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

Exhibit 99.12

First quarterly report september 2023

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First quarterly report fiscal plan update 2023/24 – 2025/26 2023/24 economic outlook and financial forecast & three month results april - june 2023

British Columbia Cataloguing in Publication Data

British Columbia. Ministry of Finance.

Quarterly report on the economy, fiscal situation and Crown corporations. — ongoing–

Quarterly.

Title on cover: Quarterly report.

Continues: British Columbia. Ministry of Finance.

Quarterly financial report. ISSN 0833-1375.

ISSN 1192-2176 — Quarterly Report on the economy, fiscal situation and Crown corporations.

1. Finance, Public — British Columbia — Accounting — Periodicals. 2. British Columbia — Economic conditions — 1945–              — Periodicals.*

3. Corporations, Government — British Columbia — Accounting — Periodicals. I. Title.

HJ13.B77               354.711’007231’05

2023/24 First Quarterly Report
September 15, 2023 | TABLE OF CONTENTS

Updated Fiscal Plan 2023/24 to 2025/26
Tables:
Updated Fiscal Plan 2023/24 to 2025/26		1
Part One — Updated 2023/24 Financial Forecast
Introduction		5
Revenue		7
Expense		10
Consolidated Revenue Fund (CRF) Spending		10
Service Delivery Agency Spending		11
Full-Time Equivalents for the BC Public Service		12
Provincial Capital Spending		12
Projects Over $50 Million		13
Provincial Debt		16
Risks to the Fiscal Forecast		17
Supplementary Schedules		19
Tables:
1.1	Forecast Update	5
1.2	Financial Forecast Changes	6
1.3	Comparison of Major Factors Underlying Revenue	8
1.4	Pandemic Recovery Contingencies	11
1.5	Capital Spending Update	12
1.6	Provincial Debt Update	16
1.7	Operating Statement	19
1.8	Revenue by Source	20
1.9	Expense by Ministry, Program and Agency	21
1.10	Expense by Function	22
1.11	Capital Spending	23
1.12	Capital Expenditure Projects Greater Than $50 million	24
1.13	Provincial Debt	28
1.14	Statement of Financial Position	29

First Quarterly Report 2023/24 |  i

Table of Contents

Part Two — Economic Review and Outlook

Summary		31
British Columbia Economic Activity and Outlook		32
Labour Market		33
Consumer Spending and Inflation		34
Housing		36
Business and Government		38
External Trade and Commodity Markets		39
Demographics		41
Risks to the Economic Outlook		41
External Outlook		42
United States		42
Canada		45
Asia		47
Europe		48
Financial Markets		48
Interest Rates		48
Exchange Rates		50
Tables:
2.1	British Columbia Economic Indicators	32
2.2	U.S. Real GDP Forecast: Consensus vs B.C. Ministry of Finance	44
2.3	Canadian Real GDP Forecast: Consensus vs B.C. Ministry of Finance	46
2.4	Private Sector Canadian Interest Rate Forecasts	50
2.5	Private Sector Exchange Rate Forecasts	51
2.6.1	Gross Domestic Product (GDP): British Columbia	52
2.6.2	Selected Nominal Income and Other Indicators: British Columbia	53
2.6.3	Labour Market Indicators: British Columbia	53
2.6.4	Major Economic Assumptions	54

ii  | First Quarterly Report 2023/24

Table of Contents

Appendix — Fiscal Plan Update

Tables:

A1	Material Assumptions – Revenue	55
A2	Natural Gas Price Forecasts – 2023/24 to 2025/26	60
A3	Material Assumptions – Expense	62
A4	Operating Statement – 2016/17 to 2025/26	65
A5	Revenue by Source – 2016/17 to 2025/26	66
A6	Revenue by Source Supplementary Information – 2016/17 to 2025/26	67
A7	Expense by Function – 2016/17 to 2025/26	68
A8	Expense by Function Supplementary Information – 2016/17 to 2025/26	69
A9	Full-Time Equivalents (FTEs) – 2016/17 to 2025/26	70
A10	Capital Spending – 2016/17 to 2025/26	71
A11	Statement of Financial Position – 2016/17 to 2025/26	72
A12	Changes in Financial Position – 2016/17 to 2025/26	73
A13	Provincial Debt – 2016/17 to 2025/26	74
A14	Provincial Debt Supplementary Information – 2016/17 to 2025/26	75
A15	Key Provincial Debt Indicators – 2016/17 to 2025/26	76

First Quarterly Report 2023/24 |  iii

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UPDATED FISCAL PLAN – 2023/24 to 2025/26

($ millions)	2023/24		2024/25		2025/26
Deficit - Budget 2023	(4,216	)	(3,754	)	(3,043	)
Fiscal Plan Updates:
Personal income tax	(522	)	(556	)	(579	)
Corporate income tax	99		1,165		(561	)
Sales tax	175		195		191
Carbon tax	(111	)	(113	)	(114	)
Property transfer tax	151		104		94
Other taxation revenue	77		57		78
Natural gas royalties	(1,179	)	(469	)	(336	)
Other natural resources revenue	(201	)	(89	)	25
Contributions from the federal government - DFAA	(420	)	459		181
Contributions from the federal government - other	319		13		45
Other revenue	150		246		287
Wildfires	(762	)	-		-
Other spending changes	(234	)	(405	)	(405	)
Deficit - First Quarterly Report	(6,674	)	(3,147	)	(4,137	)
Prudence included in fiscal plan:
Contingencies - General, CleanBC and Climate & Emergency Response	(4,500	)	(4,800	)	(4,700	)
Pandemic Recovery Contingencies	(1,000	)	-		-
Forecast allowance	(700	)	(500	)	(500	)
Capital Spending:
Taxpayer-supported capital spending	12,180		12,639		13,076
Self-supported capital spending	4,073		4,117		2,853
	16,253		16,756		15,929
Provincial Debt:
Taxpayer-supported debt	70,772		84,737		98,130
Self-supported debt	31,562		34,092		34,713
Total debt (including forecast allowance)	103,034		119,329		133,343
Taxpayer-supported debt-to-GDP ratio	17.6	%	20.3	%	22.6	%
Taxpayer-supported debt-to-revenue ratio	95.5	%	108.7	%	124.6	%

Financial Outlook

The First Quarterly Report shows an increased deficit forecast for 2023/24 mainly due to lower natural gas royalties, lower personal income tax, and higher spending for wildfire response. The deficit projection is lower in 2024/25 but higher in 2025/26 reflecting updated revenue forecasts for corporate income tax and other streams, as outlined in this report.

Compared to Budget 2023, revenue forecasts are lower by $1.5 billion in 2023/24, higher by $1.0 billion in 2024/25 and lower by $689 million in 2025/26. Expense projections are higher by $996 million in 2023/24 and by $405 million in 2024/25 and 2025/26. These changes result in a forecast deficit of $6.7 billion in 2023/24, $3.1 billion in 2024/25, and $4.1 billion in 2025/26, as shown in the table above.

Personal income taxation revenue is lower by $1.7 billion over the fiscal plan mainly reflecting preliminary 2022 income tax returns. Corporate income tax projections have shifted based on the federal government’s updated forecast of national corporate taxable income, with an increase in 2024/25 and reduction in 2025/26. This is in contrast to last year’s first quarterly update, when the income tax data showed significant improvements.

First Quarterly Report 2023/24 |  1

Updated Fiscal Plan – 2023/24 to 2025/26

Over the three years, natural resource revenue is forecast to be $2.2 billion lower than at Budget 2023, mostly from natural gas royalties as a result of lower prices. The updated natural gas price forecast for 2023/24 is $1.29 ($Cdn/gigajoule, plant inlet), down from the budget outlook ($3.04), a 58 per cent reduction. The Ministry of Finance incorporates a prudent forecast for natural gas revenue, using a price forecast that is within the 20^th percentile of the private sector forecasts.

Contributions from the federal government are higher mainly as a result of a one-time top-up payment of $273 million under the Canada Health Transfer. Also, funding under the Disaster Financial Assistance Arrangements is re-profiled to reflect updated spending timelines.

Compared to budget, expenses in 2023/24 are expected to be higher mainly as a result of wildfire response costs, as the province faces record-breaking wildfires in many areas. The updated expense outlook also includes higher spending by government organizations, higher interest expense and lower uptake of refundable tax credits.

Economic Outlook

B.C.’s economy continues to be resilient, despite the higher-than-expected interest rate environment. Employment has posted modest gains, and consumer spending has been supported by strong population growth. Total inflation has eased from 8.1 per cent in May 2022 to 3.0 per cent in July 2023. Housing markets are adjusting to higher interest rates, with increased home sales activity in recent months, and robust new home construction. However, merchandise exports have declined in the first half of 2023, reflecting weaker demand from B.C.’s trading partners and lower prices for key commodities compared to the first half of 2022.

The First Quarterly Report forecast for B.C. real GDP growth in 2023 has been revised up to 1.2 per cent from the Budget 2023 forecast of 0.4 per cent, and the forecast for 2024 has been revised down to 0.8 per cent from 1.5 per cent. This revision largely reflects weaker exports and the impact of higher interest rates over a longer than expected period, with increased borrowing costs weighing on consumer spending and business investment.

British Columbia’s Real GDP Outlook

 

The economic outlook over the 2025 to 2027 period is relatively unchanged from the Budget 2023 forecast. Over this period, inflation is expected to normalize and interest rates are expected to stabilize.

Capital Investments

Taxpayer-supported capital spending on hospitals, education facilities, transportation infrastructure, housing and other projects is financed through a combination of provincial borrowing, funding provided by third parties, and from internal cash flows. Taxpayer-supported capital spending is forecast to total $37.9 billion over the fiscal plan period, which is $350 million higher than the Budget 2023 forecast mainly due to changes in the timing of capital projects and increased spending in health and social housing sectors.

Over the three years, self-supported infrastructure spending by commercial Crown corporations totals $11.0 billion.

Debt Affordability

Government’s key debt affordability metric, the taxpayer-supported debt-to-GDP ratio, is forecast to improve from Budget 2023 due to lower debt balances from fiscal 2022/23 (see chart below). Taxpayer-supported debt is projected at $98.1 billion at the end of the fiscal plan period, which is $1.3 billion lower than the budget forecast.

B.C. continues to have low debt-affordability metrics relative to other Canadian provinces.

2   | First Quarterly Report 2023/24

Updated Fiscal Plan – 2023/24 to 2025/26

Taxpayer-Supported Debt-to-GDP

Including the self-supported debt of commercial Crown corporations and a $500 million forecast allowance, the total provincial debt is projected at $133.3 billion by the end of 2025/26.

Risks to the Fiscal Plan

The main risks to the government’s fiscal plan include:

· risks to the B.C. economic outlook, largely due to uncertainty surrounding global economic activity, as persistent price pressures may lead to higher than anticipated interest rates for longer;

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

· increased spending which may include wildfire and floods response and increased demand and costs for government services such as health care and social services; and

· potential changes to federal government 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.

Government incorporates several levels of prudence in its projections to help mitigate the risks to the fiscal plan, including the following:

· economic forecast prudence, as shown by a lower outlook for B.C.’s major trading partners, resulting in a projection for B.C.’s real GDP growth that is within the range of private sector forecasters in 2023 and 2024;

· contingencies vote allocations of $5.5 billion in 2023/24, $4.8 billion in 2024/25 and $4.7 billion in 2025/26 to help manage unexpected pressures including pandemic and climate change and emergency response-related costs, as well as the cost of unsigned labour agreements;

· a forecast allowance of $700 million in 2023/24 and $500 million in 2024/25 and 2025/26 to guard against volatility, including revenue changes; and

· the natural gas revenue forecast continues to incorporate a prudent price forecast that is within the 20^th percentile of the private sector forecasts.

Conclusion

B.C.’s fiscal forecast for 2023/24 shows a higher deficit from budget, mainly as a result of lower natural gas royalties and higher spending for wildfire response. The province’s economy continues to be resilient, and debt projections have improved, maintaining the Province’s fiscal sustainability.

Government continues to invest in the priorities outlined in Budget 2023, including housing, health care and mental health, affordability, and climate change.

First Quarterly Report 2023/24 |  3

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PART 1     |      UPDATED 2023/24 FINANCIAL FORECAST

Introduction

Table 1.1 2023/24 Forecast Update
($ millions)	Budget 2023			First Quarterly Report			Change
Revenue		77,690			76,228			(1,462	)
Expense		(80,206	)		(81,202	)		(996	)
Pandemic Recovery Contingencies		(1,000	)		(1,000	)		-
Forecast allowance		(700	)		(700	)		-
Surplus (Deficit)		(4,216	)		(6,674	)		(2,458	)
Capital Spending:
Taxpayer-supported capital spending		11,813			12,180			367
Self-supported capital spending		4,027			4,073			46
		15,840			16,253			413
Provincial Debt:
Taxpayer-supported debt		75,617			70,772			(4,845	)
Self-supported debt		31,607			31,562			(45	)
Total debt (including forecast allowance)		107,924			103,034			(4,890	)
Taxpayer-supported debt-to-GDP ratio		18.9	%		17.6	%		-1.3	%
Taxpayer-supported debt-to-revenue ratio		100.1	%		95.5	%		-4.6	%

The first quarter update for 2023/24 shows a decline in revenue and an increase in spending resulting in a deficit of $6.7 billion — up $2.5 billion from the budget deficit forecast of $4.2 billion. The forecast for revenue is lower for personal income tax, carbon tax, natural gas royalties, and other natural resources, with increases in sales tax and property transfer tax. The expense forecast is higher mainly due to the wildfire response.

Details of the revenue and expense forecast changes from Budget 2023 are shown in Chart 1.1 and Table 1.2.

Chart 1.1 2023/24 Deficit – Major Changes from Budget 2023

 

First Quarterly Report 2023/24 |   5

Updated 2023/24 Financial Forecast

Table 1.2 2023/24 Financial Forecast Changes

	($ millions)
2023/24 deficit at Budget 2023 (February 28, 2023)		(4,216	)
Revenue1 changes:
Personal income tax – weaker preliminary 2022 tax assessment partly offset by improvement in 2023 household income		(522	)
Corporate income tax – gain in prior-year settlement payment, offset by decrease in instalments reflecting revised outlook of 2023 national corporate taxable income		99
Provincial sales tax – higher 2022/23 carry forward and year-to-date sales activity		175
Property transfer tax – due to higher than expected sales results		151
Carbon tax – lower sales volume in most fuel types reflecting prior year and year-to-date results		(111	)
Tobacco tax – reflecting lower prior year and year-to-date sales results		(45	)
Other taxation sources – mainly reflecting the impacts of the 2022/23 year-end and year-to-date results		122
Natural gas royalties – lower prices, volumes and natural gas liquids royalties, partly offset by decreased utilization of royalty and infrastructure programs/credit		(1,179	)
Mining – lower coal prices and production, partly offset by higher copper prices		(174	)
Electricity sales under the Columbia River Treaty – lower Mid-C electricity prices		(44	)
Forests – mainly higher stumpage rates		40
Other natural resources – mainly lower water rental revenues, other fees and rental tenure revenue		(23	)
Fees, licences, investment earnings and miscellaneous revenue:
Post-secondary institutions		36
Other sources – mainly higher revenue from fees and investment earnings		111
Canada health and social transfers – mainly one-time funding to strengthen public health care		282
Other federal government transfers – mainly lower claims under the Disaster Financial Assistance Arrangements relating to 2021 rainstorm		(383	)
Commercial Crown corporation net income		3
Total revenue changes		(1,462	)
Less : expense1 increases (decreases):
Consolidated Revenue Fund changes:
Statutory spending:
Fire management costs		762
Housing Priority Initiatives Special Account		104
Other statutory spending		17
Refundable tax credits – mainly reflects lower film tax credits		(81	)
Other expense changes – mainly higher interest costs		91
Spending funded by third party recoveries		(73	)
Changes in spending profile of service delivery agencies:
School districts		177
Universities		165
Colleges and institutes		152
Health authorities and hospital societies		1,170
Other service delivery agencies2		455
(Increase) decrease in transfers to service delivery agencies - accounting elimination		(1,943	)
Total expense changes		996
Total changes		(2,458	)
2023/24 deficit at the First Quarterly Report		(6,674	)

¹ Detailed descriptions of changes are provided in the revenue and expense sections of this report. 

