMBIA 77

PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

22. Tangible Capital Assets

	In Millions
	2021		2020
	$		$
Land and land improvements		5,829		5,531
Buildings (including tenant improvements)		26,065		24,547
Highway infrastructure		13,702		13,275
Transportation equipment		2,894		2,604
Computer hardware and software		2,047		1,908
Other		2,244		2,158
		52,781		50,023

See Consolidated Statement of Tangible Capital Assets on page 106.

The estimated useful lives of the more common tangible capital assets are: buildings (3–90 years); highway infrastructure (3–90 years); transportation equipment (including rapid transit, ferries and related infrastructure) (15–100 years); computer hardware and software (1–18 years); major software systems (1–18 years); and other (including vehicles, specialized equipment, and furniture and equipment) (1–30 years). Land improvements are amortized over 30 years (recreation areas) or 40 years (dams and water management systems). Leasehold improvements are amortized over 2–50 years, over the lease term, or over the lesser of the lease term and the life of the asset.

BC Transportation Financing Authority (BCTFA) assets include capital assets under lease to South Coast British Columbia Transportation Authority (SCBCTA). These capital assets under lease consist of land, land improvements, interests in land, park and ride facilities, stations, guideways, rolling stocks and other assets related to the SkyTrain system, including the Millennium Line, Evergreen Line, the Expo Line SkyTrain systems and the West Coast Express. These assets are made available for use by SCBCTA under operating lease arrangements for a nominal lease amount pursuant to an Order in Council and to the Millennium Line Use Agreement, and represent one of the province’s contributions toward public transportation in the Metro Vancouver service area. The Expo Line and Millennium Line Use Agreements expire in January 2022 and may be renewed, if mutually agreed, for successive five year terms as long as the assets remain a part of the Greater Vancouver regional transportation system. The net book value of these assets is $2,316 million (2020: $2,365 million).

The province received no donations of tangible capital assets during the year (2020: nil).

78 PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

23. Restricted Assets

	In Millions
	2021		2020
	$		$
Endowment funds		2,003		1,931

Donors have placed restrictions on their contributions to the endowment funds of universities, colleges, school districts, health organizations, and taxpayer-supported Crown corporations. One restriction is that the original contribution should not be spent. Another potential restriction is that any investment income of the endowment fund that is required to offset the eroding effect of inflation or preserve the original value of the endowment should also not be spent.

24. Prepaid Program Costs

	In Millions
	2021		2020
	$		$
Prepaid program costs		1,264		892

The prepaid program costs include deferred costs associated with the BC Timber Sales Program, prepaid operating costs and inventories of supplies and other not–for–resale items held by taxpayer-supported Crown corporations and agencies which are charged to expense when consumed in the normal course of operations. At March 31, 2021, the total inventories held for use or consumption was $576 million (2020: $414 million). During the year, the total expense due to the consumption of inventories was $1,510 million (2020: $1,419 million) including the effect of write–downs of $65 million (2020: $11 million).

25. Other Assets

	In Millions
	2021		2020
	$		$
Deferred debt instrument costs		124		112
Other deferred costs		194		96
		318		208

PROVINCE OF BRITISH COLUMBIA 79

PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

26. Accumulated Surplus (Deficit)

	In Millions
	2021			2020
	$			$
Accumulated surplus (deficit)—before other comprehensive income—beginning of year as previously reported1		8,106			8,427
Adjustments to accumulated surplus (deficit)2,3		(113	)		(112	)
Accumulated surplus (deficit)—beginning of year as restated		7,993			8,315
Surplus (deficit) for the year4		(5,468	)		(322	)
Accumulated surplus (deficit)—before other comprehensive income		2,525			7,993
Accumulated other comprehensive income from self–supported Crown corporations and agencies (see page 105)—beginning of year		(224	)		31
Other comprehensive income from self–supported Crown corporations and agencies (see page 105)		906			(255	)
Accumulated other comprehensive income from self–supported Crown corporations and agencies (see page 105)—end of year		682			(224	)
Accumulated surplus (deficit)—end of year		3,207			7,769

1The opening accumulated surplus (deficit) figures for April 1, 2020 and April 1, 2019 are reported before accumulated other comprehensive income.
2During 2020/21, adjustments were made to the opening accumulated surplus for 2019/20 for the following items:
Restatement of Vancouver Coastal Health Authority deferred contributions	(63	)
Recognition of concessionary adjustment on land tax deferment loans	(61	)
Restatement of University of British Columbia deferred revenue recognition	13
School district amortization policy adjustment	(1	)
Total	(112	)
3During 2020/21, adjustments were made to the opening accumulated surplus for 2020/21 for the following items:
Restatement of Vancouver Coastal Health Authority deferred contributions	(63	)
Recognition of concessionary adjustment on land tax deferment loans	(61	)
Restatement of University of British Columbia deferred revenue recognition	13
School district amortization policy adjustment	(2	)
Total	(113	)
4During 2020/21, adjustments were made to the reported (deficit) figure for the 2019/20 fiscal year as follows:
School district amortization policy adjustment	(1	)
Total	(1	)

80 PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

27. Contingent Assets and Contractual Rights

(a) UNRECOGNIZED ASSETS

Intangible assets and items inherited by right of Crown, such as forest, water and mineral resources, are not recognized in these financial statements. Land inherited by the right of Crown is capitalized at a nominal value of one dollar.

The value of collections (e.g. artifacts, specimens, works of art, and documents) has been excluded from the Statement of Financial Position. When collections are purchased, these items are expensed.

(b) CONTINGENT ASSETS

The province has no contingent assets where the estimated amount is, or exceeds $100,000, and the occurrence of the confirming future event is likely.

(c) CONTRACTUAL RIGHTS

Contractual rights are future–oriented financial information based on multi–year contracts the government has entered into that will become assets and revenue when terms of the contracts are met. The following table presents contractual rights that are greater than $50 million, by sector, by year.

	In Millions
											2027 and
	2022		2023		2024		2025		2026		beyond		Total
		$		$		$		$		$		$		$
Consolidated Revenue Fund and
Taxpayer–supported Crown
corporations and agencies
Education		20		13		12		3						48
Natural resources and economic development		342		327		305		302		301		4,780		6,357
Other		136		80		72		64		51		88		491
Transportation		521		515		428		218		144		1,223		3,049
		1,019		935		817		587		496		6,091		9,945
Self–supported Crown
corporations and agencies
Natural resources and economic development		349		276		235		193		196		4,495		5,744
Transportation		5		5		5		5		5		30		55
Protection of persons and property		36		31		27		21		17		53		185
		390		312		267		219		218		4,578		5,984
Total		1,409		1,247		1,084		806		714		10,669		15,929

PROVINCE OF BRITISH COLUMBIA 81

PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

28. Contingent Liabilities and Contractual Obligations

(a) GUARANTEED DEBT

The authorized limit for loans guaranteed by the province as at March 31, 2021 was $398 million (2020: $398 million). These guarantees include amounts where indemnities have been made for explicit quantifiable loans. Guaranteed debt as at March 31, 2021 totalled $13 million (2020: $14 million). See Consolidated Statement of Guaranteed Debt on page 107 for details.

(b) CONTINGENT LIABILITIES

Litigation

The province is a defendant in legal actions and is involved in matters such as expropriation, contract and tax disputes. These matters may give rise to future liabilities.

The province has the following contingent liabilities where the estimated or known claim is, or exceeds $100,000, but the likelihood of payment is uncertain.

	In Millions
	2021		2020
	$		$
Property access disputes		281		281
Tax disputes		50		48
Contract disputes		17		2
Damage to persons or property		2
Negligence and miscellaneous		330		294
		680		625

When it is determined it is likely a liability exists and the amount can be reasonably estimated, the amount is recorded as an accrued liability (see Note 12) and an expense. The accrued liability for pending litigation in process at March 31, 2021 was $123 million (2020: $138 million).

Tax Appeals

The province has received appeals under various tax statutes totalling $125 million (2020: $99 million). The cost to the province cannot be determined as the outcome of these appeals is uncertain.

Guarantees and Indemnities

The province also has contingent liabilities in the form of indemnities, indirect guarantees and outstanding claims for amounts that are not explicit or reasonably estimable at this time.

82 PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

28. Contingent Liabilities and Contractual Obligations—Continued

Environmental Clean–up

The province is responsible for the remediation of numerous contaminated sites in the province that are no longer in productive economic use.

For sites where the province is directly responsible or has assumed responsibility for remediation, the following provision for future clean–up costs has been accrued based on preliminary environmental assessments, or estimations for those sites where an assessment has not been conducted. The provision is recorded as an accrued liability (see Note 12).

	In Millions
	2021		2020
	$		$
Mine sites		320		315
Transportation infrastructure		32		38
Industrial sites		25		26
Pulp mills		5		6
Salt sheds		4		5
Maintenance yards		4		2
Miscellaneous		95		113
		485		505

This provision for future clean–up costs is an estimate of the minimum remediation costs for known sites where an assessment has been conducted, or where available information on sites is sufficient to estimate the costs. Where information is not available to make an estimate, costs are extrapolated from the estimated costs of similar sites. Where sites require ongoing remediation, monitoring, or maintenance all estimated future costs are discounted using the province’s estimated weighted average cost of capital at periodic evaluation dates. As at March 31, 2021, the weighted average cost of capital is 3.15% (2020: 3.66%).

As at the reporting date, 30 sites where historical industrial activity has occurred have been identified for monitoring purposes. Remediation activities are unlikely to be performed on these sites and any future cost is not determinable.

Additional environmental liabilities of government business enterprises include $326 million (2020: $309 million) accrued by British Columbia Hydro and Power Authority, and $96 million (2020: $96 million) accrued by British Columbia Railway Company. The liabilities are included in the investment balance of the Crown corporation or agency in Note 7.

Indigenous Land Claims

Treaty negotiations between the province, Canada and First Nations commenced in 1994. The province anticipates these negotiations will result in modern–day treaties defining the boundaries and nature of First Nations treaty settlement lands. As of March 31, 2021, there were 72 First Nations in various stages of negotiation, including 39 First Nations in active or completed negotiations.

PROVINCE OF BRITISH COLUMBIA	83
PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

28. Contingent Liabilities and Contractual Obligations—Continued

When final treaty agreements are ratified by all parties, the provincial cost of treaties is recorded in the Public Accounts. Costs are accounted for based on the substance of the final agreement.

A Final Agreement with Yale First Nation was ratified by the Yale First Nation in March 2011, by the provincial government on June 2, 2011 and by the Parliament of Canada on June 19, 2013. Yale First Nation is now negotiating implementation of the treaty; however, a treaty effective date has not yet been agreed to by the parties. Through the treaty, the province will provide Yale with a capital transfer of $2.5 million, economic development funding of $1.1 million and 1,179 hectares of provincial Crown lands.

It is expected the capital transfer components in all treaty agreements will be, in most cases, entirely provided by Canada. The current commitments of provincial Crown land for all Final Agreement and Increment Treaty Agreement tables are as follows:

·    Ditidaht, 3,567 hectares

·    Homalco, 822 hectares

·    In–SHUCK–ch, (Skatin and Samahquam) 9,474 hectares

·    Kaska Dena Council, 677 hectares

·    Kitselas, 34,839 hectares

·    Kitsumkalum, 44,661 hectares

·    K’omoks, 1,733 hectares

·    Ktunaxa Nation Council, 418 hectares

·    Lake Babine Nation (BC only), 511 hectares with a one–time payment of $0.02 million

·    Lheidli T’enneh, 3,416 hectares

·    Nazko, 172 hectares

·    NStQ (Canoe Creek, Sugar Cane, Canim Lake, Soda Creek), 3,758 hectares

·    Pacheedaht, 1,216 hectares

·    Te’mexw (Malahat, Scia’new, Snaw–naw–as, Songhees and T’Sou–ke), 1,182 hectares

·    Tla–o–qui–aht, 47 hectares

·    Wei Wai Kai (Cape Mudge First Nation), 3,100 hectares

·    Wuikinuxv, 13,946 hectares

·    Yekooche, 5,960 hectares

Upon coming into effect, treaties will also trigger implementation costs and may result in compensation to third parties. Those costs are not determinable at this time.

Some First Nations have chosen not to negotiate through the formal British Columbia Treaty Commission process. A number of First Nations have chosen to advance their claims through litigation. Claims include declarations with respect to aboriginal rights and title, commercial rights, challenges with respect to adequacy of consultation and accommodation, and damages for unjustified infringements. The amount of any provincial liability is not determinable at this time.

84	PROVINCE OF BRITISH COLUMBIA
	PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

28. Contingent Liabilities and Contractual Obligations—Continued

Crown Corporations, Agencies and School Districts, Universities, Colleges, Institutes and Health Organizations (SUCH)

(i) The BC Transportation Financing Authority has unrecorded contingent liabilities of $42 million (2020: $36 million), including $2 million (2020: nil) for expropriation claims and $25 million (2020: $25 million) for contaminated sites.

(ii) The B.C. Pavilion Corporation and predecessor property owners remain liable for environmental and reclamation obligations for known hazards that may exist at its facilities. Management is not aware of any existing environmental problems related to its facilities that may result in a material liability to the B.C. Pavilion Corporation.

(c) CONTRACTUAL OBLIGATIONS

The government has entered into a number of multiple–year contracts for the delivery of services and the construction of assets. These contractual obligations will become liabilities in the future when the terms of the contracts are met. Disclosure relates to the unperformed portion of the contracts. Contractual obligations are future–oriented financial information about non–discounted future cash payments for operating and capital contracts, and do not indicate when the related expenses will be recognized in the financial statements.

The following table presents the minimum amounts required to satisfy the contractual obligations, for contractual obligations that are greater than $50 million, by sector, by year. Details are available as unaudited supplementary information on the public website at http://gov.bc.ca/publicaccounts.

	In Millions
											2027 and
	2022		2023		2024		2025		2026		beyond		Total
	$		$		$		$		$		$		$
Consolidated Revenue Fund and Taxpayer–supported Crown corporations and agencies
Health		3,382		953		1,005		963		760		5,245		12,308
Education		946		373		119		42		13		148		1,641
Social services		291		9										300
Natural resources and economic development		48		47		44		28		27		128		322
Other		732		424		270		198		179		4,812		6,615
Transportation		2,229		1,900		1,453		918		858		10,756		18,114
General government		527		443		377		295		59		243		1,944
Protection of persons and property		454		493		439		416		408		2,638		4,848
		8,609		4,642		3,707		2,860		2,304		23,970		46,092
Self–supported Crown corporations and agencies
Natural resources and economic development		2,981		3,102		2,009		1,686		1,582		37,819		49,179
General government		53		2										55
Protection of persons and property		7		6		6		4		4		5		32
		3,041		3,110		2,015		1,690		1,586		37,824		49,266
Total		11,650		7,752		5,722		4,550		3,890		61,794		95,358

PROVINCE OF BRITISH COLUMBIA	85
PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

29. Taxation Revenue

	In Millions
	2021		2020
	$		$
Personal income		11,118		10,657
Provincial sales		7,694		7,374
Corporate income		4,805		5,011
Property		2,313		2,608
Employer health		2,156		1,897
Property transfer		2,098		1,609
Carbon		1,683		1,682
Fuel		936		1,008
Tobacco		711		729
Other		652		691
		34,166		33,266

Personal income tax and corporate income tax revenues are recorded after deductions for non–refundable tax credits. Deductions allowable in the calculation of personal income tax revenue were $107 million (2020: $94 million) and corporate income tax were $97 million (2020: $144 million). The types of tax credits adjusting personal income tax and corporation income tax revenues are for foreign taxes, logging taxes, venture capital, scientific and experimental development tax, and mining flow–through share.