² Includes BC Transportation Financing Authority, BC Transit, BC Housing Management Commission, Community Living BC, and other entities.

6   | First Quarterly Report 2023/24

Updated 2023/24 Financial Forecast

Projected taxpayer-supported capital spending in 2023/24 is $12.2 billion, which is $367 million higher than forecast in Budget 2023, with increased spending in the health sector and social housing, partly offset by lower spending in the education sector. The self-supported capital spending forecast is $4.1 billion, with minor changes from budget.

The taxpayer-supported debt at the end of 2023/24 is forecast at $70.8 billion, which is lower by $4.8 billion compared to the Budget 2023 forecast as a result of lower debt balances at the end of fiscal 2022/23 in addition to higher cash balances. Self-supported debt is forecast to be $31.6 billion with minor changes from budget.

Revenue

Revenue for 2023/24 is forecast to be $76.2 billion — $1.5 billion lower than the projection in Budget 2023. The natural resource revenue forecast is lower by $1.4 billion mainly reflecting lower natural gas royalties. The remaining $138 million decrease to the revenue forecast reflects lower taxation revenue, mainly due to lower than expected preliminary 2022 income tax returns, effects of the economic update, the impacts of final 2022/23 revenue that carry forward, year-to-date results, and weaker federal government outlook of national corporate taxable income.

Chart 1.2 Revenue Changes from Budget 2023 

 

Detailed revenue projections are disclosed in Table 1.8, and key assumptions and sensitivities relating to revenue are provided in Table A1. An analysis on historical volatility of major economic drivers can be found in the 2023 B.C. Financial and Economic Review (pages 17-18). For 2023/24, the major changes from the Budget 2023 forecast include the following:

First Quarterly Report 2023/24 |   7

Updated 2023/24 Financial Forecast

Table 1.3 Comparison of Major Factors Underlying Revenue

Calendar Year	First Quarterly Report								Budget 2023
Per cent growth unless otherwise indicated	2022		2023		2024		2025		2022		2023		2024		2025
Real GDP		3.3		1.2		0.8		2.4		2.8		0.4		1.5		2.4
Nominal GDP		11.7		2.9		3.3		4.3		11.0		2.8		3.7		4.2
Household income		6.7		6.3		4.2		4.1		7.1		6.1		4.3		4.1
Wages and salaries		10.7		5.9		5.1		4.6		11.3		6.3		5.2		4.4
Corporations net operating surplus		20.8		-11.8		-9.1		1.5		13.5		-14.5		-7.0		2.3
Employment		3.2		1.1		0.8		1.3		3.2		0.4		1.0		1.2
Consumer expenditures on durable goods		-2.6		2.0		0.8		2.2		-4.3		-3.6		0.1		2.6
Consumer expenditures on goods and services		10.4		6.4		4.7		4.4		9.6		6.9		4.9		4.2
Business investment		12.7		4.0		4.8		5.5		11.5		1.4		5.5		7.0
Residential investment		8.6		3.3		3.5		2.9		8.2		-1.5		4.7		5.3
Retail sales		3.1		2.4		2.5		3.4		3.0		1.8		2.9		3.4
Consumer Price Index		6.9		3.9		2.5		2.2		6.9		3.9		2.5		2.2
Residential sales value		-30.4		-11.6		16.9		7.4		-30.3		-19.8		20.5		8.2
B.C. Housing starts		-1.9		0.0		-9.8		-5.0		-1.9		-16.5		-5.1		2.7
U.S. Housing starts		-3.0		-11.1		-2.5		0.4		-3.0		-16.6		3.9		0.4
SPF 2x4 price ($US/thousand board feet)	$	814	$	400	$	450	$	500	$	814	$	400	$	450	$	500
Exchange rate (US cents/Canadian dollar)		76.8		74.7		75.8		77.6		76.8		74.7		77.4		78.6

Fiscal Year	2022/23		2023/24		2024/25		2025/26		2022/23		2023/24		2024/25		2025/26
Natural gas price ($Cdn/GJ at plant inlet)	$	4.09	$	1.29	$	2.03	$	2.33	$	3.81	$	3.04	$	2.69	$	2.55
Bonus bid average bid price per hectare ($)	$	0	$	200	$	200	$	300	$	200	$	275	$	300	$	200
Electricity price ($US/mega-watt hour, Mid-C)	$	85	$	93	$	90	$	92	$	93	$	108	$	99	$	95
Metallurgical coal price ($US/tonne, fob Australia)	$	322	$	248	$	222	$	210	$	318	$	252	$	223	$	204
Copper price ($US/lb)	$	3.87	$	3.82	$	3.96	$	4.09	$	3.74	$	3.56	$	3.73	$	3.85
Average stumpage rates ($Cdn/cubic metre)	$	38.05	$	19.04	$	19.42	$	22.14	$	36.20	$	18.07	$	18.96	$	21.82
Crown harvest volumes (million cubic metres)		37.2		38.0		38.0		38.0		39.0		38.0		38.0		38.0

Income Tax Revenue

Personal income tax revenue is down $522 million reflecting weaker 2022 preliminary tax assessment information, partly offset by slightly improved 2023 household income.

Corporate income tax revenue is up $99 million as a result of improvement from prior-year settlement payments, partially offset by lower advance instalments from the federal government. The budget forecast included a $1.1 billion prior-year settlement payment due to the federal government but instead this adjustment was recognized in the fiscal year 2022/23, reflecting the preliminary 2022 tax assessment information. 

This improvement is offset by lower advance instalments from the federal government. The lower forecast for advance instalments is due to a significant change in the federal government forecast for 2023 national corporate taxable income, which is expected to decline by 16.5 per cent compared to a decline of 3.1 per cent assumed at budget.

Other Tax Revenue

Provincial sales tax revenue is up $175 million mainly due to improvements reflected in the 2022/23 Public Accounts that will carry forward, as well as increases in various components of taxable expenditures in 2023.

Property transfer tax revenue is up $151 million mainly due to higher-than-expected activity in the housing market reflecting demand, consistent with higher than assumed residential sales values.

Tobacco tax revenues are down $45 million due to lower year-to-date sales.

8   | First Quarterly Report 2023/24

Updated 2023/24 Financial Forecast

Fuel tax revenues are down $30 million due to the impacts of lower 2022/23 and year-to-date sales volumes.

Carbon tax revenues are down $111 million due to the impacts of lower 2022/23 year-end results as well as year-to-date sales volumes on major fuel types. Carbon tax projection includes a tax rate increase to $65/tonne of carbon dioxide equivalent emissions, effective April 1, 2023, which was included in the Budget 2023 forecast.

Other taxation revenues are up $152 million due to higher property, insurance premium and employer health taxes reflecting the impacts of the 2022/23 results.

Natural Resources Revenue

Revenue from natural gas royalties is down $1.2 billion mainly due to lower prices for natural gas and natural gas liquids as well as slightly lower natural gas volumes, partially offset by decreased utilization of royalty and infrastructure program credits.

The updated natural gas price forecast is $1.29 ($Cdn/gigajoule, plant inlet), down from the Budget 2023 outlook ($3.04). The price assumption is within the 20th percentile of the private sector forecasters, continuing the prudence incorporated since 2013/14. Natural gas royalty rates are sensitive to prices in the $1.22 to $2.42 range. Hence, the effective royalty rate is generally expected to fall as prices decrease, depending on the take up of royalty program credits. Since the prices for natural gas liquids (e.g. pentane and condensate) are more closely aligned to oil rather than natural gas, the lower byproduct royalties from these commodities reflect the expected decrease in oil prices, now forecast to be $74.56 US/barrel in 2023/24, down 8 per cent from the budget outlook.

Revenue from coal, metals, minerals and other mining-related sources is down $174 million mainly due to lower coal prices and production reflecting global excess coal supply. This decrease is partially offset by higher copper prices.

Revenue from electricity sales under the Columbia River Treaty is down $44 million mainly reflecting lower Mid-C electricity prices which are closely aligned with natural gas prices. The price forecast reflects increased hydro capacity and availability of solar power in western electricity markets. Mid-C electricity prices, now forecast to be $92.90 US/mega-watt hour, are down 14 per cent from the budget outlook.

Forest revenue is up $40 million mainly due to higher stumpage revenue reflecting regular updates to the market pricing system. Total stumpage rates, now forecast to be $19.04 Cdn/cubic metre, are up 5 per cent from the budget outlook.

Revenue from other natural resources is down $23 million mainly due to decreased water rentals collected under the Water Sustainability Act and lower revenue related to annual natural gas and petroleum tenure payments.

Other Taxpayer-Supported Revenue

Other taxpayer-supported revenue consists of revenue from fees, licences, investment earnings and miscellaneous sources. These revenue sources are now expected to total $10.7 billion, up $147 million from budget.

The updated forecast for fee revenues totals $5.3 billion, up $81 million from budget mainly due to higher projections from post-secondary institutions and health authorities. The revised forecast for investment earnings is $1.4 billion, up $60 million from budget mainly due to higher interest rates. The miscellaneous revenue outlook of $4 billion is up $6 million from budget mainly due to increased projections from taxpayer-supported Crown entities.

First Quarterly Report 2023/24 |   9

Updated 2023/24 Financial Forecast

Federal Government Transfers

Federal government contributions are expected to be $13.5 billion, down $101 million from budget.

Canada health and social transfers have improved by $282 million, mainly reflecting one-time funding to strengthen the public health care system.

Other federal government contributions are down $383 million mainly due to lower claims under the Disaster Financial Assistance Arrangements, reflecting changes in cost and timing related to the 2021 November rainstorm event.

Expense

The First Quarterly Report expense forecast for 2023/24 is $996 million higher than Budget 2023 mainly due to higher spending for wildfire response and supportive housing initiatives.

Chart 1.3 Expense Changes from Budget 2023

 

Consolidated Revenue Fund (CRF) Spending

Statutory spending is projected at $802 million in 2023/24 and includes the following:

· $762 million for fire management costs — this is in addition to the $204 million in the fire management voted appropriation, for a total spending forecast of $966 million;

· $104 million increase to support decampment in Vancouver and to provide permanent housing for individuals residing in temporary housing through the Housing Priority Initiatives Special Account;

· $17 million in other statutory spending; offset by,

· $81 million lower refundable tax transfers mainly reflecting lower film tax credits.

10   | First Quarterly Report 2023/24

Updated 2023/24 Financial Forecast

Other changes in CRF spending include $91 million increase in debt servicing costs due to higher interest rates.

Contingencies

Budget 2023 includes a Contingencies vote of $5.5 billion in 2023/24, with $1.0 billion in the Pandemic Recovery sub-vote, $2.2 billion allocated to Shared Recovery Mandate, and $2.3 billion allocated to General Programs, CleanBC and Climate & Emergency Response. Contingencies help fund unexpected costs such as flood recovery, wage mandate, increased costs for government services, and emerging priorities. These allocations remain unchanged in the First Quarterly Report.

Pandemic Recovery Contingencies

Budget 2023 allocated $1.0 billion for continued measures related to the pandemic and economic recovery. Table 1.4 provides an update on the notional allocations of the Province’s pandemic measures as of June 30, 2023.

Table 1.4 2023/24 Pandemic Recovery Contingencies

$ millions	Updated Forecast
Initiative	Budget 2023		Q1
Health COVID-19 Management		875		875
Supports for Vulnerable Populations		20		20
Tourism Initiative Envelope		20		20
Unallocated: available for additional health or recovery measures		85		85
Total		1,000		1,000

Spending Recovered from Third Parties

Expenses funded by third parties are forecast to decrease by $73 million mainly due to lower recoveries from commercial Crown corporations through the fiscal agency loan program.

Operating Transfers to Service Delivery Agencies

Operating transfers to service delivery agencies are forecast to be $1.9 billion higher than Budget 2023 mainly due to higher grants to health organizations ($973 million) and education sector ($412 million) for wage mandate, a $311 million increase to BC Housing Management Commission, and an additional $247 million to other service delivery agencies. These funding increases are related to spending forecast changes noted below.

Service Delivery Agency Spending

Service delivery agency expenses are forecast to increase by $2.1 billion in 2023/24 compared to Budget 2023.

· School district expense forecasts are higher by $177 million mainly to reflect salary increases under the Shared Recovery Mandate and higher inflationary pressures affecting operating costs.

First Quarterly Report 2023/24 |   11

Updated 2023/24 Financial Forecast

· Post-secondary sector expenses are forecast to increase by $317 million mainly due to salary increases under the Shared Recovery Mandate, which are funded by increased provincial grants to the institutions.

· The health authority and hospital society expense forecast is $1.2 billion higher than Budget 2023, mainly due to salary increases under the Shared Recovery Mandate and higher operating costs.

· Other service delivery agency spending is forecast to be $455 million higher than budget mainly due to increased spending by the BC Housing Management Commission to fund additional supportive housing and various updates across a number of other agencies.

Detailed expense projections are disclosed in Table 1.9. Key spending assumptions and sensitivities are provided in the appendix Table A3.

Full-Time Equivalents for the BC Public Service

The projection of full-time equivalent (FTE) staff utilization for 2023/24 is 35,500 FTEs, an increase of 1,100 since budget, to support the continued response to a significant wildfire season and to implement key government priorities such as child care and education.

Provincial Capital Spending

Capital spending is projected to total $16.3 billion in 2023/24 — $413 million higher than the forecast in Budget 2023 (see Tables 1.5 and 1.11).

Table 1.5 2023/24 Capital Spending Update
	($ millions)
Taxpayer-supported capital spending at Budget 2023		11,813
Changes:
Timing of school district spending		(29	)
Timing of post-secondary institution spending		(33	)
Higher health authority spending		288
Timing of transportation sector spending		(3	)
Higher social housing spending		133
Other net adjustments to capital schedules		11
Total taxpayer-supported changes		367
Taxpayer-supported capital spending - updated forecast		12,180
Self-supported capital spending at Budget 2023		4,027
Higher BC Hydro spending		46
Self-supported capital spending - updated forecast		4,073
2023/24 provincial capital spending at the First Quarterly Report		16,253

Taxpayer-supported capital spending is projected at $12.2 billion. The $367 million increase since Budget 2023 is primarily due to higher planned spending on health routine capital programs by health authorities and social housing projects. This is partially offset by timing changes in capital spending on K-12 and post-secondary projects.

12   | First Quarterly Report 2023/24

Updated 2023/24 Financial Forecast

At $4.1 billion, self-supported capital spending is $46 million higher than Budget 2023 primarily due to changes in the timing of BC Hydro expenditures.

Projects Over $50 million

Capital spending on projects greater than $50 million is presented in Table 1.12. Since Budget 2023 thirty projects have been added to the table:

· Carson Elementary School ($61 million);

· Guildford Park Secondary School ($65 million);

· La Vallée (Pemberton) Elementary School ($66 million);

· New Cloverley Elementary School ($64 million);

· New East Side Elementary School ($59 million);

· North East Latimer Elementary School ($52 million);

· Prince Rupert Middle School ($127 million);

· Tamanawis Secondary School ($57 million);

· Capilano University – New Squamish Campus ($63 million);

· Vancouver Community College – Centre for Clean Energy and Automotive Innovation ($291 million);

· Abbotsford Long-Term Care ($211 million);

· Campbell River Long-Term Care ($134 million);

· Delta Long-Term Care ($180 million);

· FW Green Long-Term Care ($156 million);

· Richmond Long-Term Care ($178 million);

· Burnaby Hospital Redevelopment Phase 2 and BC Cancer Centre ($1.731 billion);

· Belleville Terminal Replacement ($304 million);

· Blackwater North Fraser Slide ($203 million);

· Cottonwood Hill at Highway 97 Slide ($335 million);

· Highway 1 Corridor – Falls Creek ($143 million);

· Highway 1 Goldstream Safety Improvements ($162 million);

· Highway 1 Jumping Creek to MacDonald ($245 million);

· Highway 1 Selkirk ($129 million);

· 1015 Hastings St. Development ($151 million);

· 128 to 134 East Cordova St. ($166 million);

· 320 Hastings St E. Redevelopment ($86 million);

· BC Hydro – Kootenay Canal modernize controls project ($61 million);

· BC Hydro – Peace to Kelly Lake stations sustainment project ($344 million);

First Quarterly Report 2023/24 |   13

Updated 2023/24 Financial Forecast

· BC Hydro – John Hart dam seismic upgrade project ($913 million); and

· BC Hydro – Bridge River 1 replace units 1-4 generators/governors project ($313 million).

The following projects have been removed since Budget 2023 and are no longer listed in the table:

· British Columbia Institute of Technology – Health Sciences Centre for Advanced Simulation; and

· Highway 1 Lower Lynn Corridor improvements.

Changes since Budget 2023 for existing projects include:

· Burnaby North Secondary project’s year of completion was amended from 2023 to 2024 to align with revised project schedule;

· Simon Fraser University – Student Housing project’s anticipated total cost decreased from $112 million to $108 million to reflect final project cost. Other contributions decreased from $39 million to $35 million;

· University of Victoria – Student Housing project’s anticipated total cost increased from $231 million to $236 million to reflect revised project cost. Contributions from other sources increased from $103 million to $108 million;

· Royal Roads University – West Shore Learning Centre project’s anticipated total cost increased from $100 million to $106 million to reflect revised project cost. Contributions from other sources increased from $20 million to $26 million;

· University of Victoria - Engineering and Computer Science Building Expansion project’s anticipated total cost increased from $90 million to $133 million to reflect revised project cost. Internal borrowing increased from $65 million to $97 million and other contributions increased from $25 million to $36 million. Project’s anticipated year of completion was amended to align with revised project schedule;

· British Columbia Institute of Technology – Student Housing project’s year of completion was amended from 2024 to 2025 to align with revised project schedule;

· North Island College – Student Housing project’s year of completion was amended from 2024 to 2025 to align with revised project schedule;

· Vancouver Island University – Student Housing project’s year of completion was amended from 2025 to 2026 to align with revised project schedule;

· Peace Arch Hospital Renewal project’s anticipated total cost decreased from $91 million to $87 million to reflect revised project cost. Other contributions decreased from $83 million to $79 million;

· The Clinical and Systems Transformation project’s anticipated total cost increased from $754 million to $799 million to reflect revised project cost. Other contributions increased from $52 million to $97 million;

· Burnaby Hospital Redevelopment – Phase 1 project’s anticipated total cost increased from $612 million to $683 million to reflect the revised project scope. Internal borrowing increased from $578 million to $633 million and other contributions increased from $34 million to $50 million;

14   | First Quarterly Report 2023/24

Updated 2023/24 Financial Forecast

· Dawson Creek and District Hospital Replacement project’s anticipated total cost increased from $378 million to $590 million to reflect the updated post-tender budget. Internal borrowing increased from $247 million to $413 million and other contributions increased from $131 million to $177 million;

· Royal Inland Hospital Phil and Jennie Gaglardi Tower project’s year of completion was amended from 2026 to 2027 to align with revised project schedule;

· Cariboo Memorial Hospital Redevelopment project’s year of completion was amended from 2028 to 2029 to align with revised project schedule;

· Vancouver General Hospital – Operating Rooms Renewal Phase 2 project’s year of completion was amended from 2028 to 2029 to align with revised project schedule;

· Royal BC Museum – Collections and Research Building project’s anticipated total cost increased from $224 million to $270 million to reflect revised project budget. Internal borrowing increased from $224 million to $270 million;

· Highway 1 Chase Four-Laning project’s anticipated total cost decreased from $220 million to $196 million to reflect revised project cost. Internal borrowing decreased from $208 million to $184 million;

· Highway 1 Salmon Arm West project’s anticipated total cost decreased from $155 million to $140 million to reflect revised project cost. Internal borrowing decreased from $124 million to $109 million;

· Highway 1 Quartz Creek Bridge Replacement project’s anticipated total cost decreased from $121 million to $119 million to reflect revised project cost. Internal borrowing decreased from $71 million to $69 million;

· BC Transit Victoria HandyDART Facility project’s anticipated total cost increased from $60 million to $84 million to reflect revised project cost. Internal borrowing increased from $26 million to $41 million and other contributions increased from $13 million to $22 million;

· Highway 1 R.W. Bruhn Bridge project’s year of completion was amended from 2025 to 2027 to align with revised project schedule. The project’s anticipated total cost increased from $225 million to $255 million to reflect revised project cost. Internal borrowing increased from $134 million to $164 million;

· UBC load increase stage 2 project’s anticipated total cost decreased from $56 million to $53 million as final costs were lower than estimated for underground works;

· Bridge River 2 upgrade units 7 and 8 project’s anticipated total cost decreased from $78 million to $75 million due to lower contractor cost;

· Mica units 1 to 4 generator transformers replacement project’s anticipated total cost increased from $80 million to $89 million due to purchasing additional spare transformer and constructing infrastructure to store this equipment;

· Mount Lehman substation upgrade project’s anticipated total cost decreased from $58 million to $55 million due to construction efficiencies and an earlier in service date; and

· Wahleach refurbish generator project’s anticipated total cost increased from $51 million to $64 million to reflect changes to project scope, severe weather in 2021 and supply chain disruptions.

First Quarterly Report 2023/24 |   15

Updated 2023/24 Financial Forecast

Provincial Debt

The provincial debt is projected to total $103.0 billion by the end of the fiscal year — $4.9 billion lower than the forecast in Budget 2023. This improvement is primarily due to lower debt balance from fiscal 2022/23 and changes in cash balances.

Table 1.6 2023/24 Provincial Debt Update ¹ 

	($ millions)
Taxpayer-supported debt forecast at Budget 2023		75,617
Changes:
Lower debt level from 2022/23		(3,767	)
Changes in operating results (before forecast allowance)		2,458
Non-cash items		57
Changes in cash balances 2		(3,760	)
Changes in other working capital balances 3		(200	)
Taxpayer-supported capital spending		367
Total taxpayer-supported changes		(4,845	)
Taxpayer-supported debt - updated forecast		70,772
Self-supported debt forecast at Budget 2023		31,607
Changes:
Lower debt level from 2022/23		(296	)
Higher capital spending		46
Changes in internal financing		205
Total self-supported changes		(45	)
Self-supported debt - updated forecast		31,562
Forecast allowance		700
2023/24 provincial debt forecast at the First Quarterly Report		103,034

¹  Provincial debt is prepared in accordance with Generally Accepted Accounting Principles and presented consistent with the Debt Summary Report included in the Public Accounts. Debt is shown net of sinking funds and unamortized discounts, excludes accrued interest, and includes non-guaranteed debt directly incurred by commercial Crown corporations and debt guaranteed by the Province.

²  Reflects changes in cash balances at April 1, 2023 and includes all cash balances from the Consolidated Revenue Fund, School Districts, Universities, Colleges, Health Authorities, Hospital Societies and other taxpayer-supported agencies.

³  Changes in other working capital balances include changes in accounts receivables, accounts payable, accrued liabilities, deferred revenue, investments, restricted assets and other assets.

Taxpayer-supported debt is forecast to be $70.8 billion at the end of 2023/24 — $4.8 billion lower than forecast in Budget 2023. This decrease reflects a lower opening balance of $3.8 billion, and changes in cash and other working capital balances of $4.0 billion, offset by higher operating deficit of $2.5 billion and higher capital spending of $367 million.

The taxpayer-supported debt-to-GDP ratio is projected to end 2023/24 at 17.6 per cent — 1.3 percentage points lower than forecast in Budget 2023. The taxpayer-supported debt-to-revenue ratio is forecast to end the fiscal year at 95.5 per cent — 4.6 percentage points lower than forecast at budget.

16   | First Quarterly Report 2023/24

Updated 2023/24 Financial Forecast

Chart 1.4 Debt Affordability

¹  The 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.

Self-supported debt is forecast to be $31.6 billion at the end of 2023/24 — consistent with the forecast in Budget 2023. The forecast allowance remains at $700 million.

While the Province’s debt level is expected to increase by $13.6 billion over the year, the B.C. government is able to borrow at relatively low interest rates, with debt affordability remaining at levels that are lower than they have been historically. The Province’s taxpayer-supported interest bite is 3.1 cents per dollar of revenue.

Details on provincial debt are shown in Table 1.13.

Total provincial debt is presented consistent with the Debt Summary Report included in the Public Accounts. Debt is shown net of sinking fund investments and unamortized discounts, excludes accrued interest, and includes non-guaranteed debt directly incurred by commercial Crown corporations and debt guaranteed by the Province. The reconciliation between provincial debt and the financial statement debt is shown in Table 1.14.

Risks to the Fiscal Forecast

The major risks to the updated economic and fiscal forecasts include persistent price pressures leading to higher than anticipated interest rates for longer and weaker global demand. Other risks include climate change impacts, housing affordability, and volatility in commodity markets.

Personal and corporate income tax revenues take over a year to finalize. For example, tax assessments for the 2022 tax year will not be finalized until March 2024 (and assessments for the 2023 tax year will not be finalized until March 2025, and so on). Property transfer tax and provincial sales tax revenues are impacted by the number of residential transactions, average home sale prices and the amount of taxable purchases of goods and services. Natural resource revenues are affected by international commodity prices, and the health of B.C.’s major trading partners.

First Quarterly Report 2023/24 |   17

Updated 2023/24 Financial Forecast

The spending forecast contained in the fiscal plan is based on ministry and service delivery agency plans. Risks include changes in planning assumptions such as demand for government services in the health care, education, and community social services sectors, as well as costs associated with fighting forests fires and responding to other natural disasters.

Capital spending may be influenced by several factors including design development, procurement activity, labour shortages, ongoing supply chain issues, inflation, weather, geotechnical conditions and interest rates.

As a result of these uncertainties, the actual operating result, capital spending, and debt levels may differ from the current forecast. Government will continue to update the fiscal outlook throughout the year in the second and third quarterly reports.

The potential fiscal impacts from these risks may be partly offset by the prudence incorporated in the updated forecast, including an economic outlook within the range of the private sector forecasters, the $5.5 billion contingencies vote allocation, and the $700 million forecast allowance.

18   | First Quarterly Report 2023/24

Updated 2023/24 Financial Forecast

Supplementary Schedules

The following tables provide the financial results for the three months ended June 30, 2023 and the 2023/24 full-year forecast.

Table 1.7 2023/24 Operating Statement

	Year-to-Date to June 30												Full Year
	2023/24									Actual			2023/24									Actual
($ millions)	Budget			Actual			Variance			2022/23 1			Budget			Forecast			Variance			2022/23
Revenue		20,106			20,729			623			17,751			77,690			76,228			(1,462	)		81,536
Expense		(17,834	)		(18,405	)		(571	)		(16,619	)		(81,206	)		(82,202	)		(996	)		(80,832	)
Surplus (deficit) before forecast allowance		2,272			2,324			52			1,132			(3,516	)		(5,974	)		(2,458	)		704
Forecast allowance		-			-			-			-			(700	)		(700	)		-			-
Surplus (deficit)		2,272			2,324			52			1,132			(4,216	)		(6,674	)		(2,458	)		704
Accumulated surplus (deficit) beginning of the year before remeasurement gains and losses		8,355			2,905			(5,450	)		2,211			8,355			2,905			(5,450	)		2,201
Adjustments to accumulated surplus (deficit) 1		-			942			942			674			-			-			-			-
Accumulated surplus (deficit) before remeasurement gains and losses		10,627			6,171			(4,456	)		4,017			4,139			(3,769	)		(7,908	)		2,905
Effect of remeasurement gains and (losses)		(836	)		(282	)		554			170			(836	)		(202	)		634			(202	)
Accumulated surplus (deficit) end of period		9,791			5,889			(3,902	)		4,187			3,303			(3,971	)		(7,274	)		2,703

¹  Restated to reflect government’s current accounting policies.

First Quarterly Report 2023/24 |   19

Updated 2023/24 Financial Forecast

Table 1.8 2023/24 Revenue by Source

	Year-to-Date to June 30												Full Year
	2023/24									Actual			2023/24							Actual
($ millions)	Budget			Actual			Variance			2022/23 1			Budget		Forecast		Variance			2022/23
Taxation
Personal income		3,942			3,942			-			3,181			15,953		15,431		(522	)		17,268
Corporate income		3,533			3,533			-			2,612			5,938		6,037		99			9,156
Employer health		683			679			(4	)		599			2,731		2,750		19			2,720
Sales 2		2,460			2,709			249			2,319			10,187		10,362		175			9,818
Fuel		239			239			-			250			1,072		1,042		(30	)		1,021
Carbon		680			708			28			566			2,811		2,700		(111	)		2,161
Tobacco		126			123			(3	)		157			565		520		(45	)		531
Property		864			861			(3	)		773			3,488		3,591		103			3,253
Property transfer		507			555			48			863			1,799		1,950		151			2,293
Insurance premium		194			194			-			165			780		810		30			804
		13,228			13,543			315			11,485			45,324		45,193		(131	)		49,025
Natural resource
Natural gas royalties		505			193			(312	)		552			2,016		837		(1,179	)		2,255
Forests		148			149			1			277			846		886		40			1,887
Other natural resource revenues 3		415			481			66			587			1,902		1,661		(241	)		2,056
		1,068			823			(245	)		1,416			4,764		3,384		(1,380	)		6,198
Other revenue
Post-secondary education fees		484			483			(1	)		463			2,770		2,829		59			2,651
Fees and licenses 4		554			590			36			555			2,412		2,434		22			2,277
Investment earnings		350			418			68			291			1,349		1,409		60			1,316
Miscellaneous 5		874			1,089			215			976			3,989		3,995		6			4,445
		2,262			2,580			318			2,285			10,520		10,667		147			10,689
Contributions from the federal government
Health and social transfers		2,243			2,516			273			2,098			8,970		9,252		282			8,769
Other federal government contributions 6		694			531			(163	)		522			4,623		4,240		(383	)		3,757
		2,937			3,047			110			2,620			13,593		13,492		(101	)		12,526
Commercial Crown corporation net income
BC Hydro		21			(4	)		(25	)		(12	)		712		712		-			360
Liquor Distribution Branch		303			304			1			324			1,150		1,150		-			1,199
BC Lottery Corporation 7		286			292			6			405			1,456		1,456		-			1,584
ICBC 8		(39	)		95			134			(817	)		-		-		-			(197	)
Other 9		40			49			9			45			171		174		3			152
		611			736			125			(55	)		3,489		3,492		3			3,098
Total revenue		20,106			20,729			623			17,751			77,690		76,228		(1,462	)		81,536

¹  Restated to reflect government’s current accounting policies.