Personal income tax revenue was also reduced by $189 million (2020: $172 million) for the BC Tax Reduction.

Personal and corporate income tax refunds related to prior years may be issued under the International Business Activity Act. Corporate income tax reimbursements were $2 million (2020: $0.2 million).

Property tax revenue was recorded net of home owner grants of $857 million (2020: $852 million).

30. Natural Resource Revenue

	In Millions
	2021		2020
	$		$
Forests		1,304		988
Petroleum, natural gas and minerals		550		729
Water and other		549		551
		2,403		2,268

Oil and gas royalty revenues are reported after adjustments for various royalty deduction programs such as producer cost of service allowances, deep well, marginal, ultra marginal, low production, net profit, new pool discovery and road construction. Deductions allowable in the calculation of royalty revenue were $654 million (2020: $567 million). Natural resource revenue includes mining taxes of $75 million (2020: $250 million) and logging taxes of $56 million (2020: $28 million).

The province offers credits for certain costs incurred by producers including the deep well, road and summer drilling programs. Deep well credits of $3,223 million (2020: $2,920 million), road credits of $25 million (2020: $14 million) and summer drilling credits of $3 million (2020: $3 million) have been incurred by producers and will reduce future natural gas royalties payable when wells go into production.

86	PROVINCE OF BRITISH COLUMBIA
	PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

31. Expense

	In Millions
	2021		2020
Total Expense by Group Account Classification	$		$
Salaries and benefits		24,558		22,832
Government transfers		22,463		16,471
Operating costs		14,470		13,536
Interest1		2,722		2,727
Amortization		2,547		2,469
Other		864		947
		67,624		58,982

      ¹Includes foreign exchange loss amortization of $1 million (2020: loss amortization of $2 million).          

32. Valuation Allowances    

	In Millions
	2021		2020
	$		$
Inventories for resale		92
Accounts receivable		58		156
Loans, advances and mortgages receivable		29		39
Tangible capital assets		7		56
Other investments		2
Other assets		1
		189		251

These amounts are included in “Other” of “Total Expense by Group Account Classification” in Note 31, and represent the write–down of assets in the above Consolidated Statement of Financial Position categories.

PROVINCE OF BRITISH COLUMBIA	87
PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

33. Trusts Under Administration

Trusts Under Administration are not included in the Summary Financial Statements, because the province has no equity in or power of appropriation over these trusts. The province administers these trusts on behalf of third parties according to the terms of the underlying trust arrangements. The trust assets consist of cash, term deposits, investments, real estate and other sundry assets. Trust liabilities consist of trade payables, loans payable, and mortgages payable. Summary financial information from the financial statements of trust funds is provided below.

	In Millions
	Assets		Liabilities			2021		2020
	$		$			$		$
Public Guardian and Trustee of British Columbia1
—administered by government officials		1,222		(49	)		1,173		1,051
Credit Union Deposit Insurance Corporation of British Columbia1
—administered by various government officials and a non–government
investment corporation		795		(3	)		792		774
Supreme and provincial court (Suitors’ Funds)
—administered by the Courts		184					184		147
Other trust funds
—administered by various government officials		218		(54	)		164		141
		2,419		(106	)		2,313		2,113

¹These organizations are reported under International Financial Reporting Standards. Their financial statements are draft and unaudited when the Public Accounts are prepared.

34. Comparison to Estimates

The Estimates numbers on the Statement of Operations are taken from the Estimated Statement of Operations, the Estimated Revenue by Source, and the Estimated Expense by Function, on pages 4 – 6 of the Estimates, Fiscal Year Ending March 31, 2021, presented to the Legislative Assembly February 18, 2020.

35. Comparatives

Comparative figures have been restated to conform with the current year’s presentation. The effect of restatements on the previously reported operating result is disclosed in Note 26.

88 PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

36. Asset Retirement Obligations¹

	In Millions
	2021		2020
	$		$
Consolidated Revenue Fund and Taxpayer–supported Crown corporations and agencies
Education		23		25
Natural resources and economic development		10		10
Health		5		2
		38		37
Self–supported Crown corporations and agencies
Transportation		206		243
Natural resources and economic development		87		77
General government		1		1
		294		321
		332		358

¹Additional asset retirement obligation costs exist which have not been recognized because they cannot be reasonably estimated at this time. Self–supported Crown corporations’ balances in the natural resources and economic development, transportation and general government sectors are calculated using International Financial Reporting Standards.

PROVINCE OF BRITISH COLUMBIA 89

PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

37. Government Partnerships

Canadian Blood Services owns and operates the national blood supply system for Canada, except for the province of Quebec. It is a government partnership amongst Canadian provinces and territories. The ministers of health for the provinces and territories, except Quebec, provide contributions to fund its operations. Its financial results are proportionately consolidated with those of the province based upon the province’s share of its total provincial contributions (14.67%). The amounts included in these financial statements are as follows:

Consolidated Statement of Financial Position	In Millions
	2021			2020
	$			$
Financial assets		100			107
Liabilities		130			133
Net liabilities		(30	)		(26	)
Non–financial assets		73			65
Accumulated surplus (deficit)		43			39

Consolidated Statement of Operations	In Millions
	2021		2020
	$		$
Revenue		182		181
Expenses		178		181
Surplus (deficit) for the year		4		0
Accumulated surplus (deficit)—beginning of year		39		39
Accumulated surplus (deficit)—end of year		43		39

38. Regulatory Accounting

Included in the Summary Financial Statements are entities that are regulated by the independent British Columbia Utilities Commission (the Commission). The Commission is responsible for regulating utilities in British Columbia which includes establishing tariffs, approving the construction of new facilities planned by utilities, and their issuance of securities. As an independent provincial agency, the operating results of the Commission are also included in the Summary Financial Statements.

Rate–regulation can result in the deferral and amortization of costs and recoveries to allow for adjustment of future rates. In the absence of rate–regulation, these amounts would otherwise be included in the determination of net income in the year the amounts are incurred. BC Hydro had unamortized net regulatory assets at the end of March 31, 2021 of $4,277 million (2020: $5,005 million). Regulatory accounting resulted in a decrease to net income for BC Hydro for the year ended March 31, 2021 of $604 million (2020: $1,086 million increase). Further details are available in BC Hydro’s financial statements outside these audited financial statements at http://gov.bc.ca/financepublications.

90 PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

Notes to Consolidated Summary Financial Statements

for the Fiscal Year Ended March 31, 2021—Continued

39. Long–term BC First Nations Gaming Revenue Sharing

Beginning in fiscal year 2021/22, the Gaming Control Act requires that 7% of British Columbia Lottery Corporation’s net income be transferred to the BC First Nations Gaming Revenue Sharing Limited Partnership. This dedicated revenue is estimated at $58 million for the next fiscal year and is expected to total approximately $3 billion over the next 23 years.

The province will collect and transfer revenues to the BC First Nations Gaming Revenue Sharing Limited Partnership. The First Nations’ right to gaming revenue established in legislation has been implemented through the Long–term BC First Nations Gaming Revenue Sharing and Financial Agreement dated September 16, 2020.

40. Significant Events

COVID–19 (Novel Coronavirus) Global Pandemic

On March 18, 2020, the Government of British Columbia declared a state of emergency in response to the COVID–19 Novel Coronavirus global pandemic. Since that date, the Provincial Health Officer has issued orders directed to all British Columbians and organizations operating in the province. Some actions taken will have an impact on future financial statements. The state of emergency ended on June 30, 2021.

An additional $8 billion in contingency spending was authorized for fiscal year 2020/21 by the Legislative Assembly to support the pandemic response and economic recovery. The future financial impacts of the pandemic on the province are not determinable at this time.

PROVINCE OF BRITISH COLUMBIA 91

PUBLIC ACCOUNTS 2020/21

Supplementary Statement to the

Consolidated Summary Financial Statements

Reporting Entity

for the Fiscal Year Ended March 31, 2021 

TAXPAYER–SUPPORTED CROWN CORPORATIONS AND AGENCIES

(GOVERNMENT ORGANIZATIONS)

RECORDED ON A CONSOLIDATED BASIS

Consolidated Revenue Fund¹

Health Sector

BC Health Care Occupational Health and Safety Society²

Canadian Blood Services³

Fraser Health Authority

Interior Health Authority

Louis Brier Home and Hospital

Menno Hospital

Mount St. Mary Hospital

Nisga’a Valley Health Authority

Northern Health Authority

Providence Health Care Society

Provincial Health Services Authority

St Michael’s Centre

Vancouver Coastal Health Authority

Vancouver Island Health Authority

Education Sector

BCNET

British Columbia Institute of Technology

Camosun College

Capilano University

Coast Mountain College

College of New Caledonia

College of the Rockies

Douglas College

Emily Carr University of Art & Design

Industry Training Authority

Justice Institute of British Columbia

Knowledge Network Corporation

Kwantlen Polytechnic University

Langara College

Nicola Valley Institute of Technology

North Island College

Northern Lights College

Okanagan College

92 PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

Supplementary Statement to the

Consolidated Summary Financial Statements

Reporting Entity

for the Fiscal Year Ended March 31, 2021—Continued

TAXPAYER–SUPPORTED CROWN CORPORATIONS AND AGENCIES

(GOVERNMENT ORGANIZATIONS)

RECORDED ON A CONSOLIDATED BASIS

Education Sector—Continued

Royal Roads University

School Districts

Selkirk College

Simon Fraser University

The British Columbia Council for International Education

The University of British Columbia

Thompson Rivers University

University of the Fraser Valley

University of Northern British Columbia

University of Victoria

Vancouver Community College

Vancouver Island University

Natural Resources and Economic Development Sector

BC Infrastructure Benefits Inc.

B.C. Pavilion Corporation

British Columbia Enterprise Corporation

Columbia Basin Trust

Creston Valley Wildlife Management Authority Trust Fund

Destination BC Corp.

Forest Enhancement Society of BC

Forestry Innovation Investment Ltd

InBC Investment Corp.⁴

Infrastructure BC Inc.⁴

Innovate BC

Nechako–Kitamaat Development Fund Society

Oil and Gas Commission

Transportation Sector

BC Transportation Financing Authority

British Columbia Transit

Protection of Persons and Property Sector

BC Family Maintenance Agency Ltd.

BC Financial Services Authority

British Columbia Securities Commission

Organized Crime Agency of British Columbia Society

Real Estate Council of British Columbia

Real Estate Foundation of British Columbia

PROVINCE OF BRITISH COLUMBIA 93

PUBLIC ACCOUNTS 2020/21

Supplementary Statement to the

Consolidated Summary Financial Statements

Reporting Entity

for the Fiscal Year Ended March 31, 2021—Continued

TAXPAYER–SUPPORTED CROWN CORPORATIONS AND AGENCIES

(GOVERNMENT ORGANIZATIONS)

RECORDED ON A CONSOLIDATED BASIS

Social Services Sector

Community Living British Columbia

Legal Services Society

Other Sector

BC Games Society

British Columbia Assessment Authority

British Columbia Housing Management Commission

British Columbia Public School Employers’ Association

Community Social Services Employers’ Association of British Columbia

Crown Corporations Employers’ Association

First Peoples’ Heritage, Language and Culture Council

Health Employers Association of British Columbia

Post–Secondary Employers’ Association

Provincial Rental Housing Corporation

The Royal British Columbia Museum Corporation

SELF–SUPPORTED CROWN CORPORATIONS AND AGENCIES

(GOVERNMENT BUSINESS ENTERPRISES)

RECORDED ON A MODIFIED EQUITY BASIS

British Columbia Hydro and Power Authority⁵

British Columbia Liquor Distribution Branch⁶

British Columbia Lottery Corporation⁶

Columbia Power Corporation⁵

Insurance Corporation of British Columbia⁷

¹The Consolidated Revenue Fund has been allocated to the appropriate sector on the Consolidated Statement of Financial Position by Sector (page 94) and on the Consolidated Statement of Operations by Sector (page 98).

²This organization was established during the year.

³This organization reflects a government partnership amongst Canadian provinces and is proportionally consolidated based upon the province’s share (14.67%) of the total provincial contributions to the partnership.

⁴These organizations were renamed during the year.

⁵These organizations were included in the Natural Resources and Economic Development Sector results.

⁶These organizations were included in the General Government Sector results.

⁷This organization was included in the Protection of Persons and Property Sector results.

PROVINCE OF BRITISH COLUMBIA	94
PUBLIC ACCOUNTS 2020/21

Supplementary Statement to the Summary Financial Statements

Consolidated Statement of Financial Position by Sector

as at March 31, 2021

	In Millions
													Natural Resources
													and Economic
	Health				Education				Social Services				Development				Debt Servicing1
	2021		2020		2021		2020		2021		2020		2021		2020		2021		2020
		$		$		$		$		$		$		$		$		$		$
Financial Assets
Cash and cash equivalents		2,177		1,658		3,169		2,839		22		8		186		232		2,519		502
Temporary investments		2		3		94		101				2		200		183
Accounts receivable		877		753		363		274		50		45		688		382		378		431
Inventories for resale		3		2		21		25						38		34
Due from Crown corporations and agencies		9		5		66		35		1		1		11		15
Due from other governments		79		51		59		72		45		15		207		124
Due from self–supported Crown corporations and agencies						83		76						57		71
Equity in self–supported Crown corporations and agencies						95		122						7,458		6,746
Loans, advances and mortgages receivable		682		5		794		889		1		1		61		80
Other investments		76		73		2,675		2,334						214		217		9		9
Sinking fund investments						58		52										492		692
Loans for purchase of assets, recoverable from agencies																		40,108		36,777
		3,905		2,550		7,477		6,819		119		72		9,120		8,084		43,506		38,411

PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

Supplementary Statement to the Summary Financial Statements

Consolidated Statement of Financial Position by Sector—Continued

as at March 31, 2021

	In Millions
															Protection of Persons
	Other2				Transportation				General Government3						and Property					Adjustments4						Total
	2021		2020		2021		2020		2021			2020			2021		2020			2021			2020			2021		2020
		$		$		$		$		$			$			$		$			$			$			$		$
Financial Assets
Cash and cash equivalents		109		89		77		84		321			317			54		47			(2,471	)		(2,186	)		6,163		3,590
Temporary investments		101		106																							397		395
Accounts receivable		294		288		44		41		3,312			2,994			98		97			(133	)		(140	)		5,971		5,165
Inventories for resale		2		1		3		1		2			2			2		3									71		68
Due from Crown corporations and agencies		25				39		39													(151	)		(95	)		0		0
Due from other governments		95		23		124		165		775			239			327		243									1,711		932
Due from self–supported Crown corporations and agencies										142			169														282		316
Equity in self–supported Crown corporations and agencies						226		215		(49	)		(32	)		1,893		(536	)								9,623		6,515
Loans, advances and mortgages receivable		1,007		674						1,490			1,318			1					(15	)		(27	)		4,021		2,940
Other investments		191		185		76		76								102		79									3,343		2,973
Sinking fund investments						88		102													(146	)		(154	)		492		692
Loans for purchase of assets, recoverable from agencies																					(13,807	)		(12,009	)		26,301		24,768
		1,824		1,366		677		723		5,993			5,007			2,477		(67	)		(16,723	)		(14,611	)		58,375		48,354