²  Includes provincial sales tax and HST/PST housing transition tax related to prior years.

³  Columbia River Treaty, other energy and minerals, water rental and other resources.

⁴  Healthcare-related, motor vehicle, and other fees.

⁵  Includes reimbursements for health care and other services provided to external agencies, and other recoveries.

⁶  Includes contributions for health, education, community development, housing and social service programs, and transportation projects.

⁷  Net of payments to the federal government and payments to the BC First Nations Gaming Revenue Sharing Limited Partnership in accordance with section 14.3 of the Gaming Control Act (B.C.).

⁸  2022/23 full year actual does not include non-controlling interest and will be restated in future quarterly reports to reflect the adoption of IFRS 9 and IFRS 17.

⁹  Includes Columbia Power Corporation, BC Railway Company, Columbia Basin power projects, and post-secondary institutions’ self-supported subsidiaries.

20   | First Quarterly Report 2023/24

Updated 2023/24 Financial Forecast

Table 1.9 2023/24 Expense by Ministry, Program and Agency

	Year-to-Date to June 30												Full Year
	2023/24									Actual			2023/24									Actual
($ millions)	Budget			Actual			Variance			2022/23 1			Budget			Forecast			Variance			2022/23
Office of the Premier		4			4			-			4			16			16			-			14
Agriculture and Food		24			25			1			38			112			112			-			292
Attorney General		202			219			17			202			773			776			3			807
Children and Family Development		474			451			(23	)		401			1,912			1,912			-			1,743
Citizens’ Services		155			191			36			172			683			683			-			768
Education and Child Care		2,470			2,587			117			2,330			8,874			8,874			-			8,233
Emergency Management and Climate Readiness		28			27			(1	)		27			101			101			-			821
Energy, Mines and Low Carbon Innovation		21			18			(3	)		17			129			134			5			399
Environment and Climate Change Strategy		48			66			18			78			255			263			8			574
Finance		412			472			60			197			1,578			1,682			104			4,059
Forests		218			283			65			206			925			1,687			762			1,190
Health		6,373			6,464			91			6,030			28,674			28,674			-			26,385
Housing		213			214			1			163			897			897			-			897
Indigenous Relations and Reconciliation		47			39			(8	)		84			188			188			-			777
Jobs, Economic Development and Innovation		28			34			6			26			113			113			-			225
Labour		5			9			4			7			21			21			-			34
Mental Health and Addictions		4			4			-			3			27			27			-			198
Municipal Affairs		228			175			(53	)		230			269			269			-			1,923
Post-Secondary Education and Future Skills		718			755			37			656			2,770			2,770			-			2,691
Public Safety and Solicitor General		260			243			(17	)		248			1,028			1,028			-			1,126
Social Development and Poverty Reduction		1,136			1,162			26			1,111			4,745			4,745			-			4,689
Tourism, Arts, Culture and Sport		60			55			(5	)		39			182			182			-			427
Transportation and Infrastructure		246			240			(6	)		237			1,021			1,021			-			2,044
Water, Land and Resource Stewardship		27			43			16			34			124			124			-			464
Total ministries and Office of the Premier		13,401			13,780			379			12,540			55,417			56,299			882			60,780
Management of public funds and debt		294			346			52			332			1,309			1,400			91			1,314
Contingencies - Shared Recovery Mandate		-			-			-			-			2,200			2,200			-			-
Contingencies - General programs, CleanBC and Climate & Emergency Response		-			-			-			-			2,300			2,300			-			1
Pandemic Recovery Contingencies		-			-			-			151			1,000			1,000			-			-
Funding for capital expenditures		464			382			(82	)		238			4,540			4,429			(111	)		2,248
Refundable tax credit transfers		676			664			(12	)		497			3,159			3,078			(81	)		3,920
Legislative Assembly and other appropriations		50			46			(4	)		38			214			216			2			181
Total appropriations		14,885			15,218			333			13,796			70,139			70,922			783			68,444
Elimination of transactions between appropriations 2		-			(8	)		(8	)		(4	)		(32	)		(33	)		(1	)		(24	)
Prior year liability adjustments		-			-			-			-			-			-			-			(98	)
Consolidated revenue fund expense		14,885			15,210			325			13,792			70,107			70,889			782			68,322
Expenses recovered from external entities		867			879			12			693			4,909			4,836			(73	)		4,919
Elimination of funding provided to service delivery agencies		(9,666	)		(9,133	)		533			(8,495	)		(41,212	)		(43,044	)		(1,832	)		(38,236	)
Total direct program spending		6,086			6,956			870			5,990			33,804			32,681			(1,123	)		35,005
Service delivery agency expense
School districts		2,428			2,460			32			2,253			8,356			8,533			177			7,933
Universities		1,451			1,493			42			1,385			6,369			6,534			165			6,053
Colleges and institutes		379			385			6			379			1,574			1,726			152			1,591
Health authorities and hospital societies		5,601			5,379			(222	)		5,043			22,645			23,815			1,170			22,814
Other service delivery agencies		1,889			1,732			(157	)		1,569			8,458			8,913			455			7,436
Total service delivery agency expense		11,748			11,449			(299	)		10,629			47,402			49,521			2,119			45,827
Total expense		17,834			18,405			571			16,619			81,206			82,202			996			80,832

¹  Restated to reflect government’s current organization and accounting policies.

² Reflects payments made under an agreement where an expense from a voted appropriation is recorded as revenue by a special account.

First Quarterly Report 2023/24 |   21

Updated 2023/24 Financial Forecast

Table 1.10 2023/24 Expense by Function

	Year-to-Date to June 30									Full Year
	2023/24							Actual		2023/24							Actual
($ millions)	Budget		Actual		Variance			2022/23 1		Budget		Forecast		Variance			2022/23
Health 2		7,035		7,217		182			6,614		30,927		30,956		29			30,322
Education 3		4,521		4,686		165			4,277		17,600		17,862		262			16,991
Social services		2,087		2,061		(26	)		1,783		9,158		9,148		(10	)		9,652
Protection of persons and property		567		558		(9	)		567		2,324		2,319		(5	)		3,483
Transportation		569		618		49			507		2,616		2,634		18			3,319
Natural resources and economic development		817		950		133			773		4,432		5,161		729			6,284
Other		1,039		1,009		(30	)		762		3,485		3,437		(48	)		5,736
Contingencies - Shared Recovery Mandate		-		-		-			-		2,200		2,200		-			-
Contingencies - General programs, CleanBC and Climate & Emergency Response 4		-		-		-			-		2,300		2,300		-			-
Pandemic Recovery Contingencies 4		-		-		-			151		1,000		1,000		-			-
General government		456		527		71			480		1,929		1,931		2			2,326
Debt servicing		743		779		36			705		3,235		3,254		19			2,719
Total expense		17,834		18,405		571			16,619		81,206		82,202		996			80,832

¹  Figures have been restated to reflect government’s current accounting policies.

²  Payments for healthcare services by the Ministry of Social Development and Poverty Reduction and the Ministry of Children and Family Development made on behalf of their clients are reported in the Health function.

³  Payments for training costs by the Ministry of Social Development and Poverty Reduction made on behalf of its clients are reported in the Education function.

⁴  Contingencies for the prior fiscal year are reported in the relevant functions; the current year forecast is not yet allocated to functions.

22   | First Quarterly Report 2023/24

Updated 2023/24 Financial Forecast

Table 1.11 2023/24 Capital Spending

	Year-to-Date to June 30									Full Year
	2023/24							Actual		2023/24							Actual
($ millions)	Budget		Actual		Variance			2022/23		Budget		Forecast		Variance			2022/23
Taxpayer-supported
Education
School districts		233		184		(49	)		214		1,019		990		(29	)		934
Post-secondary institutions		258		219		(39	)		161		1,716		1,683		(33	)		1,071
Health		218		195		(23	)		129		3,243		3,531		288			1,915
BC Transportation Financing Authority		851		392		(459	)		393		3,947		3,968		21			1,823
BC Transit		60		22		(38	)		26		232		208		(24	)		100
Government ministries		116		97		(19	)		78		701		699		(2	)		470
Social housing 1		140		232		92			62		808		941		133			357
Other		21		19		(2	)		12		147		160		13			85
Total taxpayer-supported		1,897		1,360		(537	)		1,075		11,813		12,180		367			6,755
Self-supported
BC Hydro		1,145		1,099		(46	)		894		3,815		3,861		46			3,919
Columbia Basin power projects 2		2		5		3			2		9		9		-			10
BC Railway Company		1		1		0			-		7		7		-			6
ICBC		13		8		(5	)		18		65		65		-			41
BC Lottery Corporation 3		18		6		(12	)		4		103		103		-			95
Liquor Distribution Branch		6		2		(4	)		3		28		28		-			16
Other 4		-		-		-			-		-		-		-			78
Total self-supported		1,185		1,121		(64	)		921		4,027		4,073		46			4,165
Total capital spending		3,082		2,481		(601	)		1,996		15,840		16,253		413			10,920

¹  Includes BC Housing Management Commission and Provincial Rental Housing Corporation.

²  Joint ventures of the Columbia Power Corporation and Columbia Basin Trust.

³  Excludes right-of-use assets except for 2022/23 full year actual.

⁴  Includes post-secondary institutions’ self-supported subsidiaries.

First Quarterly Report 2023/24 |   23

Updated 2023/24 Financial Forecast

Table 1.12 Capital Expenditure Projects Greater Than $50 million ¹
Note: Information in bold type denotes changes from Budget 2023 released on February 28, 2023.

($ millions)	Year of Completion	Project Cost to Jun. 30, 2023		Estimated Cost to Complete		Anticipated Total Cost		Internal/ Borrowing		P3 Liability		Federal Gov’t		Other Contrib’ns
Schools
Centennial Secondary 2	2017		59		2		61		61		-		-		-
Grandview Heights Secondary 2	2021		78		5		83		63		-		-		20
New Westminster Secondary 2	2021		93		14		107		107		-		-		-
Handsworth Secondary 2	2022		66		3		69		69		-		-		-
Pexsisen Elementary and Centre Mountain Lellum Middle 2	2022		88		1		89		89		-		-		-
Quesnel Junior School 2	2022		46		6		52		52		-		-		-
Stitó:s Lá:lém totí:lt Elementary Middle School 2	2022		52		2		54		49		-		-		5
Coast Salish Elementary 3	2023		22		21		43		38		-		-		5
Burnaby North Secondary	2024		94		14		108		99						9
Cowichan Secondary	2024		38		48		86		84		-		-		2
Eric Hamber Secondary	2024		66		40		106		94		-		-		12
Victoria High School	2024		80		20		100		97		-		-		3
North East Latimer Elementary	2025		-		52		52		52		-		-		-
Burke Mountain Secondary	2026		4		156		160		135		-		-		25
Carson Elementary	2026		-		61		61		61		-		-		-
New East Side Elementary	2026		-		59		59		59		-		-		-
New Cloverley Elementary	2026		-		64		64		61		-		-		3
Pineview Valley Elementary	2026		-		65		65		65		-		-		-
George Pringle Secondary (formerly Westside Secondary)	2027		7		99		106		103		-		-		3
La Vallée (Pemberton) Elementary	2027		-		66		66		66		-		-		-
Prince Rupert Middle	2027		-		127		127		127		-		-		-
Guildford Park Secondary	2028		-		65		65		60		-		-		5
Tamanawis Secondary	2028		-		57		57		52		-		-		5
Seismic mitigation program 4	2030		1,390		636		2,026		2,026		-		-		-
Total schools			2,183		1,683		3,866		3,769		-		-		97
Post-secondary institutions
Simon Fraser University - Student Housing 2	2023		108		-		108		73		-		-		35
University of Victoria – Student Housing	2023		200		36		236		128		-		-		108
Capilano University
– New Squamish Campus	2023		63		-		63		48		-		-		15
Okanagan College – Student Housing	2024		16		59		75		74		-		-		1
Capilano University – Student Housing	2024		6		52		58		41		-		-		17
Royal Roads University - West Shore Learning Centre	2024		33		73		106		80		-		-		26
British Columbia Institute of Technology – Student Housing	2025		27		93		120		108		-		-		12
North Island College – Student Housing	2025		5		73		78		76		-		-		2
The University of British Columbia
– School of Biomedical Engineering	2025		35		104		139		25		-		-		114
University of the Fraser Valley – Student Housing	2025		-		75		75		63		-		-		12
University of Victoria
– Engineering and Computer Science Building Expansion	2026		5		128		133		97		-		-		36
Vancouver Island University – Student Housing and Dining	2026		-		88		88		87		-		-		1
British Columbia Institute of Technology
– Trades and Technology Complex	2027		1		177		178		152		-		-		26
Douglas College – Academic and Student Housing	2027		4		289		293		203		-		-		90
Vancouver Community College
– Centre for Clean Energy & Automotive Innovation	2027		-		291		291		271		-		-		20
Total post-secondary institutions			503		1,538		2,041		1,526		-		-		515

 

24   | First Quarterly Report 2023/24

Updated 2023/24 Financial Forecast

Table 1.12 Capital Expenditure Projects Greater Than $50 million ¹
Note: Information in bold type denotes changes from Budget 2023 released on February 28, 2023.

($ millions)	Year of Completion	Project Cost to Jun. 30, 2023		Estimated Cost to Complete		Anticipated Total Cost		Internal/ Borrowing		P3 Liability		Federal Gov’t		Other Contrib’ns
Health facilities
Royal Columbian Hospital Redevelopment – Phase 1 2	2020		247		4		251		242		-		-		9
Red Fish Healing Centre for Mental Health and Addiction - θəqiʔ ɫəwʔənəq leləm 2	2021		129		2		131		131		-		-		-
Vancouver General Hospital – Operating Rooms
Renewal – Phase 1 2	2021		101		1		102		35		-		-		67
Peace Arch Hospital Renewal 2	2022		86		1		87		8		-		-		79
Penticton Regional Hospital Patient Care Tower 2
– Direct procurement	2022		65		11		76		18		-		-		58
– P3 contract	2019		232		-		232		-		139		-		93
Dogwood Lodge Long-Term Care Home Replacement	2023		56		9		65		-		-		-		65
Lions Gate Hospital – New Acute Care Facility	2024		146		164		310		144		-		-		166
Nanaimo Regional General Hospital – ICU/HAU Redevelopment	2024		31		29		60		22		-		-		38
Stuart Lake Hospital Replacement	2024		61		97		158		140		-		-		18
Clinical and Systems Transformation	2025		726		73		799		702		-		-		97
iHealth Project – Vancouver Island Health Authority	2025		133		22		155		55		-		-		100
Mills Memorial Hospital Replacement	2026		421		212		633		513		-		-		120
Royal Columbian Hospital Redevelopment Phases 2 & 3 5	2026		487		757		1,244		1,182		-		-		62
Abbotsford Long-Term Care	2027		-		211		211		157		-		-		54
Burnaby Hospital Redevelopment - Phase 1	2027		68		615		683		633		-		-		50
Campbell River Long-Term Care	2027		-		134		134		80		-		-		54
Cowichan District Hospital Replacement	2027		92		1,354		1,446		1,148		-		-		298
Dawson Creek and District Hospital Replacement	2027		23		567		590		413		-		-		177
Delta Long-Term Care	2027		-		180		180		162		-		-		18
New St Paul’s Hospital	2027		606		1,574		2,180		1,327		-		-		853
New Surrey Hospital and BC Cancer Centre	2027		9		1,715		1,724		1,664		-		-		60
Richmond Long-Term Care	2027		-		178		178		178		-		-		-
Royal Inland Hospital Phil and Jennie Gaglardi Tower
– Direct procurement	2027		62		67		129		39		-		-		90
– P3 contract	2022		288		-		288		-		164		-		124
Western Communities Long-Term Care	2027		-		224		224		157		-		-		67
Centre for Children and Youth Living with Health Complexity	2028		3		219		222		193		-		-		29
St. Vincent’s Heather Long-Term Care	2028		1		206		207		207		-		-		-
Cariboo Memorial Hospital Redevelopment	2029		25		342		367		257		-		-		110
FW Green Long-Term Care	2029		-		156		156		94		-		-		62
Vancouver General Hospital –
Operating Rooms Renewal – Phase 2	2029		10		322		332		312		-		-		20
Burnaby Hospital Redevelopment Phase 2 and BC Cancer Centre	2030		-		1,731		1,731		1,703		-		-		28
Richmond Hospital Redevelopment 6	2031		5		856		861		791		-		-		70
Total health facilities			4,113		12,033		16,146		12,707		303		-		3,136

 

First Quarterly Report 2023/24 |   25

Updated 2023/24 Financial Forecast

Table 1.12 Capital Expenditure Projects Greater Than $50 million ¹
Note: Information in bold type denotes changes from Budget 2023 released on February 28, 2023.