95

PROVINCE OF BRITISH COLUMBIA	96
PUBLIC ACCOUNTS 2020/21

Supplementary Statement to the Summary Financial Statements

Consolidated Statement of Financial Position by Sector—Continued

as at March 31, 2021

	In Millions
																			Natural Resources
																			and Economic
	Health						Education						Social Services						Development				Debt Servicing1
	2021			2020			2021			2020			2021			2020			2021		2020		2021			2020
		$			$			$			$			$			$			$		$		$			$
Liabilities
Accounts payable and accrued liabilities		2,158			1,704			1,532			1,464			217			134			1,484		1,432		810			660
Employee future benefits		1,362			1,278			735			652			34			27			42		34
Due to other governments		90			70			94			32									13		24
Due to Crown corporations, agencies and trust funds		59			12			8			4			6			2			642		652		2,480			2,197
Due to the Province of British Columbia								4						6			6			10		11
Deferred revenue		3,382			2,448			4,726			4,447			6			8			971		941		71			77
Employee pension plans
Taxpayer-supported debt		1,876			1,803			979			838									176		182		56,021			42,991
Self–supported debt																								26,275			24,847
		8,927			7,315			8,078			7,437			269			177			3,338		3,276		85,657			70,772
Net assets (liabilities)		(5,022	)		(4,765	)		(601	)		(618	)		(150	)		(105	)		5,782		4,808		(42,151	)		(32,361	)
Non–financial Assets
Tangible capital assets		9,135			8,643			18,276			17,327			154			169			2,284		2,276
Restricted assets		5			5			1,998			1,926
Prepaid program costs		695			357			104			86			23			24			267		262
Other assets		190			89			4			7													68			42
		10,025			9,094			20,382			19,346			177			193			2,551		2,538		68			42
Accumulated surplus (deficit)		5,003			4,329			19,781			18,728			27			88			8,333		7,346		(42,083	)		(32,319	)

PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

Supplementary Statement to the Summary Financial Statements

Consolidated Statement of Financial Position by Sector—Continued

as at March 31, 2021

	In Millions
															Protection of Persons
	Other2				Transportation						General Government3				and Property					Adjustments4						Total
	2021		2020		2021			2020			2021		2020		2021		2020			2021			2020			2021			2020
		$		$		$			$			$		$		$		$			$			$			$			$
Liabilities
Accounts payable and accrued liabilities		700		540		692			652			1,079		878		388		397			(167	)		(177	)		8,893			7,684
Employee future benefits		17		13		36			31			575		570		64		49									2,865			2,654
Due to other governments		55		20		2						198		38		171		252									623			436
Due to Crown corporations, agencies and trust funds		68		67		9			8							1		1			(2,563	)		(2,221	)		710			722
Due to the Province of British Columbia		4		3		2			2												(26	)		(22	)		0			0
Deferred revenue		202		174		2,489			2,212			15		12		323		307									12,185			10,626
Employee pension plans												1		1													1			1
Taxpayer-supported debt		770		223		13,801			12,505			326		318							(13,967	)		(12,191	)		59,982			46,669
Self-supported debt																											26,275			24,847
		1,816		1,040		17,031			15,410			2,194		1,817		947		1,006			(16,723	)		(14,611	)		111,534			93,639
Net assets (liabilities)		8		326		(16,354	)		(14,687	)		3,799		3,190		1,530		(1,073	)		0			0			(53,159	)		(45,285	)
Non-financial Assets
Tangible capital assets		2,840		2,337		18,333			17,566			1,649		1,607		127		115			(17	)		(17	)		52,781			50,023
Restricted assets																											2,003			1,931
Prepaid program costs		58		49		28			27			84		83		5		4									1,264			892
Other assets						56			70																		318			208
		2,898		2,386		18,417			17,663			1,733		1,690		132		119			(17	)		(17	)		56,366			53,054
Accumulated surplus (deficit)		2,906		2,712		2,063			2,976			5,532		4,880		1,662		(954	)		(17	)		(17	)		3,207			7,769

 ¹Debt servicing represents the financial impacts of activities related to management of the public debt.

²The Other Sector consists of activities, such as housing and culture, which cannot be allocated to any of the specifically described sector classifications.

³Includes the Legislature, tax collection and administration, Canadian Health and Social Transfers from the federal government, liquor and gaming profits, general administration and central agency services such as accounting, auditing, budgeting, insurance and risk management to all sectors.

⁴Represents sectoral adjustments to conform to government accounting policies and to eliminate transactions between sectors.

97

PROVINCE OF BRITISH COLUMBIA	98
PUBLIC ACCOUNTS 2020/21

Supplementary Statement to the Summary Financial Statements

Consolidated Statement of Operations by Sector

for the Fiscal Year Ended March 31, 2021

	In Millions
													Natural Resources
													and Economic
	Health				Education				Social Services				Development				Debt Servicing1
	2021		2020		2021		2020		2021		2020		2021		2020		2021		2020
	$		$		$		$		$		$		$		$		$		$
Revenue
Taxation
Contributions from the federal government		201		203		1,530		1,127		169		152		174		167
Fees and licenses		482		1,581		2,624		2,725		3		4		141		140
Miscellaneous		1,150		1,282		1,054		1,526		16		19		162		261
Contributions from the provincial government / net earnings of self-supported Crown corporations and agencies		83		62		282		235		20		18		850		854
Natural resources														2,403		2,268
Investment income		12		27		256		222		1		2		25		24		1,302		1,347
Total revenue		1,928		3,155		5,746		5,835		209		195		3,755		3,714		1,302		1,347

PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

Supplementary Statement to the Summary Financial Statements

Consolidated Statement of Operations by Sector—Continued

for the Fiscal Year Ended March 31, 2021

	In Millions
													Protection of Persons
	Other2				Transportation				General Government3				and Property					Adjustments4						Total
	2021		2020		2021		2020		2021		2020		2021		2020			2021			2020			2021		2020
	$		$		$		$		$		$		$		$			$			$			$		$
Revenue
Taxation		100		96		479		575		33,587		32,595													34,166		33,266
Contributions from the federal government		546		129		716		156		9,334		7,527		224		74									12,894		9,535
Fees and licenses		32		33		41		57		35		68		971		964									4,329		5,572
Miscellaneous		67		102		177		102		418		442		216		220			(124	)		(116	)		3,136		3,838
Contributions from the provincial government / net earnings of self–supported Crown corporations and agencies		69		42		24		27		1,580		2,444		1,570		(366	)		(514	)		(398	)		3,964		2,918
Natural resources																									2,403		2,268
Investment income		6		12		10		12		63		92		4		3			(415	)		(478	)		1,264		1,263
Total revenue		820		414		1,447		929		45,017		43,168		2,985		895			(1,053	)		(992	)		62,156		58,660

99

PROVINCE OF BRITISH COLUMBIA	100
PUBLIC ACCOUNTS 2020/21

Supplementary Statement to the Summary Financial Statements

Consolidated Statement of Operations by Sector—Continued

for the Fiscal Year Ended March 31, 2021

	In Millions
																			Natural Resources
																			and Economic
	Health						Education						Social Services						Development						Debt Servicing1
	2021			2020			2021			2020			2021			2020			2021			2020			2021			2020
	$			$			$			$			$			$			$			$			$			$
Expense
Salaries and benefits		10,519			9,380			10,577			10,136			559			538			775			728
Government transfers		6,243			6,168			1,456			1,251			5,905			4,108			2,396			1,975
Operating costs		8,354			7,395			1,883			2,301			1,299			1,211			660			679
Interest		121			122			43			43									22			22			2,508			2,551
Amortization		617			608			898			862			22			24			128			120
Other		253			197			202			238			67			67			284			297
Operating expense		26,107			23,870			15,059			14,831			7,852			5,948			4,265			3,821			2,508			2,551
Surplus (deficit) for the Fiscal Year ended March 31		(24,179	)		(20,715	)		(9,313	)		(8,996	)		(7,643	)		(5,753	)		(510	)		(107	)		(1,206	)		(1,204	)

PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

Supplementary Statement to the Summary Financial Statements

Consolidated Statement of Operations by Sector—Continued

for the Fiscal Year Ended March 31, 2021

	In Millions
																	Protection of Persons
	Other2						Transportation						General Government3				and Property					Adjustments4						Total
	2021			2020			2021			2020			2021		2020		2021		2020			2021			2020			2021			2020
	$			$			$			$			$		$		$		$			$			$			$			$
Expense
Salaries and benefits		228			212			219			207			598		640		1,083		991									24,558			22,832
Government transfers		2,307			2,030			1,268			254			2,419		112		820		839			(351	)		(266	)		22,463			16,471
Operating costs		196			155			1,248			1,000			521		540		313		262			(4	)		(7	)		14,470			13,536
Interest		11			11			417			443			15		14							(415	)		(479	)		2,722			2,727
Amortization		99			97			624			618			130		116		29		24									2,547			2,469
Other		21			20			13			60			267		278		34		30			(283	)		(240	)		864			947
Operating expense		2,868			2,525			3,789			2,582			3,950		1,700		2,279		2,146			(1,053	)		(992	)		67,624			58,982
Surplus (deficit) for the Fiscal Year ended March 31		(2,048	)		(2,111	)		(2,342	)		(1,653	)		41,067		41,468		706		(1,251	)		0			0			(5,468	)		(322	)

¹Debt servicing represents the financial impacts of activities related to management of the public debt.

²The Other Sector consists of activities, such as housing and culture, which cannot be allocated to any of the specifically described sector classifications.

³Includes the Legislature, tax collection and administration, Canadian Health and Social Transfers from the federal government, liquor and gaming profits, general administration and central agency services such as accounting, auditing, budgeting, insurance and risk management to all sectors.

⁴Represents sectoral adjustments to conform to government accounting policies and to eliminate transactions between sectors.

101

PROVINCE OF BRITISH COLUMBIA	102
PUBLIC ACCOUNTS 2020/21

Supplementary Statement to the Summary Financial Statements

Statement of Financial Position

for Self–supported Crown Corporations and Agencies¹

as at March 31, 2021

	In Millions
	Natural Resources			Protection of
	and Economic			Persons and		General			2021		2020
	Development2			Property3		Government4			Sub-Total		Sub-Total
	$			$		$			$		$
Assets
Cash and cash equivalents		111			20		57			188		305
Accounts receivable		965			2,045		65			3,075		3,221
Inventories		182					240			422		388
Other investments		1,128			21,154					22,282		19,531
Tangible capital assets		33,617			488		706			34,811		32,612
Other assets		5,191			468		32			5,691		6,436
Total Assets		41,194			24,175		1,100			66,469		62,493
Liabilities
Accounts payable and accrued liabilities		5,083			19,786		510			25,379		25,056
Deferred revenue		2,852			2,466		36			5,354		6,030
Due to Province of British Columbia		57					142			199		240
Debt due to Province of British Columbia		25,283					180			25,463		24,168
Other debt		1,432			61		281			1,774		1,827
		34,707			22,313		1,149			58,169		57,321
Equity
Investment by Province of British Columbia		46								46		46
Other comprehensive income		(19	)		730		(24	)		687		(216	)
Unremitted earnings–end of year		6,460			1,132		(25	)		7,567		5,342
		6,487			1,862		(49	)		8,300		5,172
Total Liabilities and Equity		41,194			24,175		1,100			66,469		62,493

PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

Supplementary Statement to the Summary Financial Statements

Statement of Financial Position

for Self–supported Crown Corporations and Agencies¹

as at March 31, 2021—Continued

	In Millions
								Protection of
			Natural					Persons and
	Education		Resources		Transportation			Property		2021		2020
	subsidiaries5		subsidiaries6		subsidiaries7			subsidiaries8		Grand Total		Grand Total
	$		$		$			$		$		$
Assets
Cash and cash equivalents		62		24		121			1		396		530
Accounts receivable		68		503		3					3,649		3,827
Inventories		69									491		448
Other investments		27		10		244			69		22,632		19,832
Tangible capital assets		607		870		195			1		36,484		34,320
Other assets		2		261		3					5,957		6,708
Total Assets		835		1,668		566			71		69,609		65,665
Liabilities
Accounts payable and accrued liabilities		69		17		314			27		25,806		25,514
Deferred revenue		32		1		26			12		5,425		6,093
Due to Province of British Columbia		83									282		316
Debt due to Province of British Columbia		36									25,499		24,204
Other debt		520		679					1		2,974		3,023
		740		697		340			40		59,986		59,150
Equity
Investment by Province of British Columbia		73		941		107					1,167		1,166
Other comprehensive income						(7	)		2		682		(224	)
Unremitted earnings–end of year		22		30		126			29		7,774		5,573
		95		971		226			31		9,623		6,515
Total Liabilities and Equity		835		1,668		566			71		69,609		65,665

¹corporations and agencies report under International Financial Reporting Standards. These statements include related party transactions between self–supported Crown corporations and with taxpayer–supported entities. No elimination entries are recorded for these transactions. They are in the normal course of operations and are recorded at the exchange amount. The normal course of operations includes trade, financial and legal services, shared administration, business relationships, collaboration on projects, carbon offsets, and payment of cash dividends. Significant balances are disclosed in the notes to these financial statements.

²British Columbia Hydro and Power Authority and Columbia Power Corporation.

³Insurance Corporation of British Columbia.

⁴British Columbia Liquor Distribution Branch and British Columbia Lottery Corporation.

⁵Self–supported subsidiaries, including Great Northern Way Campus Trust, Heritage Realty Properties Ltd., SFU Community Trust, UBC Properties Trust, and Vancouver Island Technology Park Trust, of post–secondary institutions.

⁶Columbia Basin Trust joint ventures with Columbia Power Corporation (Brilliant Power Corporation, Brilliant Expansion Power Corporation, Arrow Lakes Power Corporation, and Waneta Expansion Power Corporation). Columbia Power Corporation’s equity investment is included as an integral component of Columbia Power Corporation.

⁷British Columbia Rail Company, a subsidiary of BC Transportation Financing Authority.

⁸Real Estate Errors and Omissions Insurance Corporation, a subsidiary of Real Estate Council of British Columbia.

103

PROVINCE OF BRITISH COLUMBIA PUBLIC ACCOUNTS 2020/21 104

Supplementary Statement to the Summary Financial Statements

Summary of Results of Operations and Statement

of Equity for Self–supported Crown Corporations and Agencies¹

for the Fiscal Year Ended March 31, 2021

	In Millions
	Natural Resources			Protection of
	and Economic			Persons and			General			2021			2020
	Development2			Property3			Government4			Sub–Total			Sub–Total
	$			$			$			$			$
Revenue		6,496			6,539			5,114			18,149			20,225
Expense		5,752			5,011			3,533			14,296			17,399
Net earnings of self–supported Crown corporations and agencies		744			1,528			1,581			3,853			2,826
Dividends		(47	)					(1,437	)		(1,484	)		(2,258	)
Adjustments to dividends								(144	)		(144	)		(247	)
Transfers (to) from deferred revenue											0			0
Increase (decrease) in unremitted earnings in self–supported Crown corporations and agencies		697			1,528			0			2,225			321
Unremitted earnings—beginning of year		5,763			(396	)		(25	)		5,342			5,021
Adjustments to unremitted earnings											0			0
Unremitted earnings—end of year		6,460			1,132			(25	)		7,567			5,342
Accumulated other comprehensive income—beginning of year		(44	)		(165	)		(7	)		(216	)		38
Adjustments to accumulated other comprehensive income											0			0
Other comprehensive income		25			895			(17	)		903			(254	)
Accumulated other comprehensive income—end of year		(19	)		730			(24	)		687			(216	)
Investment by Province of British Columbia		46									46			46
Equity in self–supported Crown corporations and agencies for the year		6,487			1,862			(49	)		8,300			5,172

PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

Supplementary Statement to the Summary Financial Statements

Summary of Results of Operations and Statement

of Equity for Self–supported Crown Corporations and Agencies¹

for the Fiscal Year Ended March 31, 2021—Continued

	In Millions
										Protection of
				Natural						Persons and
	Education			Resources			Transportation			Property			2021			2020
	subsidiaries5			subsidiaries6			subsidiaries7			subsidiaries8			Grand Total			Grand Total
	$			$			$			$			$			$
Revenue		66			142			27			13			18,397			20,473
Expense		43			68			16			10			14,433			17,555
Net earnings of self-supported Crown corporations and agencies		23			74			11			3			3,964			2,918
Dividends		(27	)		(84	)								(1,595	)		(2,329	)
Adjustments to dividends														(144	)		(247	)
Transfers (to) from deferred revenue		(24	)											(24	)		(49	)
Increase (decrease) in unremitted earnings in self-supported Crown corporations and agencies		(28	)		(10	)		11			3			2,201			293
Unremitted earnings—beginning of year		50			40			115			26			5,573			5,265
Adjustments to unremitted earnings																	15
Unremitted earnings—end of year		22			30			126			29			7,774			5,573
Accumulated other comprehensive income—beginning of year								(7	)		(1	)		(224	)		31
Adjustments to accumulated other comprehensive income
Other comprehensive income											3			906			(255	)
Accumulated other comprehensive income—end of year		0			0			(7	)		2			682			(224	)
Investment by Province of British Columbia		73			941			107						1,167			1,166
Equity in self–supported Crown corporations and agencies for the year		95			971			226			31			9,623			6,515

¹Self–supported Crown corporations and agencies report under International Financial Reporting Standards. These statements include related party transactions between self–supported Crown corporations and with taxpayer–supported entities. No elimination entries are recorded for these transactions. They are in the normal course of operations and are recorded at the exchange amount. The normal course of operations includes trade, financial and legal services, shared administration, business relationships, collaboration on projects, carbon offsets, and payment of cash dividends. Significant balances are disclosed in the notes to these financial statements.

²British Columbia Hydro and Power Authority and Columbia Power Corporation.

³Insurance Corporation of British Columbia.

⁴British Columbia Liquor Distribution Branch and British Columbia Lottery Corporation.

⁵Self–supported subsidiaries, including Great Northern Way Campus Trust, Heritage Realty Properties Ltd., SFU Community Trust, UBC Properties Trust, and Vancouver Island Technology Park Trust, of post–secondary institutions.

⁶Columbia Basin Trust joint ventures with Columbia Power Corporation (Brilliant Power Corporation, Brilliant Expansion Power Corporation, Arrow Lakes Power Corporation, and Waneta Expansion Power Corporation). Columbia Power Corporation’s equity investment is included as an integral component of Columbia Power Corporation.

⁷British Columbia Rail Company, a subsidiary of BC Transportation Financing Authority.

⁸Real Estate Errors and Omissions Insurance Corporation, a subsidiary of Real Estate Council of British Columbia.

105

PROVINCE OF BRITISH COLUMBIA	106
PUBLIC ACCOUNTS 2020/21

Supplementary Statement to the Summary Financial Statements

Consolidated Statement of Tangible Capital Assets¹

for the Fiscal Year Ended March 31, 2021

										In Millions
													Computer
	Land and Land						Highway			Transportation			Hardware/						2021			2020
	Improvements			Building			Infrastructure			Equipment			Software			Other3			Total			Total
	$			$			$			$			$			$			$			$
Historical Cost2
Opening Cost		5,865			40,040			24,557			4,172			4,942			7,008			86,584			82,503
Additions		349			2,627			983			392			498			579			5,428			4,772
Disposals and valuation adjustments		(26	)		(392	)		(15	)		(52	)		(180	)		(341	)		(1,006	)		(691	)
		6,188			42,275			25,525			4,512			5,260			7,246			91,006			86,584
Accumulated Amortization
Opening balance		(334	)		(15,493	)		(11,282	)		(1,568	)		(3,034	)		(4,850	)		(36,561	)		(34,675	)
Amortization expense		(26	)		(1,037	)		(552	)		(101	)		(349	)		(482	)		(2,547	)		(2,469	)
Effect of disposals and valuation adjustments		1			320			11			51			170			330			883			583
		(359	)		(16,210	)		(11,823	)		(1,618	)		(3,213	)		(5,002	)		(38,225	)		(36,561	)
Net book value for the year ended March 31, 2021		5,829			26,065			13,702			2,894			2,047			2,244			52,781
Net book value for the year ended March 31, 2020		5,531			24,547			13,275			2,604			1,908			2,158						50,023

¹ This statement includes assets that are held on capital leases at March 31, 2021 at a gross value of $330 million less accumulated amortization of $(115) million for a net book value totalling $215 million (2020: gross value of $383 million less accumulated amortization of $(165) million for a net book value of $218 million) comprised of: heavy equipment gross $2 million less accumulated amortization $(2) million for a net book value of nil (2020: gross $2 million less accumulated amortization $(2) million for a net book value of nil; computer hardware/software gross $61 million less accumulated amortization $(29) million for a net book value of $32 million (2020: gross $105 million less accumulated amortization $(79) million for a net book value of $26 million); buildings gross $249 million less accumulated amortization $(68) million for a net book value of $181 million (2020: gross $251 million less accumulated amortization $(60) million for a net book value $191 million); and other assets gross $18 million less accumulated amortization $(16) million for a net book value of $2 million) (2020: gross $26 million less accumulated amortization $(24) million for a net book value of $2 million).

² Historical cost includes work–in–progress at March 31, 2021 totalling $5,548 million (2020: $4,584 million) comprised of: buildings $2,884 million (2020: $2,490 million); land improvements $69 million (2020: $63 million); highway infrastructure $913 million (2020: $785 million); transportation equipment $485 million (2020: $251 million); computer hardware/software $1,024 million (2020: $888 million); and specialized equipment $173 million (2020: $107 million). Work–in–progress is not amortized. Work–in–progress includes capitalized interest expense at March 31, 2021 totalling $8 million (2020: $12 million).

³ “Other” at net book value includes office furniture and equipment $833 million (2020: $872 million), vehicles $102 million (2020: $98 million), machinery $1,142 million (2020: $1,078 million) and miscellaneous $166 million (2020: $110 million).

PROVINCE OF BRITISH COLUMBIA	107
PUBLIC ACCOUNTS 2020/21

Supplementary Statement to the

Summary Financial Statements

Consolidated Statement of Guaranteed Debt

as at March 31, 2021

Guaranteed debt represents the debt of organizations that has been explicitly guaranteed or indemnified by the government under the authority of a statute as to net principal or redemption provisions. These organizations may include municipalities and other governments, private enterprises and individuals, minority interests of provincial Crown corporations and agencies, and SUCH¹ sector entities.

	In Millions
	2021					2020
	Maximum					Maximum
	Guarantee		Net			Guarantee		Net
	Authorized		Outstanding			Authorized		Outstanding
	$		$			$		$
Taxpayer–supported Guaranteed Debt
General government:
Homeowner Protection Act loan guarantees2		375					375
Subtotal, general government		375		0			375		0
Natural resources and economic development:
Financial Administration Act:
Feeder’s Association Loan Guarantee		13		4			13		5
Subtotal, natural resources and economic development		13		4			13		5
Total taxpayer–supported guaranteed debt		388		4			388		5
Self–supported Guaranteed Debt
Hydro and Power Authority Act bonds and debentures3		10		10			10		10
Total self–supported guaranteed debt		10		10			10		10
Grand total, all guaranteed debt		398		14			398		15
Provision for probable payout				(1	)				(1	)
Net total, all guaranteed debt		398		13			398		14

¹School districts, universities, colleges and health authorities/hospital societies.

²Homeowner Protection Act loan guarantees include indemnities provided to Canada Mortgage and Housing Corporation for any claims made on reconstruction loans made to homeowners for repairs to homes with premature building envelope failure.

³The government has unconditionally guaranteed the payment of principal and interest for $10 million (2020: $10 million) of debentures issued to the Canada Pension Plan Investment Fund that matures on August 9, 2024 with a coupon rate of 5.54%.

PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

This page intentionally left blank

Supplementary Information

(Unaudited)

The following unaudited supplementary information is intended to provide additional information to financial statement readers and includes:

a) the impacts of the Crown corporations and the school districts, universities, colleges, institutes and health organizations (SUCH) sector on the province’s annual surplus (deficit); and

b) the Consolidated Staff Utilization.

The purpose of this information is to report organizational impacts on the Summary Financial Statements.

PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

This page intentionally left blank

PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

Adjusted Net Income of Crown Corporations, Agencies and the SUCH Sector¹

for the Fiscal Year Ended March 31, 2021

(Unaudited)

	In Millions
														Adjusted
	Revenue		Expense			Net Income			Adjustments			Dividends		Net Income2
		$		$			$			$			$		$
Taxpayer–supported (Government Organizations)
BC Family Maintenance Agency Ltd.		19		(19	)
BC Financial Services Authority		43		(29	)		14			2					16
BC Games Society		2		(2	)
BC Health Care Occupational Health and Safety Society
BC Infrastructure Benefits Inc.		17		(17	)
BCNET		22		(22	)					(1	)				(1	)
B.C. Pavilion Corporation		83		(83	)					(21	)				(21	)
BC Transportation Financing Authority		623		(1,383	)		(760	)		(115	)				(875	)
British Columbia Assessment Authority3		106		(99	)		7								7
British Columbia Housing Management Commission		1,904		(1,904	)					53					53
British Columbia Public School Employers’ Association		8		(8	)
British Columbia Securities Commission		70		(58	)		12								12
British Columbia Transit		350		(350	)					20					20
Canadian Blood Services		184		(179	)		5			(1	)				4
Columbia Basin Trust		14		(88	)		(74	)		3			84		13
Community Living British Columbia		1,238		(1,238	)					9					9
Community Social Services Employers’ Association of British Columbia		4		(4	)					(1	)				(1	)
Creston Valley Wildlife Management Authority Trust Fund		1		(1	)
Crown Corporations Employers’ Association
Destination BC Corp.		72		(71	)		1								1
First Peoples’ Heritage, Language and Culture Council		26		(26	)
Forest Enhancement Society of BC		80		(80	)					(74	)				(74	)
Forestry Innovation Investment Ltd.		25		(24	)		1								1
Health Employers Association of British Columbia		27		(27	)					21					21

111

112

PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

Adjusted Net Income of Crown Corporations, Agencies and the SUCH Sector¹

for the Fiscal Year Ended March 31, 2021—Continued

(Unaudited)

	In Millions
														Adjusted
	Revenue		Expense			Net Income			Adjustments			Dividends		Net Income2
		$		$			$			$			$		$
Taxpayer–supported (Government Organizations)—Continued
InBC Investment Corp.		8		(1	)		7								7
Industry Training Authority		116		(116	)					(3	)				(3	)
Infrastructure BC Inc.		11		(10	)		1								1
Innovate BC		16		(16	)					(1	)
Knowledge Network Corporation		17		(14	)		3			(3	)				(1	)
Legal Services Society		105		(105	)
Nechako–Kitamaat Development Fund Society		1		(1	)
Oil and Gas Commission		86		(85	)		1			1					2
Organized Crime Agency of British Columbia Society		21		(23	)		(2	)							(2	)
Post–Secondary Employers’ Association		3		(3	)
Provincial Rental Housing Corporation		270		(93	)		177			226					403
Real Estate Council of British Columbia		19		(19	)
Real Estate Foundation of British Columbia		22		(21	)		1			10					11
The British Columbia Council for International Education		2		(2	)
The Royal British Columbia Museum Corporation		38		(25	)		13			6					19
Taxpayer–supported Crown corporations and agencies		5,653		(6,246	)		(593	)		131			84		(378	)
SUCH Sector
School Districts		7,245		(7,084	)		161			652					813
Universities		5,480		(5,273	)		207			70			27		304
Colleges and Institutes		1,443		(1,431	)		12			62					74
Health Authorities		19,516		(19,155	)		361			688					1,049
Hospital Societies		1,196		(1,198	)		(2	)		12					10
SUCH sector		34,880		(34,141	)		739			1,484			27		2,250
Net impact of taxpayer–supported Crown corporations, agencies and SUCH sector		40,533		(40,387	)		146			1,615			111		1,872

PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

Adjusted Net Income of Crown Corporations, Agencies and the SUCH Sector¹

for the Fiscal Year Ended March 31, 2021—Continued

(Unaudited)

	In Millions
														Adjusted
	Revenue		Expense			Net Income			Adjustments		Dividends			Net Income2
		$		$			$			$		$			$
Self–supported (Government Enterprises)
British Columbia Hydro and Power Authority		6,414		(5,726	)		688								688
British Columbia Liquor Distribution Branch		4,148		(2,987	)		1,161					(1,161	)
British Columbia Lottery Corporation		966		(546	)		420					(420	)
Columbia Power Corporation		82		(26	)		56					(47	)		9
Insurance Corporation of British Columbia		6,539		(5,011	)		1,528								1,528
Sub–total		18,149		(14,296	)		3,853			0		(1,628	)		2,225
British Columbia Railway Company4		27		(16	)		11								11
Columbia Basin Trust joint ventures5		142		(68	)		74					(84	)		(10	)
Real Estate Errors and Omissions Insurance Corporation6		13		(10	)		3								3
Great Northern Way Campus Trust7		8		(6	)		2					(1	)		1
Heritage Realty Properties Ltd8		4		(7	)		(3	)							(3	)
SFU Community Trust		1					1								1
UBC Properties Investments Ltd		17					17					(15	)		2
Vancouver Island Technology Park Trust8		6		(4	)		2					(2	)
Miscellaneous		30		(26	)		4					(9	)		(5	)
Sub–total		248		(137	)		111			0		(111	)		0
Net impact of self–supported Crown corporations and agencies		18,397		(14,433	)		3,964			0		(1,739	)		2,225

¹This schedule does not include elimination entries between entities.

²Adjusted Net Income includes the effect of contributions paid to the Consolidated Revenue Fund to indicate the impacts that the Crown corporations and agencies and the SUCH sector have made on the Consolidated Revenue Fund operating result. The Adjusted Net Income of Crown corporations and agencies and the SUCH sector combined with the Consolidated Revenue Fund operating result, after elimination entries between entities, make up the Summary Financial Statements surplus (deficit).