($ millions)	Year of Completion	Project Cost to Jun. 30, 2023		Estimated Cost to Complete		Anticipated Total Cost		Internal/ Borrowing		P3 Liability		Federal Gov’t		Other Contrib’ns
Transportation
Highway 91 Alex Fraser Bridge Capacity Improvements 2	2019		67		3		70		37		-		33		-
Highway 1 Illecillewaet Four-Laning and Brake Check improvements 2	2021		74		1		75		59		-		16		-
Highway 99 10-Mile Slide 2	2021		75		9		84		84		-		-		-
Highway 4 Kennedy Hill Safety Improvements2	2022		54		-		54		40		-		14		-
Highway 14 Corridor improvements	2023		66		11		77		48		-		29		-
Highway 1 Chase Four-Laning	2023		99		97		196		184		-		12		-
Highway 1 Salmon Arm West	2023		88		52		140		109		-		31		-
Highway 91 to Highway 17 and Deltaport Way Corridor improvements	2023		241		19		260		87		-		82		91
Kootenay Lake ferry service upgrade	2023		51		34		85		68		-		17		-
West Fraser Road Realignment	2023		62		41		103		103		-		-		-
Highway 1 Quartz Creek Bridge Replacement	2024		61		58		119		69		-		50		-
Highway 1 Ford Road to Tappen Valley Road Four-Laning	2024		43		200		243		161		-		82		-
Highway 1 Kicking Horse Canyon Phase 4 7	2024		495		106		601		386		-		215		-
Pattullo Bridge Replacement 8	2024		722		655		1,377		1,076		301		-		-
Highway 5 Corridor	2024		141		209		350		350		-		-		-
Highway 1 Corridor - Falls Creek	2024		3		140		143		143		-		-		-
BC Transit Victoria HandyDART Facility	2025		24		60		84		41		-		21		22
Highway 1 216th - 264th Street widening	2025		59		286		345		226		-		96		23
Highway 7 Widening - 266th St to 287th St.	2025		34		72		106		77		-		29		-
Highway 99 / Steveston Interchange, Transit & Cycling Improvements 9	2025		39		98		137		137		-		-		-
Highway 17 Keating Cross Overpass	2025		12		65		77		58		-		17		2
Broadway Subway 10	2026		1,185		1,642		2,827		1,380		450		897		100
Blackwater North Fraser Slide	2026		-		203		203		203		-		-		-
Cottonwood Hill at Highway 97 Slide	2026		-		335		335		335		-		-		-
Highway 1 Selkirk	2026		5		124		129		97		-		32		-
Highway 1 Jumping Creek to MacDonald	2027		10		235		245		199		-		46		-
Highway 1 Goldstream Safety Improvements	2027		12		150		162		162		-				-
Belleville Terminal Replacement	2027		3		301		304		262		-		42		-
Highway 1 R.W. Bruhn Bridge	2027		36		219		255		164		-		91		-
Surrey Langley SkyTrain Project 11	2028		98		3,912		4,010		2,476		-		1,306		228
Fraser River Tunnel Project 9, 12	2030		58		4,090		4,148		4,148		-		-		-
Total transportation			3,917		13,427		17,344		12,969		751		3,158		466
Housing
Stanley New Fountain 2	2023		77		1		78		9		-		-		69
13583 81st Ave	2023		46		4		50		37		-		-		13
Crosstown	2024		41		31		72		61		-		-		11
58 W Hastings	2024		39		119		158		67		-		19		72
1015 Hastings St. Development	2025		14		137		151		110		-		22		19
128 to 134 East Cordova St.	2025		10		156		166		36		-		27		103
320 Hastings St. E. Redevelopment	2025		-		86		86		49		-		5		32
Clark & 1st Ave	2026		7		102		109		75		-		-		34
Total housing			234		636		870		444		-		73		353
Other taxpayer-supported
Nanaimo Correctional Centre Replacement	2024		124		57		181		181		-		-		-
Royal BC Museum –
Collections and Research Building	2025		31		239		270		270		-		-		-
Total other taxpayer-supported			155		296		451		451		-		-		-
Total taxpayer-supported			11,105		29,613		40,718		31,866		1,054		3,231		4,567

 

26   | First Quarterly Report 2023/24

Updated 2023/24 Financial Forecast

Table 1.12 Capital Expenditure Projects Greater Than $50 million ¹
Note: Information in bold type denotes changes from Budget 2023 released on February 28, 2023.

($ millions)	Year of Completion	Project Cost to Jun. 30, 2023		Estimated Cost to Complete		Anticipated Total Cost		Internal/ Borrowing		P3 Liability		Federal Gov’t		Other Contrib’ns
Power generation and transmission
BC Hydro
–UBC load increase stage 2 project 2	2020		53		-		53		53		-		-		-
–Bridge River 2 upgrade units 7 and 8 project 2	2021		74		1		75		75		-		-		-
–LNG Canada load interconnection project 2	2021		81		1		82		58		-		-		24
–Peace Region Electricity Supply (PRES) project 2, 13	2021		218		1		219		219		-		TBD		-
–Mica replace units 1 to 4 generator transformers project 2	2022		76		13		89		89		-		-		-
–Mount Lehman substation upgrade project 2	2023		55		-		55		55		-		-		-
– G.M. Shrum G1 to 10 control system upgrade	2023		69		6		75		75		-		-		-
– 5L063 Telkwa relocation project	2023		47		19		66		66		-		-		-
– Lake Buntzen 1 Coquitlam Tunnel Gates Refurbishment project	2023		46		21		67		67		-		-		-
– Street light replacement program	2023		56		19		75		75		-		-		-
– Various Sites - NERC Critical Infrastructure Protection implementation project for cyber assets	2023		44		16		60		60		-		-		-
– Wahleach refurbish generator project	2023		52		12		64		64		-		-		-
– Capilano substation upgrade project	2024		61		26		87		87		-		-		-
– Mica modernize controls project	2024		48		8		56		56		-		-		-
– Vancouver Island radio system project	2024		42		11		53		53		-		-		-
– Natal - 60-138 kV switchyard upgrade project	2025		29		55		84		84		-		-		-
–Site C project 14	2025		11,669		4,331		16,000		16,000		-		-		-
– Sperling substation metalclad switchgear replacement project	2026		37		39		76		76		-		-		-
– Treaty Creek Terminal - Transmission Load Interconnection (KSM) project	2026		29		80		109		72		-		-		37
– Mainwaring station upgrade project	2026		14		140		154		154		-		-		-
–Kootenay Canal modernize controls project	2028		4		57		61		61		-		-		-
–Peace to Kelly Lake stations sustainment project	2028		25		319		344		344		-		-		-
–John Hart dam seismic upgrade project	2029		89		824		913		913		-		-		-
–Bridge River 1 replace units 1-4 generators / governors project	2030		14		299		313		313		-		-		-
Total power generation and transmission			12,932		6,298		19,230		19,169		-		-		61
Total self-supported			12,932		6,298		19,230		19,169		-		-		61
Total $50 million projects			24,037		35,911		59,948		51,035		1,054		3,231		4,628

¹ Only projects that receive provincial funding and have been approved by Treasury Board and/or Crown corporation boards are included in this table. Ministry service plans may highlight projects that still require final approval. Capital costs reflect current government accounting policy.

² Assets have been put into service and only trailing costs remain.

³ The anticipated total cost was previously reported as $52 million and has been reduced to $43 million to reflect current estimates.

⁴ The Seismic Mitigation Program consists of all spending to date on Phase 2 of the program and may include spending on projects greater than $50 million included in the table above.

⁵ The Royal Columbian Hospital new acute care tower is expected to be available to patients in 2025.

⁶ The Richmond Hospital new acute care tower is expected to be available to patients in 2028.

⁷ Kicking Horse Canyon Project costs exclude $11 million of past planning costs which are expensed.

⁸ Pattullo Bridge forecasted to open to the public in 2024 with old bridge decommissioning to follow. Forecasted amount reflects total expenditures including capitalized and expensed items.

⁹ Project is part of the Highway 99 Tunnel Program.

¹⁰ The Broadway Subway Project forecast and value of costs incurred to date include the City of Vancouver in-kind contribution of land rights, in keeping with the approved project budget. Under current government accounting, purchased intangible assets are given accounting recognition, and contributed intangible assets, such as land use rights or licenses are not.

¹¹ Total project cost includes $3.939 billion capital costs and $0.071 billion operating costs.

¹² The Fraser River Tunnel is forecasted to open to the public in 2030 with the removal of the existing tunnel to follow.

¹³ The total cost represents the gross cost of the project and has not been netted for Federal Government contributions. The Federal Government’s contribution amount is dependent on the final actual project costs and what costs are eligible under the agreement.

¹⁴ The approved updated project cost estimate is $16 billion, with a project in-service date of 2025 (first and last generating unit in-service in December 2024 and 2025, respectively). The anticipated project cost and cost to date include capital costs, charges subject to regulatory deferral and certain operating expenditures.

First Quarterly Report 2023/24 |   27

Updated 2023/24 Financial Forecast

Table 1.13 2023/24 Provincial Debt ¹

	Year-to-Date to June 30					Full Year
	2023/24				Actual	2023/24				Actual
($ millions)	Budget	Actual	Variance		2022/23	Budget	Forecast	Variance		2022/23
Taxpayer-supported debt
Provincial government
Operating	-	-	-		4,710	2,440	1,871	(569	)	-
Capital 2	37,817	37,366	(451	)	36,801	44,089	40,739	(3,350	)	36,538
Total provincial government	37,817	37,366	(451	)	41,511	46,529	42,610	(3,919	)	36,538
Taxpayer-supported entities
BC Transportation Financing Authority	19,570	19,570	-		17,623	23,171	22,930	(241	)	18,992
Health authorities and hospital societies	2,147	2,047	(100	)	1,833	2,381	2,380	(1	)	1,983
Post-secondary institutions	909	909	-		924	952	944	(8	)	910
Social housing 3	1,244	1,044	(200	)	1,190	2,227	1,566	(661	)	1,241
Other	294	297	3		171	357	342	(15	)	270
Total taxpayer-supported entities	24,164	23,867	(297	)	21,741	29,088	28,162	(926	)	23,396
Total taxpayer-supported debt	61,981	61,233	(748	)	63,252	75,617	70,772	(4,845	)	59,934
Self-supported debt	30,339	30,347	8		28,795	31,607	31,562	(45	)	29,492
Total debt before forecast allowance	92,320	91,580	(740	)	92,047	107,224	102,334	(4,890	)	89,426
Forecast allowance	-	-	-		-	700	700	-		-
Total provincial debt	92,320	91,580	(740	)	92,047	107,924	103,034	(4,890	)	89,426

¹ Provincial debt is prepared in accordance with Generally Accepted Accounting Principles and presented consistent with the Debt Summary Report included in the Public Accounts . Debt is shown net of sinking funds and unamortized discounts, excludes accrued interest, and includes non-guaranteed debt directly incurred by commercial Crown corporations and debt guaranteed by the Province.

² Includes debt incurred by the government to fund the building of capital assets in the education, health, social housing and other sectors.

³ Includes debt incurred by BC Housing Management Commission and the Provincial Rental Housing Corporation to fund investments in affordable housing through HousingHub. The debt forecast reflects projects that have been approved as of June 2023.

28   | First Quarterly Report 2023/24

Updated 2023/24 Financial Forecast

Table 1.14 2023/24 Statement of Financial Position

($ millions)	Actual March 31, 2023			Year-to-Date June 30, 2023			Forecast March 31, 2024
Financial assets:
Cash and temporary investments		8,247			6,310			2,961
Other financial assets		19,077			19,398			16,492
Sinking funds		521			531			485
Investments in commercial Crown corporations:
Retained earnings		12,634			13,086			13,349
Recoverable capital loans		28,145			29,001			30,147
Total investments in commercial Crown corporations		40,779			42,087			43,496
Total financial assets		68,624			68,326			63,434
Liabilities:
Accounts payable, accrued liabilities and others		25,402			21,045			22,305
Deferred revenue		15,005			15,081			16,068
Debt:
Taxpayer-supported debt		59,934			61,233			70,772
Self-supported debt		29,492			30,347			31,562
Forecast allowance		-			-			700
Total provincial debt		89,426			91,580			103,034
Add: debt offset by sinking funds		521			531			485
Add: foreign exchange adjustments		472			326			-
Less : guarantees and non-guaranteed debt		(1,523	)		(1,897	)		(1,415	)
Financial statement debt		88,896			90,540			102,104
Total liabilities		129,303			126,666			140,477
Net liabilities		(60,679	)		(58,340	)		(77,043	)
Capital and other non-financial assets:
Tangible capital assets		59,811			60,503			69,032
Other non-financial assets		3,571			3,726			4,040
Total capital and other non-financial assets		63,382			64,229			73,072
Accumulated surplus (deficit)		2,703			5,889			(3,971	)

Changes in Financial Position

($ millions)	Year-to-Date June 30, 2023			Forecast March 31, 2024
Deficit (Surplus) for the period		(2,324	)		6,674
Change in remeasurement (gains) losses and other adjustments		(862	)		-
Decrease/(Increase) in accumulated surplus/deficit		(3,186	)		6,674
Capital and other non-financial asset changes:
Taxpayer-supported capital investments		1,360			12,180
Less: amortization and other accounting changes		(668	)		(2,959	)
Increase in net capital assets		692			9,221
Increase (decrease) in other non-financial assets		155			469
Increase in capital and other non-financial assets		847			9,690
Increase (decrease) in net liabilities		(2,339	)		16,364
Investment and working capital changes:
Investment in commercial Crown corporations:
Decrease in retained earnings		452			715
Self-supported capital investments		1,121			4,073
Less: loan repayments and other accounting changes		(265	)		(2,071	)
Increase/(decrease) in investment in commercial Crown corporations		1,308			2,717
Decrease in cash and temporary investments		(1,937	)		(5,286	)
Increase in other working capital		4,612			(587	)
Increase in Investment and working capital		3,983			(3,156	)
Increase in financial statement debt		1,644			13,208
Changes in sinking fund debt and foreign exchange adjustments		136			508
Decrease in guarantees and non-guaranteed debt		374			(108	)
Increase in total provincial debt		2,154			13,608

First Quarterly Report 2023/24 |   29

 PART 2 | ECONOMIC REVIEW AND OUTLOOK ¹

Summary

B.C.’s economy continues to be resilient, despite the higher-than-expected interest rate environment. Employment has posted modest gains, while strong population growth has helped to reduce job vacancies and support consumer spending. Housing markets are adjusting to higher interest rates, with increased home sales activity in recent months and robust new home construction. However, merchandise exports declined in the first half of 2023 reflecting weaker demand from B.C.’s trading partners and lower prices for key commodities compared to the first half of 2022.

Inflation has fallen from the high rates seen last year but prices remain elevated, particularly for food and shelter. Persistent price pressures and economic strength have led to interest rates rising higher than anticipated around the world, which are expected to weigh on domestic and external demand. While the significant uncertainty around COVID-19 disruptions has subsided compared to recent years, B.C.’s economy faces headwinds including the potential impacts of commodity price volatility, extreme weather events, and lingering supply-chain and labour disruptions amid a weaker global outlook.

The Ministry of Finance (Ministry) estimates that B.C.’s economy grew by 3.3 per cent in 2022. The Ministry forecasts economic growth to be 1.2 per cent in 2023 and then slow to 0.8 per cent growth in 2024 as the cumulative effect of higher interest rates works its way through the broader economy. As Chart 2.1 shows, the Ministry’s outlook for B.C. real GDP is within the range of private sector forecasters in 2023 and 2024. Ministry of Finance analysis suggests that the province’s economic growth will be stronger than the current average private sector outlook in both years. The Ministry will continue to monitor trends to assess and update the economic outlook. Over the medium-term (2025 to 2027), the Ministry expects B.C.’s economic growth to range between 2.2 per cent and 2.4 per cent annually.

Chart 2.1  Ministry’s Outlook for B.C. Compared to Private Sector

 

Sources: B.C. Ministry of Finance; Private Sector range (low/average/high of Economic Forecast Council subset consisting of BMO, CIBC, National Bank, RBC, Scotiabank and TD).

¹ Reflects data available as of August 23, 2023, unless otherwise indicated.

First Quarterly Report 2023/24 | 31

Economic Review and Outlook

The main downside risks to B.C.’s outlook include persistent price pressures leading to higher than anticipated interest rates for longer and weaker global demand. Other risks include climate change impacts, housing affordability, and volatility in commodity and financial markets.

British Columbia Economic Activity and Outlook

B.C.’s economy has been more resilient to the impact of higher interest rates than expected. However, rates have risen further than anticipated, which is weighing on the outlook for next year. Steady economic activity is expected to support modest real GDP growth in B.C. this year as the cumulative effects of higher interest rates and elevated inflation soften domestic and global demand. The Ministry’s forecast for B.C. real GDP growth in 2023 has been revised up to 1.2 per cent from the Budget 2023 forecast of 0.4 per cent. The forecast for 2024 has been lowered to 0.8 per cent from 1.5 per cent. This revision largely reflects weaker exports and the impact of higher interest rates over a longer than expected period. Nominal GDP growth for 2023 has been revised up slightly to 2.9 per cent from 2.8 per cent, and in 2024 down to 3.3 per cent from 3.7 per cent.

Table 2.1 British Columbia Economic Indicators

	First Quarter	Second Quarter	Year-to-date
All data seasonally adjusted, per cent change	Jan. to Mar. 2023 change from Oct. to Dec. 2022	Apr. to Jun. 2023 change from Jan. to Mar. 2023	Jan. to Jun. 2023 change from Jan. to Jun. 2022
Employment	+0.6	+0.2	+1.4
Manufacturing shipments	-3.7	-0.9	-7.7
Exports	+2.0	-5.7	-14.2
Retail sales	-1.0	+2.5	+1.0
Consumer price index 1	+5.7	+3.7	+4.7
Housing starts	+1.2	+3.2	+19.7
Residential sales units	+0.8	+33.7	-25.0
Residential average sale price	-1.8	+9.3	-7.5
Non-residential building permits	+18.1	-15.2	-10.5

¹ Quarterly calculations for CPI are year-over-year, e.g. First Quarter is Jan. to Mar. 2023 change from Jan. to Mar. 2022

In the near-term, B.C.’s labour market is expected to see modest employment gains, supported by strong population growth. An up-tick in the unemployment rate from the historically low levels seen in 2022 is expected before trending down over the forecast horizon. Construction activity is expected to continue at high levels, supported by public sector investment. Consumer spending is forecast to ease as higher interest rates and elevated prices limit consumers’ purchasing power. Inflation is forecast to average 3.9 per cent in 2023 and 2.5 per cent in 2024. On the trade front, weaker global demand and lower prices for key commodities are expected to weigh on exports.

Real GDP growth over the 2025 to 2027 period is relatively unchanged from the Budget 2023 forecast. Over this period, inflation is expected to normalize and interest rates are expected to stabilize.

32 | First Quarterly Report 2023/24

Economic Review and Outlook

Labour Market

B.C.’s labour market growth has eased in 2023 from the rapid pace associated with the pandemic recovery. Overall, employment grew by 1.3 per cent year-to-date to July 2023 compared to the same period last year. Full-time employment increased by nearly 47,000 jobs and part-time employment decreased by about 11,000 jobs on a year-to-date basis. During this period, the number of jobs created was balanced between the public sector (+21,314 jobs) and self-employment (+19,443 jobs), while private sector jobs declined (-4,757 jobs).

On an industry basis, year-to-date employment gains were concentrated in the services sector (+37,643 jobs), led by educational services (+17,743 jobs); accommodation and food services (+14,943 jobs); and finance, insurance, real estate, and leasing (+10,729 jobs). Meanwhile, the largest service-sector declines were in transportation and warehousing (-7,514 jobs) and health care and social assistance (-4,557 jobs) compared to the first seven months of 2022. During this period, employment in the goods sector edged down (-1,643 jobs), where growth in construction (+11,886 jobs), agriculture (+2,829 jobs) and utilities (+1,014 jobs) was offset by declines in manufacturing (-16,571 jobs) and forestry, fishing, mining, oil, and gas (-757 jobs).

Employment among women accounted for the majority of growth in the labour market so far this year. Women represented 48.4 per cent of B.C.’s labour force and filled 80.8 per cent of the 46,986 new full-time jobs created in the first seven months of 2023. While total employment increased by 1.3 per cent during this period, employment among women grew by 2.1 per cent, outpacing employment growth among men at 0.6 per cent.

Chart 2.2  B.C. Employment

Sources: Statistics Canada (Labour Force Survey); Haver Analytics

The provincial unemployment rate has increased from the historical lows seen in 2022 as labour force growth has outpaced job gains. B.C.’s unemployment rate reached 5.4 per cent in July 2023 and averaged 5.0 per cent year-to-date, 0.2 percentage points below the national average. Meanwhile, job vacancies in the province have steadily declined since peaking in mid-2022 but remain elevated relative to pre-pandemic levels.

First Quarterly Report 2023/24 | 33

Economic Review and Outlook

The size of B.C.’s labour force increased by 1.6 per cent year-to-date to July 2023, supported by strong population growth. Meanwhile, the province’s labour force participation rate averaged 65.1 per cent, 0.1 percentage points lower than the first seven months of 2022. While the prime-age (25-54 years) labour force participation rate has surpassed its pre-pandemic five-year average, the participation rate among the 55+ years age group has fallen. An aging population poses a challenge for labour markets across the country.

Employee compensation (aggregate wages, salaries, and employers’ social contributions) in B.C. increased by 5.8 per cent year-to-date to March 2023 compared to the same period of 2022. So far this year, the average hourly wage rate rose by 6.0 per cent compared to the first seven months of 2022. On average, wages grew faster than the consumer price index for B.C., which increased by 4.4 per cent over the same period.

Outlook

The outlook for B.C.’s labour market remains stable but faces headwinds next year amid slower domestic and global economic activity. The Ministry forecasts employment in B.C. to increase by 1.1 per cent in 2023 (approximately +30,200 jobs), followed by annual growth of 0.8 per cent in 2024 (approximately +22,000 jobs). Over the medium-term, employment growth is forecast to average 1.3 per cent annually.

In the near-term, the province’s unemployment rate is expected to average 5.4 per cent in 2023 and 5.9 per cent in 2024 reflecting solid labour force growth and a broader slowdown in economic activity. Then B.C.’s unemployment rate is forecast to trend down over the medium-term to 5.1 per cent in 2027.

Consumer Spending and Inflation

Consumer spending has moderated from the strong growth observed in the past two years as the pandemic rebound has faded. Year-to-date to June, B.C. nominal retail sales rose by 1.0 per cent, tempered by higher interest rates and elevated inflation. Meanwhile, consumer prices rose by 4.4 per cent over a similar period, indicating a lower volume of sales. Year-to-date sales gains were led by increased spending at food and beverage stores (+5.8 per cent); clothing, accessories and related retailers (+15.7 per cent); and general merchandise stores (+6.4 per cent). Declines in spending were led by lower sales at building material and garden equipment and supplies dealers (-15.7 per cent) and gasoline stations (-8.7 per cent) compared to the first six months of 2022.

Sales at food services and drinking places in B.C., a component of the service sector, rose by 15.4 per cent year-to-date to May 2023 compared to the same period last year, partly due to higher prices.

Consumer sentiment has weakened amid higher interest rates and elevated inflation. The Conference Board of Canada’s consumer confidence index for B.C. averaged 79.0 points in the first eight months of 2023, 28.6 points lower than the same period of 2022. Similarly, the Bank of Canada’s latest Canadian Survey of Consumer Expectations (conducted in May 2023 before the Bank resumed hiking interest rates in June) cited high interest rates and increased living expenses across a broad range of goods and services as key concerns for Canadian consumers.

34 | First Quarterly Report 2023/24

Economic Review and Outlook

Chart 2.3  B.C. Retail Sales

 

Sources: Statistics Canada; Haver Analytics

Inflation has eased since peaking at 8.1 per cent in May 2022 to reach 3.0 per cent in July 2023. The slower pace partly reflects lower energy prices compared to the high prices for commodities seen in 2022 amid global supply uncertainty following Russia’s invasion of Ukraine. Despite slowing, inflation in the province and globally has not returned to the target levels observed prior to the sharp rise in 2021 and 2022. B.C.’s consumer price index averaged 4.4 per cent in the first seven months of 2023. During this period, price growth was led by shelter (+5.4 per cent) and food (+8.2 per cent). This reflects higher owned and rented accommodation costs, as well as higher prices for food purchased at both stores and restaurants. In the Bank of Canada’s (BoC) Monetary Policy Statement on July 12, 2023, the BoC forecast Canadian inflation to hover around 3 per cent before gradually slowing toward the 2 per cent target by mid-2025.

Chart 2.4  B.C. Inflation

 

Sources: Statistics Canada; Haver Analytics 

First Quarterly Report 2023/24 | 35

Economic Review and Outlook

Outlook

Household consumption is expected to continue to ease in the near-term as the cumulative effects of interest rate hikes and elevated prices reduce consumers’ purchasing power. The Ministry forecasts real household consumption of goods and services to increase by 2.4 per cent in 2023, followed by 2.2 per cent growth in 2024. Then growth is expected to range between 2.3 per cent and 2.6 per cent annually in the 2025 to 2027 period.

The Ministry expects nominal retail sales to grow by 2.4 per cent in 2023 and by 2.5 per cent in 2024, as support from strong population growth is somewhat offset by the cooling effects of higher interest rates and slower income growth. Then over the medium-term, retail sales are expected to average 3.5 per cent growth annually.

While inflation has fallen from the high rates seen last year, price pressures, particularly for food and shelter, are anticipated to persist in the near-term. However, inflation is expected to gradually ease toward the BoC’s target rate of 2 per cent in the medium-term. Overall, consumer price inflation in B.C. is forecast to be 3.9 per cent in 2023, 2.5 per cent in 2024 and 2.2 per cent in 2025. Then inflation is expected to normalize, averaging 2.0 per cent in 2026 and 2027. Annual inflation rates for Canada are expected to be relatively similar to B.C. over the forecast period.

Housing

B.C. housing market activity has picked up in recent months following a decline last year in response to the sharp increase in interest rates. Still, year-to-date to July, MLS home sales decreased by 19.5 per cent compared to the first seven months of 2022. Further, the additional interest rate increases in June and July of 2023 are expected to dampen activity. On a year-to-date basis, sales decreased in every region in B.C., including Greater Vancouver (-21.8 per cent), Fraser Valley (-15.3 per cent), Okanagan-Mainline (-22.6 per cent) and Victoria (-16.8 per cent).

Chart 2.5  Home Sales and Price

 

Sources: Canadian Real Estate Association; Haver Analytics

36 | First Quarterly Report 2023/24

Economic Review and Outlook

Year-to-date to July, the MLS average home sale price was 5.7 per cent below the high levels seen in the same period of 2022. However, the MLS average home sale price has edged up in recent months, partly due to low inventories of homes for sale.

Despite recent gains, MLS composite benchmark house prices (which incorporates benchmark attributes by dwelling type in each region) decreased across many markets in B.C. on a year-to-date basis. Declines were seen in the Fraser Valley (-13.4 per cent), Vancouver Island (-9.7 per cent), Victoria (-8.7 per cent), the Okanagan Valley (-6.7 per cent) and Greater Vancouver (-5.5 per cent) compared to the first seven months of 2022.

Chart 2.6  Greater Vancouver HPI Benchmark Price

 

Sources: Canadian Real Estate Association; Haver Analytics

The impact of rising interest rates on home construction has been muted compared to home sales. Robust homebuilding activity has continued so far this year, up 17.4 per cent year-to-date to July 2023. Averaging 51,312 annualized units in the first seven months of 2023, housing starts remain well above the ten-year historical average of 39,073 units. However, a decline in both the value and number of residential building permits, a leading indicator of home construction, points to the potential for some moderation in homebuilding activity moving forward. Year-to-date to June, the value of single-dwelling permits fell by 20.7 per cent and the value of multiple-dwelling permits fell by 8.3 per cent.

First Quarterly Report 2023/24 | 37

Economic Review and Outlook

Chart 2.7  B.C. Housing Starts

 

Sources: Canada Mortgage and Housing Corporation; Haver Analytics

* Historical average from Jan. 2013 to Dec. 2022

Outlook

The Ministry expects the impact of high interest rates to continue to weigh on housing market activity this year. The Ministry forecasts unit home sales to decrease by 8.5 per cent in 2023 and then increase by 13.5 per cent in 2024. Average home sale prices are expected to decrease by 3.5 per cent in 2023 and then grow by 3.0 per cent in 2024. Over the medium-term, average sales prices are forecast to increase by 2.6 per cent annually on average. Putting unit sales and prices together, the total value of home sales is forecast to decrease by 11.6 per cent in 2023, increase by 16.9 per cent in 2024, and then average 4.2 per cent growth over the 2025 to 2027 period.

The Ministry prudently expects B.C. housing starts to total approximately 46,700 units in 2023, 42,100 units in 2024 and then average around 40,000 units per year over the medium-term, supported by population growth and public sector investment.

Business and Government

Non-residential construction permitting has slowed from the high levels seen in 2022. The total value of non-residential building permits declined by 10.5 per cent year-to-date to June compared to the same period last year. Underlying the decline was lower permit issuance for institutional and governmental buildings (-30.8 per cent) and industrial structures (-22.5 per cent), while permit issuance increased for commercial buildings (+8.8 per cent).