³The revenues and expenses reported for the British Columbia Assessment Authority include a stub period reversal of January-March 2020 and an inclusion of the stub period of January-March 2021.

⁴Subsidiary of BC Transportation Financing Authority.

⁵Columbia Basin Trust joint ventures with Columbia Power Corporation (Brilliant Power Corporation, Brilliant Expansion Power Corporation, Arrow Lakes Power Corporation, and Waneta Expansion Power Corporation).

⁶Subsidiary of Real Estate Council of British Columbia.

⁷Subsidiary owned 25% each by Emily Carr University of Art & Design, British Columbia Institute of Technology, The University of British Columbia, and Simon Fraser University.

⁸Subsidiaries of the University of Victoria.

113

114

PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

SUCH ¹ Statement of Financial Position

as at March 31, 2021

(Unaudited)

	In Millions
	Health
	Authorities &
	Hospital						Colleges and			School		2021			2020
	Societies2			Universities			Institutes			Districts		Total			Total
		$			$			$			$		$			$
Financial Assets
Cash and cash equivalents		2,158			735			486			1,938		5,317			4,460
Temporary investments		2			61			14			21		98			99
Accounts receivable		418			269			30			71		788			679
Inventories for resale		261			12			8					281			50
Due from Crown corporations, agencies and trust funds		548			51			11			19		629			344
Due from other governments		59			12			4			7		82			57
Due from self–supported Crown corporations and agencies					81			2					83			75
Equity in self–supported Crown corporations and agencies					78			15			2		95			119
Loans, advances and mortgages receivable		797			30								827			228
Other investments		1			3,356			178			21		3,556			2,753
Sinking fund investments					51			13					64			60
Financial assets before accounting adjustments		4,244			4,736			761			2,079		11,820			8,924
Policy accounting adjustments		(285	)		(879	)		(13	)		30		(1,147	)		(424	)
Financial assets		3,959			3,857			748			2,109		10,673			8,500

PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

SUCH ¹ Statement of Financial Position

as at March 31, 2021—Continued

(Unaudited)

	In Millions
	Health
	Authorities &
	Hospital						Colleges and			School			2021			2020
	Societies2			Universities			Institutes			Districts			Total			Total
	$			$			$			$			$			$
Liabilities
Accounts payable and accrued liabilities		1,526			592			183			589			2,890			2,471
Employee future benefits		1,339			383			95			249			2,066			1,873
Due to other governments		73			1			8						82			60
Due to Crown corporations, agencies and trust funds		56			9			6			4			75			48
Deferred revenue		8,865			6,892			1,494			7,242			24,493			21,712
Taxpayer–supported debt		1,876			852			103			24			2,855			2,640
Liabilities before accounting adjustments		13,735			8,729			1,889			8,108			32,461			28,804
Policy accounting adjustments		(5,614	)		(3,182	)		(1,083	)		(6,769	)		(16,648	)		(14,871	)
Liabilities		8,121			5,547			806			1,339			15,813			13,933
Net liabilities		(4,162	)		(1,690	)		(58	)		770			(5,140	)		(5,433	)
Non–financial Assets
Tangible capital assets		9,246			7,423			1,655			9,186			27,510			26,075
Restricted assets		5			1,948			46			2			2,001			1,929
Prepaid program costs		388			73			12			18			491			257
Other assets		188						1			3			192			95
Non–financial assets before accounting adjustments		9,827			9,444			1,714			9,209			30,194			28,356
Policy accounting adjustments		93			(18	)		(8	)		(9)			58			(56	)
Non–financial assets		9,920			9,426			1,706			9,200			30,252			28,300
Accumulated surplus (deficit)		5,758			7,736			1,648			9,970			25,112			22,867

¹School districts, universities, colleges, institutes, and health organizations.

²These numbers include inter–entity eliminations between Health Authorities and Hospital Societies.

115

116

PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

SUCH ¹ Statement of Operations

for the Fiscal Year Ended March 31, 2021

(Unaudited)

	In Millions
	Health
	Authorities &
	Hospital				Colleges and		School		2021		2020
	Societies2		Universities		Institutes		Districts		Total		Total
	$		$		$		$		$		$
Revenue
Contributions from the federal government		30		578		23		15		646		577
Fees and licenses		372		1,896		523		191		2,982		3,184
Contributions from the provincial government/Crown corporations and agencies		18,693		2,093		808		6,762		28,356		25,065
Miscellaneous		509		702		76		259		1,546		2,120
Investment income		8		233		13		18		272		231
Total revenue		19,612		5,502		1,443		7,245		33,802		31,177
Expense
Salaries and benefits		10,252		3,517		1,034		5,965		20,768		19,195
Government transfers				321		15				336		307
Operating costs		8,031		855		234		764		9,884		9,357
Interest		122		38		4		1		165		165
Amortization		607		434		107		349		1,497		1,450
Other		240		108		37		5		390		277
Total operating expense		19,252		5,273		1,431		7,084		33,040		30,751
Surplus (deficit) for the year before accounting adjustments		360		229		12		161		762		426
Policy accounting adjustments		700		70		62		652		1,484		735
Surplus (deficit) for the year		1,060		299		74		813		2,246		1,161

¹School districts, universities, colleges, institutes, and health organizations.

²These numbers include inter–entity eliminations between Health Authorities and Hospital Societies.

117

PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

Summary Financial Statements

Consolidated Staff Utilization

for the Fiscal Year Ended March 31, 2021¹

(Unaudited)

				Variance
				2020/21		2020/21
	2020/21	2020/21	2019/20	Actual		vs
	Budget	Actual	Actual	To Budget		2019/20
Consolidated Revenue Fund2	31,800	32,444	31,774	644		670
Taxpayer–supported Crown corporations and agencies3	6,546	6,042	5,985	(504	)	57
Total staff utilization	38,346	38,486	37,759	140		727

The table above provides a summary of full–time equivalent (FTE) employment.

¹Staff utilization is the full–time equivalent of the number of persons employed in the fiscal year whose salaries are paid by taxpayer–supported entities within the Summary Financial Statements. The figures do not include the SUCH entities or the self–supported Crown corporations and agencies.

²See the unaudited Consolidated Revenue Fund schedules at http://gov.bc.ca/publicaccounts for details outside these financial statements.

³See Financial Statements of Government Organizations and Enterprises at http://gov.bc.ca/financepublications for details outside these financial statements.

PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

This page intentionally left blank

Consolidated Revenue Fund

Extracts

(Unaudited)

The following unaudited Consolidated Revenue Fund Extracts are intended to provide additional information to financial statement readers and includes details of the Consolidated Revenue Fund.

The purpose of this information is to reflect management accountability including appropriation control.

The accounting policies applied for this unaudited information are different in some cases from the generally accepted accounting principles followed for the audited Summary Financial Statements. For example, in order to reflect different management accountabilities, the Consolidated Revenue Fund nets recoveries against expenses, nets sinking funds against debt and nets sinking fund earnings against interest expense.

 

PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

This page intentionally left blank

PROVINCE OF BRITISH COLUMBIA	121
PUBLIC ACCOUNTS 2020/21

Consolidated Revenue Fund¹

Statement of Financial Position

as at March 31, 2021

(Unaudited)

	In Millions
	2021		2020
	$		$
Financial Assets
Cash and cash equivalents	2,874		851
Accounts receivable	5,297		4,637
Inventories for resale	51		45
Due from other governments	1,568		841
Due from Crown corporations and agencies	210		240
Investments in Crown corporations and agencies	594		594
Loans, advances and mortgages receivable	2,367		2,158
Other investments	354		348
Loans for purchase of assets, recoverable from agencies	40,107		36,777
	53,422		46,491
Liabilities
Accounts payable and accrued liabilities	5,133		4,469
Employee future benefits	724		688
Due to other governments	540		375
Due to Crown corporations, agencies and trust funds	3,509		2,597
Deferred revenue	1,262		1,085
Employee pension plans	1		1
Taxpayer–supported debt	56,111		42,865
Self–supported debt	26,019		24,600
	93,299		76,680
Net assets (liabilities)	(39,877	)	(30,189	)
Non–financial Assets
Tangible capital assets	3,364		3,267
Prepaid program costs	419		419
Other assets	68		42
	3,851		3,728
Accumulated operating result	(36,026	)	(26,461	)

¹The Consolidated Revenue Fund includes the General Fund and the BC Prosperity Fund.

122	PROVINCE OF BRITISH COLUMBIA
	PUBLIC ACCOUNTS 2020/21

Consolidated Revenue Fund¹

Statement of Operations

for the Fiscal Year Ended March 31, 2021

(Unaudited)

	In Millions
	2021				2020
	Estimates 2		Actual		Actual
	$		$		$
Revenue
Taxation	34,587		33,494		32,501
Contributions from the federal government	7,974		9,643		7,668
Other revenue	1,539		1,529		2,495
Dividends	2,271		1,484		2,063
Natural resources	1,905		2,167		2,019
	48,276		48,317		46,746
Expense
Health	23,689		25,388		22,141
Education	10,519		10,622		9,973
Social services	6,063		7,659		5,758
Natural resources and economic development	2,522		3,540		2,783
Interest3	1,177		1,231		1,214
Other	2,196		2,445		2,064
Transportation	897		1,539		889
General government	1,600		3,539		1,197
Protection of persons and property	1,545		1,919		1,801
	50,208		57,882		47,820
Operating result for the year	(1,932	)	(9,565	)	(1,074	)
Accumulated operating result —beginning of year			(26,461	)	(25,387	)
Accumulated operating result —end of year			(36,026	)	(26,461	)

¹The Consolidated Revenue Fund includes the General Fund and the BC Prosperity Fund.

²The estimated amount consists of the Main Estimates presented to the Legislative Assembly on February 18, 2020. It does not include other authorizations granted in subsequent Supplementary Estimates or under statutory authority of $9,880 million (2020: $720 million)

³Interest expense does not include the following: interest of $1,264 million (2020: $1,315 million) on cost of borrowing for relending to government bodies; and interest of $13 million (2020: $22 million) funded by sinking fund earnings. These amounts are not included because the interest expense and recovery are offsetting.

PROVINCE OF BRITISH COLUMBIA	123
PUBLIC ACCOUNTS 2020/21

General Fund

Statement of Financial Position

as at March 31, 2021

(Unaudited)

	In Millions
	2021			2020
		$			$
Financial Assets
Cash and cash equivalents		2,337			318
Accounts receivable		5,297			4,637
Inventories for resale		51			45
Due from other governments		1,568			841
Due from Crown corporations and agencies		210			240
Investments in Crown corporations and agencies		594			594
Loans, advances and mortgages receivable		2,367			2,158
Other investments		354			348
Loans for purchase of assets, recoverable from agencies		40,107			36,777
		52,885			45,958
Liabilities
Accounts payable and accrued liabilities		5,133			4,469
Employee future benefits		724			688
Due to other governments		540			375
Due to Crown corporations, agencies and trust funds		3,509			2,597
Deferred revenue		1,262			1,085
Employee pension plans		1			1
Taxpayer-supported debt		56,111			42,865
Self-supported debt		26,019			24,600
		93,299			76,680
Net assets (liabilities)		(40,414	)		(30,722	)
Non–financial Assets
Tangible capital assets		3,364			3,267
Prepaid program costs		419			419
Other assets		68			42
		3,851			3,728
Accumulated operating result		(36,563	)		(26,994	)

124	PROVINCE OF BRITISH COLUMBIA
	PUBLIC ACCOUNTS 2020/21

General Fund

Statement of Operations

for the Fiscal Year Ended March 31, 2021

(Unaudited)

	In Millions
	2021						2020
	Estimates			Actual			Actual
	$			$			$
Revenue
Taxation		34,587			33,494			32,501
Contributions from the federal government		7,974			9,643			7,668
Other revenue		1,528			1,525			2,483
Dividends		2,271			1,484			2,063
Natural resources		1,905			2,167			2,019
		48,265			48,313			46,734
Expense
Health		23,689			25,388			22,141
Education		10,519			10,622			9,973
Social services		6,063			7,659			5,758
Natural resources and economic development		2,522			3,540			2,783
Interest		1,177			1,231			1,214
Other		2,196			2,445			2,064
Transportation		897			1,539			889
General government		1,600			3,539			1,197
Protection of persons and property		1,545			1,919			1,801
		50,208			57,882			47,820
Operating result for the year		(1,943	)		(9,569	)		(1,086	)
Accumulated operating result-beginning of year					(26,994	)		(25,908	)
Accumulated operating result-end of year					(36,563	)		(26,994	)

PROVINCE OF BRITISH COLUMBIA	125
PUBLIC ACCOUNTS 2020/21

BC Prosperity Fund

Statement of Financial Position

as at March 31, 2021

(Unaudited)

	In Millions
	2021		2020
		$		$
Financial Assets
Cash and cash equivalents		537		533
		537		533
Accumulated operating result		537		533

BC Prosperity Fund

Statement of Operations

for the Fiscal Year Ended March 31, 2021

(Unaudited)

	In Millions
	2021				2020
	Estimates		Actual		Actual
	$		$		$
Revenue
Other revenue		11		4		12
		11		4		12
Operating result for the year		11		4		12
Accumulated operating result–beginning of year				533		521
Accumulated operating result–end of year				537		533

126	PROVINCE OF BRITISH COLUMBIA
	PUBLIC ACCOUNTS 2020/21

Consolidated Revenue Fund

Statement of Cash Flow

for the Fiscal Year Ended March 31, 2021

(Unaudited)

	In Millions
	2021								2020
	Receipts		Disbursements			Net			Net
		$		$			$			$
Operating Transactions
Operating result for the year							(9,565	)		(1,074	)
Non-cash items included in surplus (deficit):
Amortization of tangible capital assets							281			254
Amortization of public debt deferred revenue and deferred charges							(82	)		(21	)
Concessionary loan adjustments (decrease)							(6	)		(4	)
(Gain) on sale of tangible capital assets							(8	)		(18	)
Valuation adjustments							40			61
Accounts receivable (increase) decrease							(668	)		85
Due from other governments (increase) decrease							(727	)		341
Due from self-supported Crown corporations and agencies decrease							30			190
Accounts payable increase (decrease)							664			(32	)
Employee future benefits increase							36			44
Due to other governments increase (decrease)							165			(114	)
Due to Crown corporations, agencies and funds increase (decrease)							912			(560	)
Employee pension plan (decrease)										(64	)
Items applicable to future operations (decrease)							(170	)		(420	)
Cash (used for) operations							(9,098	)		(1,332	)
Capital Transactions
Tangible capital assets dispositions (acquisitions)		15		(389	)		(374	)		(491	)
Cash (used for) capital		15		(389	)		(374	)		(491	)
Investment Transactions
Loans, advances and mortgages receivable issues		246		(477	)		(231	)		(236	)
Other investments—net increase		12		(18	)		(6	)		(1	)
Cash (used for) investments		258		(495	)		(237	)		(237	)
Total cash (requirement)							(9,709	)		(2,060	)

PROVINCE OF BRITISH COLUMBIA	127
PUBLIC ACCOUNTS 2020/21

Consolidated Revenue Fund

Statement of Cash Flow

for the Fiscal Year Ended March 31, 2021—Continued

(Unaudited)

	In Millions
	2021								2020
	Receipts		Disbursements			Net			Net
		$		$			$			$
Total cash (requirement) carried forward from previous page							(9,709	)		(2,060	)
Financing Transactions1
Public debt increase		41,925		(27,172	)		14,753			5,737
(Used for) purchase of assets, recoverable from agencies		12,291		(15,312	)		(3,021	)		(3,058	)
Cash derived from financing		54,216		(42,484	)		11,732			2,679
Increase in cash and cash equivalents							2,023			619
Cash and cash equivalents—beginning of year							851			232
Cash and cash equivalents—end of year							2,874			851
Cash and cash equivalents are made up of:
Cash							2,821			780
Cash equivalents							53			71
							2,874			851

¹Financing transaction receipts are from debt issues and disbursements are for debt repayments.

128	PROVINCE OF BRITISH COLUMBIA
	PUBLIC ACCOUNTS 2020/21

Consolidated Revenue Fund

Schedule of Net Revenue by Source

for the Fiscal Year Ended March 31, 2021

(Unaudited)

	In Millions
	2021						2020
	Estimates			Actual			Actual
	$			$			$
Taxation Revenue1
Personal income		11,771			11,118			10,657
Provincial sales		7,895			7,684			7,362
Corporate income		4,739			4,805			5,011
Property		2,848			2,177			2,423
Property transfer		1,586			2,098			1,609
Employer health		1,924			2,156			1,897
Carbon		1,954			1,683			1,682
Tobacco		755			711			729
Fuel		543			504			535
Other		660			652			691
Commissions on collection of public funds		(66	)		(69	)		(71	)
Valuation adjustments		(22	)		(25	)		(24	)
Total taxation revenue		34,587			33,494			32,501
Contributions from the Federal Government
Canada health and social transfers		7,683			7,743			7,494
Other contributions		291			1,900			174
Total contributions from the federal government		7,974			9,643			7,668
Other Revenue
Medical Services Plan premiums					(4	)		998
Motor vehicle licences and permits		586			570			579
Other fees and licences		517			525			482
Investment earnings		88			109			121
Miscellaneous		359			348			403
Asset dispositions		17			8			17
Commissions on collection of public funds		(7	)		(7	)		(7	)
Valuation adjustments		(21	)		(20	)		(98	)
Total other revenue		1,539			1,529			2,495
Dividends
Self–supported Crown corporations
British Columbia Liquor Distribution Branch		1,113			1,161			1,107
British Columbia Lottery Corporation		1,111			276			895
Columbia Power Corporation		47			47			61
Total dividends		2,271			1,484			2,063

PROVINCE OF BRITISH COLUMBIA	129
PUBLIC ACCOUNTS 2020/21

Consolidated Revenue Fund

Schedule of Net Revenue by Source

for the Fiscal Year Ended March 31, 2021—Continued

(Unaudited)

	In Millions
	2021						2020
	Estimated			Actual			Actual
Natural Resource Revenue2
Forests		806			1,226			930
Petroleum, natural gas and minerals		573			467			615
Water and other		534			482			487
Commissions on collection of public funds		(1	)		(1	)		(1	)
Valuation adjustments		(7	)		(7	)		(12	)
Total natural resource revenue		1,905			2,167			2,019
Net Consolidated Revenue Fund Revenue		48,276			48,317			46,746
Revenue Collected for and Transferred to Crown Corporations, Agencies and Other Entities3
Ministry of Energy, Mines and Low Carbon Innovation
Oil and Gas Commission		(45	)		(44	)		(48	)
Ministry of Finance
British Columbia Transit		(20	)		(17	)		(19	)
BC Transportation Financing Authority		(471	)		(425	)		(466	)
Cowichan Tribes		(4	)		(4	)		(4	)
Municipalities or Eligible Entities		(88	)		(34	)		(90	)
Rural Areas		(405	)		(411	)		(391	)
South Coast British Columbia Transportation Authority		(405	)		(349	)		(412	)
Ministry of Forests, Lands, Natural Resource Operations and Rural Development
Habitat Conservation Trust		(7	)		(5	)		(6	)
Total		(1,445	)		(1,289	)		(1,436	)

¹Personal income tax and corporate income tax revenues are recorded after deductions for non–refundable tax credits. Deductions allowable in the calculation of personal income tax revenue were $107 million (2020: $94 million) and corporate income tax were $97 million (2020: $144 million). The types of tax credits adjusting personal income tax and corporation income tax revenues are for foreign taxes, logging taxes, venture capital, scientific and experimental development tax, and mining flow–through share.

Personal income tax revenue was also reduced by $189 million (2020: $172 million) for the BC Tax Reduction.

Personal and corporate income tax refunds related to prior years may be issued under the International Business Activity Act. Corporate income tax refunds were $2 million (2020: $0.2 million).

Property tax revenue was recorded net of home owner grants of $857 million (2020: $852 million).

²Oil and gas royalty revenues are reported after adjustments for various royalty deduction programs such as producer cost of service allowances, deep well, marginal, ultra marginal, low production, net profit, new pool discovery and road construction. Deductions allowable in the calculation of royalty revenue were $654 million (2020: $567 million). Natural resource revenue includes mining taxes of $75 million (2020: $250 million) and logging taxes of $56 million (2020: $28 million).

The province offers credits for certain costs incurred by producers including the deep well, road and summer drilling programs. Deep well credits of $3,223 million (2020: $2,920 million), road credits of $25 million (2020: $14 million) and summer drilling credits of $3 million (2020: $3 million) have been incurred by producers and will reduce future natural gas royalties payable when wells go into production.

³The revenue collected for and transferred to Crown corporations, agencies and other entities has not been included in the Consolidated Revenue Fund.

130	PROVINCE OF BRITISH COLUMBIA
	PUBLIC ACCOUNTS 2020/21

Consolidated Revenue Fund

Schedule of Comparison of Estimated Expenses to Actual Expenses

for the Fiscal Year Ended March 31, 2021

(Unaudited)

	In Thousands
			Other
	Estimates		Authorizations			Total		Actual
	$		$			$		$
Special Offices, Ministries and Other Appropriations
Legislative Assembly		85,014					85,014		79,467
Officers of the Legislature		75,846		50,242			126,088		123,829
Office of the Premier		11,334					11,334		11,203
Advanced Education and Skills Training		2,366,498		45,799			2,412,297		2,412,157
Agriculture, Food and Fisheries		95,404		54,276			149,680		149,640
Attorney General		651,840		852,622			1,504,462		1,492,592
Children and Family Development		2,228,446		216,806			2,445,252		2,437,495
Citizens’ Services		551,650		111,818			663,468		660,224
Education		6,696,903		59,709			6,756,612		6,740,644
Energy, Mines and Low Carbon Innovation		113,631		138,512			252,143		251,991
Environment and Climate Change Strategy		244,646		466,237			710,883		707,213
Finance		837,619		961,453			1,799,072		1,774,683
Forests, Lands, Natural Resource Operations and Rural Development		843,968		232,554			1,076,522		1,073,862
Health		22,189,635		1,965,406			24,155,041		24,082,984
Indigenous Relations and Reconciliation		96,672		217,286			313,958		306,070
Jobs, Economic Recovery and Innovation		93,616		157,432			251,048		251,100
Labour		17,185		18,270			35,455		35,446
Mental Health and Addictions		9,712		29,403			39,115		39,115
Municipal Affairs		650,313		(125,234	)		525,079		524,314
Public Safety and Solicitor General		851,693		206,175			1,057,868		1,056,052
Social Development and Poverty Reduction		3,682,820		799,149			4,481,969		4,481,256
Tourism, Arts, Culture and Sport		160,753		191,973			352,726		352,360
Transportation and Infrastructure		928,920		302,630			1,231,550		1,228,809
Management of Public Funds and Debt		1,176,835		48,888			1,225,723		1,230,856
Contingencies (All Ministries) and New Programs1		1,066,042		(713,280	)		352,762		3
Contingencies (All Ministries): Pandemic Response and Economic Recovery				2,729,863			2,729,863		2,041,005
Contingencies (All Ministries): Federal and Provincial Pandemic Support				190,000			190,000
Capital Funding		2,789,336					2,789,336		1,974,680
Commissions on Collection of Public Funds		1					1
Allowances for Doubtful Revenue Accounts		1					1
Tax Transfers		1,686,000		671,880			2,357,880		2,357,880
Auditor General for Local Government		1,806					1,806		1,687
Forest Practices Board		3,861					3,861		3,721
Total expense		50,208,000		9,879,869			60,087,869		57,882,338

PROVINCE OF BRITISH COLUMBIA	131
PUBLIC ACCOUNTS 2020/21

Consolidated Revenue Fund

Schedule of Comparison of Estimated Expenses to Actual Expenses

for the Fiscal Year Ended March 31, 2021—Continued

(Unaudited)

	In Thousands
				Other
	Estimated			Authorizations			Total			Actual
	$			$			$			$
Summary of Appropriations
Voted expense		49,220,431			8,930,462			58,150,893			55,974,803
Statutory
Various Acts		10,136			746,308			756,444			755,634
Special Accounts		1,059,193			472,413			1,531,606			1,497,837
Inter–account transfers		(81,760	)		(269,314	)		(351,074	)		(345,936	)
Total expense by appropriation 2020/21		50,208,000			9,879,869			60,087,869			57,882,338
Total expense by appropriation 2019/20		48,061,000			720,496			48,781,496			47,820,111

¹The budget for contingencies has been reallocated to ministries with approved access.

132	PROVINCE OF BRITISH COLUMBIA
	PUBLIC ACCOUNTS 2020/21

Consolidated Revenue Fund

Schedule of Financing Transaction Disbursements

for the Fiscal Year Ended March 31, 2021

(Unaudited)

	In Thousands
			Other
	Estimated		Authorizations			Total		Actual
	$		$			$		$
Special Offices, Ministries and Other Appropriations
All Ministries				204,862			204,862		204,862
Legislative Assembly		5,950					5,950		4,714
Officers of the Legislature		2,614					2,614		1,787
Office of the Premier		1					1
Advanced Education and Skills Training		504					504		497
Agriculture, Food and Fisheries		691					691		673
Attorney General		7,033		25			7,058		7,058
Children and Family Development		1,569					1,569		1,071
Citizens’ Services		353,266					353,266		233,530
Education		601					601
Energy, Mines and Low Carbon Innovation		45,268					45,268		44,317
Environment and Climate Change Strategy		34,921		11,160			46,081		46,081
Finance		1,939,648		6,792			1,946,440		1,728,831
Forests, Lands, Natural Resource Operations and Rural Development		206,281					206,281		175,698
Health		579		8,418			8,997		8,997
Indigenous Relations and Reconciliation		15,001					15,001		13,637
Jobs, Economic Recovery and Innovation		1					1		1
Labour		3					3
Mental Health and Addictions		1					1
Municipal Affairs		4,261					4,261		2,430
Public Safety and Solicitor General		11,262					11,262		4,703
Social Development and Poverty Reduction		1,449					1,449		354
Tourism, Arts, Culture and Sport		1					1
Transportation and Infrastructure		5,383					5,383		4,427
Contingencies (All Ministries) and New Programs		63,041		(19,603	)		43,438
Total financing transaction disbursements		2,699,329		211,654			2,910,983		2,483,668
Summary of Appropriations
Loans, investments and other requirements		686,089		205,944			892,033		806,796
Revenue collected for, and transferred to, other entities		1,444,250		5,710			1,449,960		1,288,831
Capital expenditures		568,990					568,990		388,041
Total financing transactions by appropriation		2,699,329		211,654			2,910,983		2,483,668

PROVINCE OF BRITISH COLUMBIA	133
PUBLIC ACCOUNTS 2020/21

Consolidated Revenue Fund

Schedule of Write–offs, Extinguishments and Remissions

for the Fiscal Year Ended March 31, 2021

(Unaudited)

			In Millions
	Assets,
	Debts and		Debts and
	Obligations		Obligations		Remissions
	Written Off		Extinguished		Made
		$		$		$
Ministry
Ministry of Advanced Education and Skills Training				15
Ministry of Attorney General		3
Ministry of Children and Family Development		1
Ministry of Citizens’ Services		2
Ministry of Energy, Mines and Low Carbon Innovation						2
Ministry of Environment and Climate Change Strategy		1
Ministry of Finance		62		41
Ministry of Forests, Lands, Natural Resource Operations and Rural Development		1		3
Ministry of Health		2
Ministry of Public Safety and Solicitor General		7
Ministry of Social Development and Poverty Reduction		3		5
Total 2020/21		82		64		2
Total 2019/20		96		80		11

This statement includes amounts authorized by sections 17, 18 and 19 of the Financial Administration Act. Amounts authorized for write–off, forgiveness or remission by other statutes are not shown separately in these financial statements.

This schedule is produced as required under Section 9(2)(d)(ii),(iii) and (iv) of the Budget Transparency and Accountability Act.

PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

This page intentionally left blank

Provincial Debt

Summary

(Unaudited) 

The following unaudited Provincial Debt Summary information is intended to provide additional information to financial statement readers.

The accounting policies applied to this unaudited information are different, in some cases, from the Budget Transparency and Accountaibility Act (BTAA); which requires generally accepted accounting principles (GAAP) for senior governments in Canada, supported by regulations of Treasury Board under the BTAA, and that are followed for the audited Summary Financial Statements. The Provincial Debt Summary figures include guaranteed debt in the calculation of total debt and calculate debt, interest costs and revenue as if the modified equity enterprises were consolidated on a line-by-line basis.

 

PROVINCE OF BRITISH COLUMBIA

PUBLIC ACCOUNTS 2020/21

This page intentionally left blank

PROVINCE OF BRITISH COLUMBIA	137
PUBLIC ACCOUNTS 2020/21

Overview of Provincial Debt

(Unaudited)

The provincial government, its Crown corporations, agencies and government organizations incur debt to fund operations and finance capital projects.

Provincial debt is reported using two basic classifications: (1) taxpayer–supported debt; and (2) self–supported debt.

Taxpayer–supported Debt—includes government direct debt, which is incurred for government operating and capital purposes, the debt of Crown corporations and agencies, school districts, universities, colleges, institutes and health organizations that require operating or debt service subsidies from the provincial government and are fully consolidated in the Summary Financial Statements. The BC Transportation Financing Authority is an example of a taxpayer–supported Crown corporation.

Self–supported Debt—includes the debt of commercial Crown corporations and agencies as well as the Warehouse Borrowing Program. Commercial Crown corporations and agencies generate sufficient revenues to cover interest costs and repay principal and may pay dividends to the province. The British Columbia Hydro and Power Authority is an example of a commercial Crown corporation. The Warehouse Borrowing Program takes advantage of borrowing opportunities in advance of requirements. Eventually, this debt is allocated to the province or Crown corporations and agencies. In the interim, the funds are invested at market rates.

The Finance Statutes (Deficit Authorization and Debt Elimination) Amendment Act, 2009 requires that effective April 1, 2013, any increase in cash and cash equivalents in the Consolidated Revenue Fund must be applied to reduce or eliminate any provincial government direct operating debt. Supplementary estimates may not be presented to the Legislative Assembly if the most recent quarterly report includes a forecast that there will be provincial government direct operating debt at the end of the fiscal year to which the quarterly report applies. Under the Economic Stabilization (COVID–19) Act, 2020, this section of the Act does not apply for fiscal years 2020/21–2023/24.