Businesses in B.C. and at the national level have faced challenges with labour shortages and higher wage costs amid tight labour market conditions and high inflation. Year-to-date to July, the Canadian Federation of Independent Business’ 12-month small business confidence index for B.C. was 6.6 points below the same period of 2022. However, in July 2023, the index stood at 54.7 points, above the 50-point threshold, indicating that more small business owners expect stronger performance over the next year.

38 | First Quarterly Report 2023/24

Economic Review and Outlook

B.C.’s tourism sector has moderated, following a rebound in activity throughout 2022. International travelers entering B.C. rose by 107.6 per cent year-to-date to June 2023 compared to the low levels seen in early 2022. However, the number of U.S. and non-U.S. visitors have levelled off in recent months and the 646,050 international travelers entering B.C. in June 2023 remained below the roughly 700,000 visitors seen in an average month prior to the pandemic.

Outlook

The Ministry forecasts total real investment in B.C. to rise by 3.7 per cent in 2023, supported by increases in residential construction and government capital investment. Then total real investment is projected to grow by 2.8 per cent in 2024, and range between 1.9 per cent and 2.2 per cent growth annually over the medium-term.

In the near-term, real business investment is projected to decrease by 1.3 per cent in 2023 and then increase by 1.0 per cent in 2024, reflecting the dampening effects of higher interest rates. Over the 2025 to 2027 period, real business investment growth is expected to range between 2.4 per cent and 2.9 per cent annually.

Real expenditure on goods and services by all levels of government is forecast to rise by 1.1 per cent in 2023 and then decline by 2.8 per cent in 2024 due to the timing and one-time nature of some government expenditures, such as the 2022/23 Supplementary Estimates. In real terms, government expenditures are forecast to be relatively stable over the medium-term.

The Ministry expects nominal net operating surplus of corporations (an approximation of corporate profits) to decrease by 11.8 per cent in 2023 and by 9.1 per cent in 2024 amid slower global economic activity. Then, net operating surplus of corporations is forecast to increase between 1.5 per cent and 4.7 per cent in the 2025 to 2027 period.

External Trade and Commodity Markets

So far this year, weaker global demand and lower prices for key commodities have lowered B.C. merchandise exports. During the first six months of 2023, the value of B.C. goods exports decreased by 14.2 per cent compared to the same period of 2022. Year-to-date declines were broad-based, led by decreases in exports of forestry products and building and packaging materials (-30.2 per cent) and energy products (-17.0 per cent). Meanwhile, exports of electronic and electrical equipment and parts (+17.1 per cent) and industrial machinery, equipment and parts (+16.2 per cent) increased on a year-to-date basis.

Merchandise exports to the U.S. accounted for 54.6 per cent of B.C.’s total goods exports in the first six months of 2023. During this period, goods exports to the U.S. fell by 15.9 per cent, largely due to a decline in forestry products and building and packaging materials (-36.0 per cent). Meanwhile, total goods exports to non-U.S. destinations decreased by 12.1 per cent, led by a drop in energy exports (-17.9 per cent).

First Quarterly Report 2023/24 | 39

Economic Review and Outlook

Chart 2.8  B.C. Exports

 

Source: BC Stats

B.C.’s manufacturing shipments decreased by 7.7 per cent year-to-date to June 2023 compared to the same period of 2022, mainly due to reduced shipments of wood products (-36.8 per cent).

In 2022, the war in Ukraine, persistent supply-chain disruptions and strong demand led to rapid growth in commodity prices. However, prices for some commodities have declined this year reflecting reduced demand in the manufacturing sector amid high interest rates and slower global economic activity. The price of Western spruce-pine-fir (SPF) 2x4 lumber averaged $393 US/000 board feet during the January to July period of 2023, down 61.6 per cent compared to the same period of 2022.

Energy prices have softened amid concerns over a broader global economic slowdown. In the first seven months of 2023, the West Texas Intermediate (WTI) oil price averaged $75.08 per barrel, down 26.1 per cent from the same period of 2022. Similarly, the plant inlet price of natural gas fell 53.2 per cent year-to-date, averaging $1.94 C/GJ in the first seven months of 2023.

Meanwhile, the average metallurgical coal price fell by 34.1 per cent year-to-date to July 2023 compared to the same period of 2022 amid weaker market conditions. Zinc and copper declined by 25.5 per cent and 8.2 per cent, respectively. The price for molybdenum rose 44.6 per cent, while price gains for gold and silver were modest compared to the first seven months of 2022.

Outlook

Real exports of goods and services are forecast to grow by 0.7 per cent in 2023 and decrease by 0.2 per cent in 2024 reflecting lower commodity prices and weaker global demand. Then, real exports of goods and services are expected to grow between 2.8 per cent and 5.6 per cent annually in the 2025 to 2027 period.

40 | First Quarterly Report 2023/24

Economic Review and Outlook

The price of lumber is forecast to average $400 US/000 board feet in 2023 and $450 US/000 board feet in 2024, before levelling off at $500 US/000 board feet over the medium-term. The plant inlet price for natural gas is expected to average $1.29 C/GJ in 2023/24, $2.03 C/GJ in 2024/25, and $2.33 C/GJ in 2025/26.

Demographics

On April 1, 2023, B.C.’s population was 5.44 million people, up 3.1 per cent from the same date in 2022. During the January to March period of 2023, the province welcomed 40,128 net migrants, up 66.6 per cent compared to the same period of 2022 and continuing the strong growth seen in recent quarters. The increase in immigration in the first three months of 2023 reflects higher net international migration (from +21,266 persons to +40,840 persons), which offset a decline in net interprovincial migration (from +2,816 persons to -712 persons) compared to the same period last year.

Outlook

B.C.’s July 1 population is projected to increase by 3.2 per cent in 2023, 2.9 per cent in 2024, and then average 1.7 per cent annual growth over the medium-term.

Total net migration is expected to be about 173,500 persons in 2023 and 118,100 persons in 2024. Looking beyond, total net migration is projected to taper down to around 98,800 persons in 2027. Over the forecast horizon, international migrants are expected to average around 95 per cent of total migrants, which is higher than recent historical levels, reflecting higher federal immigration targets and the entry of more non-permanent residents.

Risks to the Economic Outlook

There are some upside risks to B.C.’s economy, such as inflationary pressures easing sooner than expected and a less pronounced slowing of the global economy. However, risks are weighted to the downside. Downside risks to B.C.’s economic outlook include the following:

· persistent high inflation reducing affordability, and leading to higher interest rates over a longer period;

· uncertainty around the extent of the impact of higher interest rates on consumer and business borrowing, as well as housing markets;

· aging demographics and housing affordability weighing on the supply of labour;

· weaker than expected global economic activity, geopolitical conflict weighing on trade and commodity markets, and broader economic challenges in Europe and Asia;

· severe climate-related events disrupting the lives and livelihoods of British Columbians, destroying productive capital, and impacting economic activity;

· lower prices for B.C.’s major commodity exports, such as lumber, pulp, natural gas, and coal;

· higher volatility in international foreign exchange, stock, and bond markets; and

· timing of investment and hiring related to the LNG Canada project, similar to the risks that exist for other major capital projects.

First Quarterly Report 2023/24 | 41

Economic Review and Outlook

External Outlook

The economic outlook for most of B.C.’s major trading partners has improved for 2023 and worsened for 2024 compared to Budget 2023, reflecting the delayed impact of interest rate increases on global economies. Although global inflation has been easing since the start of 2023, core inflation and specific components, including food prices, have remained elevated. In addition, labour market conditions across numerous countries continue to be tight. While many of B.C.’s major trading partners saw stronger economic activity this year than originally anticipated, the effects of rising interest rates on consumption, investment, and exports, coupled with geopolitical uncertainties, may present economic challenges both later this year and into 2024. As inflation returns to target levels, global economic activity is expected to pick up once again over the medium-term.

United States

The U.S. economy showed resilience in the first half of 2023, despite a restrictive monetary policy environment. U.S. real GDP grew by an annualized rate of 2.4 per cent in the second (April to June) quarter of 2023, following annualized growth of 2.0 per cent in the first (January to March) quarter. The second quarter growth reflected an increase in consumer spending, primarily on services, and gains in non-residential investment. The increases were partially offset by declines in exports and residential investment compared to the first quarter.

Chart 2.9  U.S. Real GDP

 

Sources: U.S. Bureau of Economic Analysis; Haver Analytics

As of July 2023, the U.S. labour market had recorded net payroll job gains for 31 consecutive months. On a year-to-date basis, employment was 4.0 million jobs (+2.7 per cent) above the first seven months of last year. The unemployment rate was 3.5 per cent in July 2023, and was 0.1 percentage points lower on average in the first seven months of 2023 compared to the same period in 2022. Year-to-date to July 2023, the average duration of unemployment was down 14.4 per cent compared to the same period last year and 6.4 per cent lower when compared to the same period in 2019, before the pandemic. However, the U.S. labour force participation rate was 62.6 per cent in July 2023, 0.7 percentage points lower than February 2020, contributing to an already tight labour market.

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U.S. home sales activity rebounded in the first half of 2023 but generally remains below the levels reached in the past several years. Year-to-date to July 2023, existing home sales were 23.5 per cent lower while new single-family home sales were 1.1 per cent higher compared to the same period last year. The median sales price was down on a year-to-date basis for both existing (-0.6 per cent) and new single-family homes (-3.8 per cent). Similarly, U.S. housing starts declined 13.1 per cent in the first seven months of 2023 compared to the same period of 2022, reflecting fewer single-family starts (-18.6 per cent) and multi-family starts (-1.6 per cent). Furthermore, U.S. residential building permits, an indicator of future building activity, declined by 19.1 per cent in the first seven months of 2023 compared to the same period last year.

Chart 2.10  U.S. Housing Starts

 

Sources: U.S. Census Bureau; Haver Analytics

Year-to-date to July 2023, U.S. nominal retail sales were up by 3.3 per cent compared to the first seven months of 2022. However, growth in U.S. retail sales has slowed and was flat in the second quarter of 2023. Furthermore, retail sales (measured in nominal dollars) has been boosted by lingering inflation and estimates of real retail sales growth are negative in the first seven months of 2023 compared to the same period last year.

Following its peak of 9.1 per cent (year-over-year) in June 2022, consumer price inflation in the U.S. declined in 12 of the last 13 months and was 3.2 per cent in July 2023. The downward trend in consumer price inflation in 2023 partly reflects easing demand and lower commodity prices.

The US Conference Board Consumer Confidence Index has improved in recent months, including substantial gains in June and July. Year-to-date to July 2023, U.S. consumer confidence averaged 106.7 points, which was 2.4 points above the same period last year.

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Economic Review and Outlook

Year-to-date to June 2023, the value of U.S. merchandise exports decreased slightly (-0.1 per cent). The decline was led by lower exports of petroleum and natural gas products, which were partly offset by higher pharmaceutical exports.

Outlook

In July 2023, Consensus Economics (Consensus) projected U.S. economic growth of 1.6 per cent in 2023 compared to 0.3 per cent in the January 2023 Consensus survey. Meanwhile for 2024, Consensus forecasts growth of 0.5 per cent.

Table 2.2 U.S. Real GDP Forecast: Consensus versus B.C. Ministry of Finance

	2023		2024
	Per cent change in real GDP
B.C. Ministry of Finance		1.8		0.4
Consensus Economics (July 2023*)		1.6		0.5

* Comparable month to B.C. Ministry of Finance forecast.

The potential for further interest rate increases by the Federal Reserve in the latter half of 2023 is expected to exert pressure on the U.S. economy in the near-term. In addition, geopolitical tensions worldwide and the slowdown of the global economy increases risk for trade and economic growth. Based on these uncertainties, the Ministry assumes that U.S. real GDP will grow by 1.8 per cent in 2023 and by 0.4 per cent in 2024, while averaging 1.8 per cent annually over the 2025 to 2027 period.

Chart 2.11  Consensus Outlook for the U.S. in 2023

Forecast annual per cent change in U.S. real GDP, 2023

 

Source: Consensus Economics

The chart above represents forecasts for U.S. real GDP growth in 2023 as polled on specific dates. For example, forecasters surveyed on January 10, 2022 had an average 2023 U.S. real GDP growth forecast of 2.6 per cent, while on August 7, 2023 they forecast 2023 U.S. real GDP to grow by 1.9 per cent.

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Economic Review and Outlook

Canada

The Canadian economy grew 3.1 per cent (annualized) in the first quarter of 2023, following a decline of 0.1 per cent (annualized) in the fourth (October to December) quarter of 2022. Real GDP growth in the first quarter was driven by gains in consumer spending and net exports. Consumer spending grew by 5.7 per cent compared to the fourth quarter of 2022, driven by increases in durable goods expenditure, particularly for motor vehicles. Exports grew by 10.1 per cent supported by shipments of motor vehicles, precious metals and agricultural goods. However, increases were partially offset by a slowdown in inventory accumulations and lower residential investment, which fell 14.6 per cent (annualized) in the first quarter of 2023.

Chart 2.12  Canadian Real GDP

Canadian real GDP (chained 2012 $ billions, saar)

 

Sources: Statistics Canada; Haver Analytics

After rising by 4.0 per cent in 2022, Canadian employment continued to grow in 2023 but at a slower pace. Year-to-date to July 2023, employment was up by 2.4 per cent compared to the same period last year. The unemployment rate, which had held steady at 5.0 per cent since December 2022, rose from 5.2 per cent in May 2023 to 5.5 per cent in July, partly reflecting labour force increases. Year-to-date to July, the unemployment rate was 0.2 percentage points lower compared to the first seven months of 2022 and averaged 5.2 per cent.

Job vacancies have fallen 11.9 per cent between the first quarter of 2022 and the first quarter of 2023 but remain elevated compared to pre-2020 levels. Year-to-date to July 2023, Canada’s labour force participation rate has remained consistent at 65.6 per cent, slightly above the rate from the same period in 2022. While the participation rate for the prime- age cohort (25-54 years) has been near record highs in 2023 so far, the participation rate among the 55+ years age group is below its pre-pandemic five-year average. The Bank of Canada’s latest Business Outlook Survey released in June 2023 reports that although labour shortages remain a concern for firms, most notably in sectors such as manufacturing, construction, and retail trade, there are signs of improving conditions due to increased labour supply.

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Economic Review and Outlook

Partly due to higher interest rates, Canadian housing market activity continued to weaken in the first quarter of 2023 before posting a modest rebound in the second quarter. Despite the rebound, housing starts were down 8.1 per cent year-to-date to July compared to the same period last year. The decline so far in 2023 was primarily driven by slower construction in urban centers of Montreal and Edmonton but was partially offset by growth in Toronto and Vancouver. Canadian MLS home sales increased by 17.0 per cent in the second quarter of 2023; however, due to declines earlier in the year, they were down by 20.0 per cent year-to-date to July. The national average home sale price declined by 6.5 per cent year-to-date to July 2023.

Canadian nominal retail sales were up 2.2 per cent year-to-date to June compared to the same period last year, partly driven by stronger sales at motor vehicle and parts dealers. On a volume basis, Canadian retail sales were up 1.4 per cent year-to-date to June.

Driven in part by rising interest rates and falling energy prices, consumer price inflation in Canada has decelerated in 2023. Year-over-year, national inflation declined to 3.3 per cent in July 2023 (compared to the 8.1 per cent peak in June 2022), which is still above the Bank of Canada’s target range. In July, food (+7.8 per cent, year-over-year) and shelter (+5.1 per cent, year-over-year) prices added the most upward pressure on national inflation.