The following provincial debt summary provides additional detailed information and related key indicators and benchmarks to allow a more informed assessment of the debt totals. A reconciliation is also provided to explain the differences between the Summary of Provincial Debt and the Summary Financial Statements.

The total provincial net debt as at March 31, 2021 was $87,100 million, which consists of $86,257 million in the Summary Financial Statements in addition to $1,321 million of debt included as part of equity in self–supported Crown corporations and agencies and $14 million of guaranteed debt less $492 million of sinking fund investments.

138	PROVINCE OF BRITISH COLUMBIA
	PUBLIC ACCOUNTS 2020/21

Provincial Debt

as at March 31, 2021

(Unaudited)

The accumulated provincial net debt of $87,100 million has been incurred for various purposes as shown in Chart 1 below. Over the years, the proceeds from borrowings have contributed to economic development in the province and have provided resources to deliver health, education and social programs, and transportation infrastructure.

At March 31, 2021, taxpayer–supported net debt totalled $59,750 million including debt incurred for transportation infrastructure ($18,782 million), educational facilities ($16,861 million), health facilities ($9,359 million), government operating requirements ($8,746 million), and other debt ($6,002 million). Other debt is comprised mainly of debt related to social housing, provincial government general capital expenditures, service delivery agencies and various loan guarantee programs.

At March 31, 2021, self–supported debt totalled $27,350 million including debt of commercial Crown corporations and agencies: British Columbia Hydro and Power Authority ($24,650 million), Columbia Basin Trust joint ventures ($1,349 million), commercial subsidiaries of certain post–secondary institutions ($520 million), Columbia Power Corporation ($271 million), British Columbia Lottery Corporation ($228 million), and debt of other government business enterprises ($332 million).

Chart 1 – Provincial debt as at March 31, 2021

In Millions/Percent of Total

 

PROVINCE OF BRITISH COLUMBIA	139
PUBLIC ACCOUNTS 2020/21

Change in Provincial Debt¹

(Unaudited)

Provincial debt increased by $14,939 million in 2020/21 when compared to the prior year. This includes an increase in taxpayer–supported debt of $13,521 million and an increase in self–supported debt of $1,418 million. Warehouse Program debt was nil at fiscal year–end. Chart 2 below shows the change in provincial debt for the year ended March 31, 2021.

Taxpayer–supported Debt—Increased by $13,521 million due to new financing of $8,746 million to fund government operating requirements, $1,416 million in the education sector, $1,123 million in the transportation sector, $852 million in the health sector, $805 million for social housing, $569 million for provincial government general capital, and $10 million in other debt.

Self–supported Debt—Increased by $1,418 million due to new capital financing requirements of $1,412 million for British Columbia Hydro and Power Authority, $16 million for the commercial subsidiaries of certain post–secondary institutions, and $38 million for other commercial Crown corporations and agencies. These increases were partially offset by decreased capital financing requirements of $38 million for Columbia Basin Trust joint ventures, $5 million for British Columbia Lottery Corporation, and $5 million for Columbia Power Corporation.

Chart 2 – Change in provincial debt for the year ended March 31, 2021

 

¹Includes gross new borrowings plus changes in sinking fund balances less debt maturities.

140	PROVINCE OF BRITISH COLUMBIA
	PUBLIC ACCOUNTS 2020/21

Reconciliation of Summary Financial Statements’ Deficit (Surplus)

to Change in Taxpayer–supported Debt and Total Debt

for the Fiscal Year Ended March 31, 2021

(Unaudited)

	In Millions
	2021			2020
	$			$
Deficit for the year		5,468			322
Taxpayer–supported debt increased (decreased) by:
Non–cash expenses included in deficit		(2,635	)		(2,683	)
Accounts receivable, accounts payable and other working capital net changes		1,616			(376	)
Self–supported Crown corporation and agency earnings in excess of contributions to the Consolidated Revenue Fund		2,200			780
Tangible capital asset net acquisitions		5,305			4,719
Net increases in loans, advances and investments		1,567			786
Net increase in taxpayer-supported debt		13,521			3,548
Taxpayer–supported debt—beginning of year		46,229			42,681
Taxpayer–supported debt—end of year		59,750			46,229
Self–supported debt		27,350			25,932
Total debt1		87,100			72,161

Reconciliation of Total Debt to Summary Financial Statements’ Debt

as at March 31, 2021

(Unaudited)

	In Millions
	2021			2020
	$			$
Total debt		87,100			72,161
Debt included as part of equity in self-supported Crown corporations and agencies		(1,321	)		(1,322	)
Contingent liabilities for debt of individuals and organizations that have been guaranteed by the province		(14	)		(15	)
Sinking fund investments		492			692
Summary Financial Statements’ debt		86,257			71,516
Comprised of:
Taxpayer–supported debt		59,982			46,669
Self–supported debt		26,275			24,847
Summary Financial Statements’ debt		86,257			71,516

¹See Summary of Provincial Debt, page 147.

PROVINCE OF BRITISH COLUMBIA	141
PUBLIC ACCOUNTS 2020/21

Change in Provincial Debt,

Comparison to Budget

(Unaudited)

Provincial debt increased by $14,939 million compared to a budgeted increase of $4,231 million resulting in a $10,708 million increase from budget net of the $300 million forecast allowance. Chart 3 below shows the difference between the actual change in provincial debt and the budgeted change by major category.

Taxpayer–supported debt increased by $13,521 million compared to a budgeted increase of $2,973 million. The $10,548 million increase from budget is due to borrowing to fund government operating requirements ($8,746 million) and higher than forecasted borrowing in the education sector ($1,726 million) and the health sector ($609 million). These increases were partially offset by decreases in the Transportation sector ($287 million) and the Other sector ($246 million). The increase in capital borrowing for government operating requirements, the education sector, and the health sector addressed enhanced provincial liquidity needs during the pandemic and the borrowing requirements for capital projects in the new fiscal year.

Self–supported debt increased by $1,418 million compared to a budgeted increase of $958 million. The $460 million increase from budget is due to higher than forecasted borrowing for British Columbia Hydro and Power Authority ($293 million), commercial subsidiaries of certain post–secondary institutions ($132 million), and British Columbia Lottery Corporation ($105 million). These increases were partially offset by decreases in borrowing for British Columbia Liquor Distribution Branch ($51 million), and Columbia Basin Trust joint ventures ($19 million).

Chart 3 – Change in provincial debt¹, comparison to budget for the year ended March 31, 2021

 

¹The change in forecast allowance is not included in this chart.

142	PROVINCE OF BRITISH COLUMBIA
	PUBLIC ACCOUNTS 2020/21

Interprovincial Comparison of Taxpayer–supported Debt

as a Percentage of Gross Domestic Product

(Unaudited)

Chart 4 below shows the ratio of each province’s taxpayer–supported debt as a percentage of their gross domestic product (GDP). The ratio of a province’s taxpayer–supported debt relative to its GDP highlights the ability of a province to service its debt load. This ratio is often used by investors and credit rating agencies when assessing a province’s investment quality. According to the most recent data published by Moody’s Investors Service Inc. (Moody’s), British Columbia’s taxpayer–supported debt ratio is one of the lowest in Canada and this translates into a strong credit rating and relatively low debt servicing costs.

Chart 4 – Interprovincial comparison of taxpayer–supported debt as a percentage of GDP

 

Source: Moody’s Investors Service Inc.

British Columbia’s result as per Ministry of Finance’s actuals; Moody’s result for British Columbia as at March 31, 2020 was 14.6%.

PROVINCE OF BRITISH COLUMBIA 143

PUBLIC ACCOUNTS 2020/21

Interprovincial Comparison of Taxpayer–supported Debt

Service Costs as a Percentage of Revenue

(Unaudited)

Chart 5 shows the ratio (interest bite) of each province’s taxpayer–supported debt servicing costs as a percentage of revenue. The interest bite indicates how much of each dollar of provincial revenue is used to pay for taxpayer–supported debt service costs. According to the most recent data published by Moody’s, British Columbia has one of the lowest taxpayer–supported debt service costs as a percentage of revenue of all provinces.

Chart 5 – Interprovincial comparison of taxpayer–supported debt service costs as a percentage of revenue

Percent of revenue at March 31

 

Source: Moody’s Investors Service Inc.

British Columbia’s result as per Ministry of Finance’s actuals; Moody’s result for British Columbia as at March 31, 2020 was 3.1%.

Moody’s definition of taxpayer–supported debt is modestly different from the definition used by the Ministry of Finance. The financial community has not agreed upon a definition for taxpayer–supported debt. The definition used by Moody’s is the closest to that employed by the ministry, however there are small differences. The value of presenting Moody’s debt indicators is that it provides an interprovincial comparison from a third party source, which is helpful for readers to understand the province’s relative performance and ranking.

More comprehensive information on the debt of the province and its Crown corporations and agencies is provided on the Debt Management Branch website. This detailed information can assist readers in assessing the province’s debt position. The website is available online at: http://gov.bc.ca/provincialdebt.

 

INDEPENDENT AUDITOR’S REPORT

To the Minister of Finance, Province of British Columbia

Qualified Opinion

I have audited the accompanying debt-related statements of the Government of the Province of British Columbia (Government), which comprise the summary of provincial debt as at March 31, 2021, the key indicators of provincial debt and the summary of performance measures for the year then ended, and a summary of significant accounting policies and other explanatory information.

In my opinion, except for the effects of the matters described in the Basis for Qualified Opinion section of my report, the summary of provincial debt as at March 31, 2021, the key indicators of provincial debt and the summary of performance measures for the year then ended are prepared, in all material respects, in accordance with the basis of accounting as described in the notes to the debt-related statements.

Basis for Qualified Opinion

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my qualified opinion. My qualification of the debt-related statements is as follows:

Classification of the fiscal 2017 debt of the Transportation Investment Corporation

As at March 31, 2017 Government determined the Transportation Investment Corporation to be a government business enterprise, and therefore classified the debt of the Transportation Investment Corporation as self-supported debt. Under Canadian Public Sector Accounting Standards, to be classified as a government business enterprise, an organization must be able to maintain its operations and meet its liabilities from revenues received from outside the government reporting entity. Based on the conditions that existed as of March 31, 2017, in my opinion, the Transportation Investment Corporation did not meet this criteria and therefore was inappropriately classified as a government business enterprise for that year. As a result, for the year ending March 31, 2017 the material changes to the debt-related statements would be as follows:

Taxpayer-supported debt	$	3,430 million increase
Self-supported debt	$	3,430 million decrease
Taxpayer-supported debt to revenue (per cent)		6.9 increase
Taxpayer-supported debt per capita ($)		722 increase
Taxpayer-supported debt to GDP (per cent)		1.3 increase

This qualification of my opinion relates only to the fiscal year ending March 31, 2017.

MINISTER OF FINANCE

Independent Auditor’s Report

I conducted my audit in accordance with Canadian generally accepted auditing standards. My responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Debt-related Statements section of my report. I am independent of the Government in accordance with the ethical requirements that are relevant to my audit of the debt-related statements in Canada, and I have fulfilled my other ethical responsibilities in accordance with these requirements.

Emphasis of Matter - Basis of Accounting

I draw attention to the notes to the debt-related statements, which describe the basis of accounting. Through the debt-related statements the Government reports to the Legislative Assembly on its debt management by presenting five years of information on provincial debt and debt indicators, and compares its actual results of performance measures to its target measures for the fiscal year ended March 31, 2021. As a result, the debt-related statements may not be suitable for another purpose. My opinion is not modified in respect of this matter.

Other Accompanying Information

Government is responsible for the information they include in the annual Public Accounts report.

My opinion on the debt-related statements does not cover other information accompanying the debt-related statements and, except for my independent auditor’s opinion on the summary financial statements, I do not express any form of assurance conclusion thereon.

In connection with my audit of the debt-related statements, my responsibility is to read other information and, in doing so, consider whether the other information is materially inconsistent with the debt-related statements or my knowledge obtained during the audit or otherwise appears to be materially misstated.

If, based on the work I have performed on the other information, I conclude that there is a material misstatement therein, I am required to report that fact in this auditor’s report. As described in the Basis for Qualified Opinion section above, I believe there are material misstatements in Government’s accounting for the classification of the fiscal 2017 debt of the Transportation Investment Corporation. I have concluded that the other information is materially misstated for the same reason with respect to the amounts or other items in the Public Accounts report affected by these departures from the stated basis of accounting.

Government’s Responsibility for the Debt-related Statements

Government is responsible for determining the appropriateness of the stated basis of accounting as described in the notes to the debt-related statements and for the preparation of the debt-related statements in accordance with the stated basis of accounting. Government is also responsible for such internal control as management determines is necessary to enable the preparation of the debt-related statements that are free from material misstatement, whether due to fraud or error.

 

MINISTER OF FINANCE

Independent Auditor’s Report

Auditor’s Responsibilities for the Audit of the Debt-related Statements

My objectives are to obtain reasonable assurance about whether the debt-related statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the debt-related statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, I exercise professional judgment and maintain professional skepticism throughout the audit. I also:

· Identify and assess the risks of material misstatement of the debt-related statements, whether due to fraud or error; design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

· Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control.

· Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates, if any, and related disclosures made by management.

· Evaluate the overall presentation, structure and content of the debt-related statements, and whether it represents the underlying transactions and events in a manner that complies with the basis of accounting described in the notes to the debt-related statements.

I communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.

	/s/ Michael A. Pickup
Victoria, British Columbia, Canada	Michael A. Pickup, FCPA, FCA
July 16, 2021	Auditor General

 

PROVINCE OF BRITISH COLUMBIA 147

PUBLIC ACCOUNTS 2020/21

Summary of Provincial Debt¹

as at March 31

	In Millions
	2021		2020		2019		2018		2017
	$		$		$		$		$
Taxpayer–supported Debt
Provincial government direct operating
Provincial government operating		8,746								1,948
Provincial government general capital								1,156		2,696
		8,746		0		0		1,156		4,644
Education2
Schools		10,553		9,775		8,904		8,908		8,473
Post–secondary institutions		6,308		5,670		5,370		5,328		4,984
		16,861		15,445		14,274		14,236		13,457
Health facilities2		9,359		8,507		7,968		7,903		7,552
Highways, ferries and public transit
BC Transportation Financing Authority		13,321		12,193		11,293		10,388		9,974
British Columbia Transit		60		65		73		84		94
Port Mann Bridge3		3,510		3,510		3,510		3,508
Public transit2		870		870		870		1,000		1,000
SkyTrain extension2		1,021		1,021		1,021		1,174		1,174
		18,782		17,659		16,767		16,154		12,242
Other
B.C. Pavilion Corporation		375		378		371		374		376
Provincial government general capital		3,702		3,133		2,363		2,718		2,288
Social Housing4		1,832		1,027		844		878		695
Other5		93		80		94		188		245
		6,002		4,618		3,672		4,158		3,604
Total taxpayer–supported debt		59,750		46,229		42,681		43,607		41,499

148	PROVINCE OF BRITISH COLUMBIA
	PUBLIC ACCOUNTS 2020/21

Summary of Provincial Debt¹—Continued

as at March 31

	In Millions
	2021		2020		2019		2018		2017
	$		$		$		$		$
Self–supported Debt
Commercial Crown corporations and agencies
British Columbia Hydro and Power Authority		24,650		23,238		22,064		19,990		19,685
British Columbia Lottery Corporation		228		233		100		155		145
Columbia Power Corporation		271		276		282		286		291
Columbia Basin Trust joint ventures6		1,349		1,387		418		433		448
Post–secondary institutions’ subsidiaries7		520		504		387		418		340
Transportation Investment Corporation3										3,398
Other8		332		294		30		30		31
Total self–supported debt		27,350		25,932		23,281		21,312		24,338
Total provincial debt		87,100		72,161		65,962		64,919		65,837

¹Debt is after deductions of sinking funds, unamortized discounts and unrealized foreign exchange gains/(losses), and excludes accrued interest. Government direct and fiscal agency debt accrued interest is reported in the government’s accounts as an accounts payable.

²Represents government direct debt incurred for capital financing of education and health facilities and public transit infrastructure.

³Beginning in 2017/18, debt related to the Port Mann Bridge has been reclassified as taxpayer–supported due to the elimination of tolls effective September 1, 2017.

⁴Includes the debt of the British Columbia Housing Management Commission and the Provincial Rental Housing Corporation.

⁵Includes debt of other taxpayer–supported Crown corporations and agencies and the fiscal agency loans to local governments. Also includes reconstruction loan program guarantees, student loan guarantees, loan guarantees to agricultural producers, guarantees under economic development and home mortgage assistance programs.

⁶Debt related to Columbia Basin Trust joint ventures with Columbia Power Corporation (Brilliant Power Corporation, Brilliant Expansion Power Corporation, Arrow Lakes Power Corporation, and Waneta Expansion Power Corporation).

⁷Includes debt of Heritage Realty Properties Ltd., SFU Community Trust, and UBC Property Investments Ltd, and Vancouver Island Technology Park.

⁸Includes Columbia Basin Trust’s share of real estate investment joint ventures’ debt, British Columbia Liquor Distribution Branch and Insurance Corporation of British Columbia.

Summary of Provincial Debt

The debt–related statements are prepared using financial information that supports the government’s Summary Financial Statements, which are prepared in accordance with the Budget Transparency and Accountability Act (BTAA), which requires generally accepted accounting principles (GAAP) for senior governments in Canada, supported by regulations of Treasury Board. However, in the debt–related statements, there are some differences in the methods of compilation and presentation compared to generally accepted accounting principles. In the debt–related statements, debt is calculated net of sinking fund assets, includes debt directly incurred by modified equity enterprises, and other commercial subsidiaries of taxpayer–supported entities, and includes debt incurred by others outside the government reporting entity where there is provincial guarantee as to the payment of principal and interest. Also, total provincial revenue and interest costs include the gross revenue and interest costs of modified equity enterprises, and total provincial interest costs are net of sinking fund earnings.

Provincial government general capital

In February 2009, government tabled the Finance Statutes (Deficit Authorization and Debt Elimination) Amendment Act, 2009, which prohibited spending on supplementary estimates until operating debt was eliminated. Historically, government direct operating debt included debt attributed to financing ministry capital expenditures, in addition to borrowing for operating deficits and working capital needs. In accordance with the amending legislation, beginning in 2009/10, debt attributed to amounts spent on ministry capital are reported as “Provincial government general capital” and reported separately from direct operating debt for deficit financing. Amounts attributed to ministry capital spending prior to 2008/09 are disclosed as a component of direct operating debt for compliance with the amended legislation. These segregated debt disclosures are consistent with government’s policy of paying down operating debt before other types of debt.

PROVINCE OF BRITISH COLUMBIA	149
PUBLIC ACCOUNTS 2020/21

Key Indicators of Provincial Debt¹

for the Fiscal Years Ended March 31

	2021				2020		2019		2018		2017
	Budget
	Estimate		Actual		Actual		Actual		Actual		Actual
Debt to Revenue (percent)
Total provincial		98.8		115.1		95.9		89.5		94.7		99.3
Taxpayer–supported		84.1		101.2		80.6		75.0		82.5		81.8
Debt per Capita ($)2
Total provincial		14,850		16,919		14,230		13,214		13,477		13,855
Taxpayer–supported		9,564		11,606		9,116		8,550		9,053		8,733
Debt to GDP (percent)3
Total provincial		24.0		29.5		23.6		22.3		23.2		25.1
Taxpayer–supported		15.5		20.2		15.1		14.5		15.6		15.9
Interest Bite (cents per dollar of revenue)4
Total provincial		3.7		3.7		3.8		3.8		4.0		3.8
Taxpayer–supported		3.1		3.1		3.1		3.2		3.3		3.2
Interest Costs ($ millions)
Total provincial		2,828		2,817		2,872		2,786		2,759		2,521
Taxpayer–supported		1,819		1,832		1,807		1,793		1,725		1,644
Interest Rate (percent)5
Taxpayer–supported		3.9		3.5		4.1		4.2		4.1		3.9
Revenue Factor for Key Indicators ($ million)
Total provincial6		77,319		75,691		75,283		73,734		68,551		66,334
Taxpayer–supported7		58,515		59,033		57,386		56,881		52,866		50,726

150	PROVINCE OF BRITISH COLUMBIA
	PUBLIC ACCOUNTS 2020/21

Key Indicators of Provincial Debt¹

for the Fiscal Years Ended March 31—Continued

	2021				2020		2019		2018		2017
	Budget
	Estimate		Actual		Actual		Actual		Actual		Actual
Total Debt ($ millions)
Total provincial		76,392		87,100		72,161		65,962		64,919		65,837
Taxpayer–supported8		49,202		59,750		46,229		42,681		43,607		41,499
Provincial GDP ($ millions)9		318,068		295,282		306,272		295,316		279,370		261,808
Population (thousands at July 1)10		5,144		5,148		5,071		4,992		4,817		4,752

¹Figures for prior years have been restated to conform with the presentation used for 2020/21 and to include the effects of changes in underlying data.

²The ratio of debt to population (e.g., debt at March 31, 2021 divided by population at July 1, 2020).

³The ratio of debt outstanding at fiscal year end to provincial nominal gross domestic product (GDP) for the calendar year ending in the fiscal year (e.g., debt at March 31, 2021 divided by 2020 GDP).

⁴The ratio of interest costs (less sinking fund interest) to revenue. Figures include capitalized interest expense in order to provide a more comparable measure to outstanding debt.

⁵Weighted average of all outstanding debt issues.

⁶Includes revenue less earnings related to enterprises (sinking fund earnings, loan interest and net earnings), plus revenue of all enterprises.

⁷Excludes revenue of government enterprises, but includes dividends from enterprises paid to the Consolidated Revenue Fund.

⁸Excludes debt of commercial Crown corporations and agencies, and funds held under the province’s warehouse borrowing program.

⁹Nominal GDP for the calendar year ending in the fiscal year (e.g. GDP for 2020 is used for the fiscal year ended March 31, 2021). As nominal GDP for the calendar year ending 2020 is not available, the 2020 GDP projected in the April 2021 Budget and Fiscal Plan 2021/22 – 2023/24 has been used for the fiscal year ended March 31, 2021 for demonstration purposes. Preliminary GDP figures are presented as published for the year noted.

¹⁰Population at July 1st within the fiscal year (e.g. population at July 1, 2020 is used for the fiscal year ended March 31, 2021). Preliminary population figures are presented as published for the year noted per the April 2021 Budget and Fiscal Plan 2021/22 – 2023/24.

Summary of Performance Measures

for the Fiscal Year Ended March 31, 2021

	2021			2021			2020
	Target2			Actual			Actual
Taxpayer–supported debt to GDP ratio1		15.5	%		20.2	%		15.1	%
Taxpayer–supported debt service costs as a percentage of revenue		3.1	%		3.1	%		3.1	%

¹These performance measures, among others, are key indicators on which credit rating agencies rely to determine the province’s credit rating.

²The target amounts are from page 150 of the Budget and Fiscal Plan 2020/21–2022/23.

PROVINCE OF BRITISH COLUMBIA	151
PUBLIC ACCOUNTS 2020/21

Definitions

(Unaudited)

Consolidated Revenue Fund—includes the taxpayer–supported activities of the General Fund and special funds of the government through which the government delivers central government programs. It does not include the activities of government operated through Crown corporations and agencies or the school districts, universities, colleges, institutes and health organizations (SUCH) sector.

Consolidation—the methods used to combine the results of Crown corporations and agencies and the SUCH sector entities with the Consolidated Revenue Fund. The two methods used are:

(i) Full or Proportional Consolidation—the accounts of the Crown corporation, agency or SUCH sector entity are adjusted to a basis consistent with the accounting policies of the government. The operating result and financial position of the Crown and SUCH entities are combined with those of the Consolidated Revenue Fund on a line–by–line basis. Inter-entity accounts and transactions are eliminated upon consolidation. Proportional consolidation differs from full consolidation in that only the government’s portion of operating and financial results of a joint venture is combined with those of the Consolidated Revenue Fund on a line–by–line basis.

(ii) Modified Equity Consolidation—the original investment of the government in the Crown corporation, agency or SUCH sector entity is initially recorded at cost and adjusted annually to include the net earnings/losses and other net equity changes of the entity. There is no adjustment to conform to government accounting policies. Since the government ensures the ongoing activities of self–supported Crown corporations and agencies, full account is taken of losses in these entities, even when cumulative losses exceed the original investment. Accounts and transactions between self–supported entities are not eliminated; however, profit elements included in such transactions, including certain increases in contributed surplus, are eliminated.

Debt has a variety of meanings:

(i) Gross debt—the par value of the debt, unamortized discount and premiums, and unrealized foreign exchange gains or losses.

(ii) Net debt—gross debt less sinking fund investments.

(iii) Provincial debt—net debt plus guaranteed debt and debt directly incurred by modified equity entities.

Deficit—the meaning is dependent upon the statement to which it applies:

(i) Consolidated Statement of Financial Position: Accumulated Deficit—the amount by which the total liabilities of the government exceeds its total assets.

(ii) Consolidated Statement of Operations: Annual Deficit—the amount by which the total annual expenses for the operating year exceed total annual revenues (see “Surplus” definition).

Entitlement—a government transfer that must be made if the recipient meets specified eligibility criteria. Entitlements are non-discretionary in the sense that both eligibility criteria and the amount of the payment are prescribed in a statute or regulation.

Financial assets—assets on hand at the end of the accounting period, including cash and assets that are readily convertible into cash and are not intended for consumption in the normal course of activities. These assets could be liquidated to discharge existing liabilities or finance future operations. Financial assets could include sinking fund investments held to pay debt at maturity.

Government business enterprise—a government organization that has all the following characteristics:

(i) is a separate legal entity with the power to contract in its own name and that can sue or be sued;

(ii) has been delegated the financial and operational authority to carry on a business;

(iii) sells goods and/or services to individuals and organizations outside the government reporting entity as its principal activity; and

(iv) can, in the normal course of its operation, maintain its operations and meet its liabilities from revenue received from sources outside the government reporting entity.

152	PROVINCE OF BRITISH COLUMBIA
	PUBLIC ACCOUNTS 2020/21

Definitions—Continued

(Unaudited)

Government partnership—a contractual arrangement between the government and a party or parties outside the government reporting entity that has all the following characteristics:

(i) the partners cooperate toward achieving significant, clearly defined common goals;

(ii) the partners make a financial investment in the government partnership;

(iii) the partners share control of decisions related to the financial and operating policies of the government partnership on an ongoing basis; and

(iv) the partners share, on an equitable basis, significant risks and benefits associated with the operation.

Government transfers—transfer of money from government to an individual, organization or another government from which the government making the transfer does not:

(i) receive any goods or services directly in return;

(ii) expect to be repaid in the future; nor

(iii) expect a financial return.

Grants—a government transfer made at the sole discretion of the government. The government has the discretion to decide whether or not to make the grant, any conditions to be complied with, the amount of the grant and the recipient of the grant.

Net liabilities—the amount by which the total liabilities of the government exceed its total financial assets. The separate calculation of this number on the Consolidated Statement of Financial Position is unique to financial statements for Canadian senior governments. This calculation excludes non-financial assets such as buildings and prepaid expenses.

Other comprehensive income (OCI)—is made up of certain unrealized gains and losses of self–supported Crown corporations that are not reported in their statement of operations, but are reported in their statement of financial position. These unrealized gains and losses will be recognized in the statement of operations when they become realized gains and losses.

Provincial government direct debt—combines the government direct operating debt and the debt incurred to finance education, health facilities and public transit. This combined portfolio represents the debt for which the government has direct responsibility for the associated debt service costs.

Self–supported Crown corporations and agencies—all Crown corporations and agencies that are accountable for the administration of their financial affairs and resources either to a minister of the government or directly to the legislature and are owned or controlled by the government. In addition, they must also carry on a business that sells goods and/or services to persons outside the government reporting entity as their principal activity and maintain operations and meet liabilities from revenue received outside the government reporting entity in the normal course of operations. This also includes the government’s interest in government business enterprises.

Sinking funds—a pool of cash and investments earmarked to provide resources for the redemption of debt.

Summary accounts—the financial position and operating result of the government reporting entity including the Consolidated Revenue Fund, Crown corporations, agencies and SUCH sector entities; the amounts represented by the Summary Financial Statements of the government.

Surplus—meaning is dependent upon the statement to which it applies:

(i) Consolidated Statement of Financial Position: the accumulated surplus is the amount by which the total assets of the government exceeds its total liabilities.

(ii) Consolidated Statement of Operations: the annual surplus is the amount by which the total annual revenues for the operating year exceed total annual expenses (see “Deficit” definition).

PROVINCE OF BRITISH COLUMBIA	153
PUBLIC ACCOUNTS 2020/21

Definitions—Continued

(Unaudited)

Taxpayer–supported Crown corporations and agencies and SUCH sector entities—all Crown corporations and agencies and entities outside the Consolidated Revenue Fund that meet the criteria of control (by the province) as established by generally accepted accounting principles. In addition, they must not meet the criteria for being self–supported. This also includes the government’s interest in government partnerships that are not government business enterprises.

Transfers under agreements (including shared cost)—a government transfer that is a reimbursement of eligible expenditures pursuant to an agreement between the government and the recipient. The recipient usually spends the money first; however, the government has some input into how the money is spent.

154	PROVINCE OF BRITISH COLUMBIA
	PUBLIC ACCOUNTS 2020/21

Acronyms

(Unaudited)

APAC	Accounting Policy Advisory Committee
BC Hydro	British Columbia Hydro and Power Authority
BCHMC	British Columbia Housing Management Commission
BTAA	Budget Transparency and Accountability Act
CPA	Chartered Professional Accountant
CRF	Consolidated Revenue Fund
GAAP	Generally accepted accounting principles (for senior governments as recommended by the Canadian Public Sector Accounting Board)
GDP	Gross domestic product
Moody’s	Moody’s Investors Service
PSAS	Public Sector Accounting Standards
SCBCTA	South Coast British Columbia Transportation Authority
SFU	Simon Fraser University
SUCH	School districts, universities, colleges, institutes and health organizations
UBC	The University of British Columbia