After rising 24.9 per cent in 2022, Canadian merchandise exports declined in the first half of 2023 as commodity prices decreased. Year-to-date to June, the value of Canadian merchandise exports declined by 1.0 per cent compared to the same period in 2022, led by lower exports of energy products (-18.0 per cent), and forestry products and building and packaging materials (-20.1 per cent). Services exports were up 12.9 per cent on a year-to-date basis led by the continued recovery of travel services.

Outlook

The July 2023 Consensus forecasts Canadian real GDP to rise by 1.4 per cent in 2023 (1.0 percentage points higher than the January 2023 survey) and by 0.9 per cent in 2024.

Table 2.3 Canadian Real GDP Forecast: Consensus versus B.C. Ministry of Finance

	2023		2024
	Per cent change in real GDP
B.C. Ministry of Finance		1.4		0.8
Consensus Economics (July 2023*)		1.4		0.9

* Comparable month to B.C. Ministry of Finance forecast.

The impact of higher interest rates on household spending and business investment, along with weaker exports attributed to global economic activity, could create headwinds for the Canadian economy. The Ministry assumes that the Canadian economy will grow by 1.4 per cent in 2023, 0.8 per cent in 2024 and then average 1.9 per cent annual growth over the 2025 to 2027 period.

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Chart 2.13  Consensus Outlook for Canada in 2023

Forecast annual per cent change in Canadian real GDP, 2023

  

Source: Consensus Economics

The chart above represents forecasts for Canadian real GDP growth in 2023 as polled on specific dates. For example, forecasters surveyed on January 10, 2022 had an average 2023 Canadian real GDP growth forecast of 3.0 per cent, while on August 7, 2023 they forecast 2023 Canadian real GDP to grow by 1.5 per cent.

Asia

China’s economy witnessed a robust recovery in the first quarter of 2023, marked by the lifting of pandemic restrictions, leading to real GDP growing at an annualized rate of 12.0 per cent. However, real GDP in the second quarter declined by an annualized rate of 1.7 per cent. The underperformance of China’s economy in the second quarter reflected several factors, including a rising youth unemployment rate, a weak housing market, and weaker exports due to waning global demand. China’s consumer price inflation rate has been below 2 per cent since February 2023 and turned negative in July. The People’s Bank of China reduced its main benchmark lending rates in both June and August to stimulate demand.

Japan’s economy grew at an annualized rate of 6.0 per cent in the second quarter of 2023, following an increase of 3.7 per cent in the first quarter. Growth in the second quarter was supported by exports, particularly for vehicles and tourism, as well as residential construction. Meanwhile, consumption declined as the fall in the value of the Yen increased import prices. In July, the Bank of Japan adjusted its yield curve control policy, allowing long-term interest rates to rise.

Outlook

The July 2023 Consensus forecasted that China’s real GDP will grow by 5.5 per cent in 2023 and 4.8 per cent in 2024. However, worsening geopolitical tensions, continued weakness in the property market and a slowdown in external demand could present headwinds for China’s economic growth. The Ministry prudently forecasts that China’s economy will expand by 5.3 per cent in 2023, 4.6 per cent in 2024, and average 4.4 per cent annual growth over the 2025 to 2027 period.

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Economic Review and Outlook

The July 2023 Consensus expected Japan real GDP growth of 1.2 per cent in 2023 and 1.0 per cent in 2024. In recognition of downside risks, the Ministry assumes a more moderate pace of growth in Japan’s real GDP. The Ministry forecasts economic activity to rise by 1.0 per cent in 2023 and 0.8 per cent in 2024, and average 0.5 per cent annual growth over the 2025 to 2027 period.

Europe

Economic activity in the euro zone in 2023 has been dampened by elevated inflation and rising interest rates. However, growth improved in the second quarter as annualized real GDP in the euro zone increased by 1.0 per cent, following a 0.1 per cent increase in the first quarter. On a year-to-date basis through the second quarter of 2023 compared to the same period last year, Spain, France, and Italy contributed to euro zone economic growth while Germany’s economy contracted.

Despite headline inflation easing to 5.3 per cent year-over-year in July, it remained well above the European Central Bank’s (ECB) 2 per cent target with some components remaining persistently high (such as food prices). On July 27, 2023 (effective August 2, 2023), the ECB announced its ninth straight interest rate increase, bringing the deposit rate to 3.75 per cent, its highest level since 2000, and kept options open for further rate increases in the future if appropriate.

Outlook

The July 2023 Consensus forecasted that the euro zone economy would grow by 0.5 per cent in 2023 and 0.9 per cent in 2024. Tighter monetary conditions, a global demand slowdown and ongoing geopolitical tensions are expected to create headwinds for the euro zone economy throughout the rest of 2023 and into 2024. As such, the Ministry forecasts real GDP to grow by 0.4 per cent in 2023, 0.7 per cent in 2024, and average 1.2 per cent over the 2025 to 2027 period.

Financial Markets

Interest Rates

The U.S. Federal Reserve (Fed) continued its interest rate hikes in the first half of 2023 to reduce inflation. The Fed has increased rates four times in 2023, each time by 0.25 percentage points (pp), with the last increase in July bringing the target range for the federal funds rate to 5.25 to 5.50 per cent, the highest level since January 2001. Throughout 2023, the Federal Reserve also continued to reduce its holdings of Treasury securities, agency debt and mortgage-backed securities. Comparing their June 2023 projections to those released prior to Budget 2023 (December 2022), the Fed is anticipating stronger economic growth and lower unemployment in 2023, weaker economic growth in 2024, and higher core inflation over the 2023 to 2025 period. The Fed also left the door open for additional policy tightening in future meetings if deemed appropriate.

Following a pause in interest rate increases through the spring, the Bank of Canada (BoC) surprised markets by increasing interest rates twice in the summer. In both June and July, the BoC increased its target for the overnight interest rate by 0.25 pp, bringing the target for the overnight rate to 5.00 per cent, the highest rate since March 2001.

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The BoC’s increases to the policy interest rate reflected its view that monetary policy was not tight enough to return supply and demand back to balance and bring inflation sustainably back to target. In their July interest rate announcement, the BoC noted that global consumer price inflation was on a downward trend, largely due to lower energy prices, but underlying price pressures remained and core inflation was persistent. Looking ahead, the BoC projects inflation to remain close to 3 per cent until the middle of 2024, before reaching the 2 per cent target in the middle of 2025.

Chart 2.14  Interest Rate Forecasts

 

Sources: Bank of Canada; U.S. Federal Reserve; and B.C. Ministry of Finance forecasts.

Outlook

Both the U.S. Federal Reserve and the Bank of Canada expect that additional interest rate increases could be necessary if inflationary pressures persist, but emphasized that any rate changes will be dependent on economic data. Based on the average of six private sector forecasts as of July 21, 2023, the Ministry assumes that the U.S. federal funds rate will average 5.20 per cent in 2023 and 5.11 per cent in 2024. By comparison, the Bank of Canada’s target for the overnight rate is expected to average 4.74 per cent in 2023 and 4.54 per cent in 2024.

The Canadian three-month treasury bill interest rate is expected to average 4.79 per cent in 2023 and 4.42 per cent in 2024, according to the same six private sector forecasters. Meanwhile, the 10-year Government of Canada bond rate is assumed to average 3.19 per cent in 2023 and 3.10 per cent in 2024.

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Economic Review and Outlook

Table 2.4 Private Sector Canadian Interest Rate Forecasts

	3-month Treasury Bill		10-year Government Bond
Average annual interest rate (per cent)	2023	2024	2023	2024
BMO	4.82	4.50	3.22	3.11
CIBC	4.85	4.36	3.25	3.06
National Bank	4.74	4.29	3.19	3.13
RBC	4.78	4.63	3.10	2.86
Scotiabank	4.80	4.50	3.15	3.43
TD	4.76	4.22	3.21	3.04
Average (as of July 21, 2023)	4.79	4.42	3.19	3.10

Exchange Rates

Since the fourth quarter of 2022, reduced global economic uncertainty, along with slower inflation decreased the demand for safe-haven assets such as the U.S. dollar and contributed to a modest appreciation of the Canadian dollar. During the first seven months of 2023, the Canadian dollar averaged 74.4 US cents.

Chart 2.15  Private Sector Expectations for the Canadian Dollar

Sources: Bank of Canada and B.C. Ministry of Finance forecasts.

* Based on the average of private sector forecasts. First Quarterly Report 2023 as of July 21, 2023 and Budget 2023 as of January 5, 2023. 

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Outlook

Based on the average of six private sector forecasts as of July 21, 2023, the Ministry assumes the Canadian dollar will average 74.7 US cents in 2023 and edge up to 75.8 US cents in 2024.

Table 2.5 Private Sector Exchange Rate Forecasts

Average annual exchange rate (US cents/Canadian $)	2023	2024
BMO	75.2	77.7
CIBC	74.9	77.0
National Bank	74.0	73.1
RBC	74.1	74.2
Scotiabank	75.4	79.0
TD	74.6	73.7
Average (as of July 21, 2023)	74.7	75.8

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Table 2.6.1 Gross Domestic Product (GDP): British Columbia

					Forecast
	2021		2022 e		2023		2024		2025		2026		2027
Gross Domestic Product at Market Prices:
– Real (chained 2012 $ billions)		282.1		291.3		294.7		297.0		304.1		311.0		317.7
(% change)		6.1		3.3		1.2		0.8		2.4		2.3		2.2
– Nominal (current prices, $ billions)		350.6		391.7		403.2		416.4		434.2		452.2		471.4
(% change)		14.2		11.7		2.9		3.3		4.3		4.2		4.2
– GDP price deflator (2012 = 100)		124.3		134.4		136.8		140.2		142.7		145.4		148.4
(% change)		7.6		8.2		1.8		2.5		1.8		1.9		2.0
Real GDP per person (chained 2012 $)		54,227		54,772		53,680		52,586		52,941		53,251		53,480
(% change)		5.2		1.0		-2.0		-2.0		0.7		0.6		0.4
Real GDP per employed person
(% change)		0.0		0.1		0.1		0.0		1.1		1.0		0.9
Unit labour cost1 (% change)		6.0		7.2		4.7		4.3		2.2		1.6		1.6
Components of Real GDP at Market Prices (chained 2012 $ billions)
Household expenditure on goods and services		182.5		188.9		193.4		197.7		202.1		206.9		212.3
(% change)		7.3		3.5		2.4		2.2		2.3		2.4		2.6
– Goods		78.3		75.8		75.1		75.2		76.0		77.1		78.2
(% change)		7.9		-3.2		-0.9		0.1		1.1		1.4		1.5
– Services		104.4		113.2		118.4		122.6		126.3		130.0		134.2
(% change)		6.8		8.5		4.5		3.6		3.0		2.9		3.3
NPISH2 expenditure on goods and services		4.5		4.7		4.8		5.0		5.1		5.2		5.3
(% change)		2.9		4.9		2.9		2.5		2.2		1.9		1.9
Government expenditure on goods and services		53.6		55.5		56.1		54.5		54.6		54.7		54.7
(% change)		7.9		3.5		1.1		-2.8		0.1		0.1		0.1
Investment in fixed capital		77.0		79.0		81.9		84.2		86.0		87.6		89.4
(% change)		10.5		2.6		3.7		2.8		2.2		1.9		2.0
Final domestic demand		318.3		328.7		336.9		342.0		348.4		354.9		362.1
(% change)		8.1		3.3		2.5		1.5		1.9		1.9		2.0
Exports of goods and services		99.0		105.8		106.6		106.4		112.4		117.3		120.6
(% change)		3.2		6.9		0.7		-0.2		5.6		4.4		2.8
Imports of goods and services		136.1		144.2		148.3		150.8		156.1		160.8		164.9
(% change)		10.3		5.9		2.8		1.7		3.5		3.0		2.5
Inventory change		1.7		1.7		0.3		0.1		0.1		0.2		0.4
Statistical discrepancy		0.0		0.0		0.0		0.0		0.0		0.0		0.0
Real GDP at market prices		282.1		291.3		294.7		297.0		304.1		311.0		317.7
(% change)		6.1		3.3		1.2		0.8		2.4		2.3		2.2

¹ Unit labour cost is the nominal cost of labour incurred to produce one unit of real output.

² Non-profit institutions serving households.

^e B.C. Ministry of Finance estimate.

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Table 2.6.2 Selected Nominal Income and Other Indicators: British Columbia

						Forecast
	2021		2022			2023		2024		2025		2026		2027
Compensation of employees1 ($ millions)		171,837		190,233			201,523		211,895		221,663		230,229		238,904
(% change)		12.5		10.7			5.9		5.1		4.6		3.9		3.8
Household income ($ millions)		306,148		326,780	e		347,506		362,161		377,041		391,619		406,986
(% change)		5.5		6.7			6.3		4.2		4.1		3.9		3.9
Net operating surplus ($ millions)		44,601		53,878	e		47,511		43,173		43,829		45,476		47,615
(% change)		26.3		20.8			-11.8		-9.1		1.5		3.8		4.7
Retail sales ($ millions)		104,653		107,889			110,481		113,252		117,110		121,203		125,506
(% change)		12.6		3.1			2.4		2.5		3.4		3.5		3.5
Housing starts (units)		47,607		46,721			46,727		42,140		40,024		40,044		40,063
(% change)		26.2		-1.9			0.0		-9.8		-5.0		0.0		0.0
Residential sales ($ millions)		115,729		80,559			71,182		83,181		89,336		91,746		94,109
(% change)		57.7		-30.4			-11.6		16.9		7.4		2.7		2.6
Residential sales (units)		124,769		80,848			73,996		83,980		88,032		88,090		88,110
(% change)		32.9		-35.2			-8.5		13.5		4.8		0.1		0.0
Residential average sale price ($)		927,549		996,428			961,969		990,489		1,014,818		1,041,503		1,068,077
(% change)		18.7		7.4			-3.5		3.0		2.5		2.6		2.6
Consumer price index (2002 = 100)		136.1		145.5			151.2		155.0		158.4		161.5		164.8
(% change)		2.8		6.9			3.9		2.5		2.2		2.0		2.0

¹ Domestic basis; wages, salaries and employers’ social contributions.

^e B.C. Ministry of Finance estimate.

Table 2.6.3 Labour Market Indicators: British Columbia

					Forecast
	2021		2022		2023		2024		2025		2026		2027
Population (thousands at July 1)		5,202		5,319		5,490		5,648		5,745		5,840		5,941
(% change)		0.9		2.2		3.2		2.9		1.7		1.7		1.7
Net migration (thousands)
– International1,4		67.6		150.8		173.6		117.6		94.3		86.7		86.8
– Interprovincial4		27.2		0.5		-0.1		0.5		2.3		10.8		12.0
– Total		94.8		151.3		173.5		118.1		96.6		97.5		98.8
Labour force population2 (thousands)		4,350		4,426		4,510		4,643		4,741		4,834		4,927
(% change)		1.2		1.7		1.9		3.0		2.1		2.0		1.9
Labour force (thousands)		2,852		2,881		2,936		2,974		3,006		3,035		3,066
(% change)		3.3		1.0		1.9		1.3		1.1		1.0		1.0
Participation rate3 (%)		65.6		65.1		65.1		64.1		63.4		62.8		62.2
Employment (thousands)		2,664		2,748		2,778		2,800		2,837		2,873		2,909
(% change)		6.2		3.2		1.1		0.8		1.3		1.2		1.2
Unemployment rate (%)		6.6		4.6		5.4		5.9		5.6		5.3		5.1

¹ International migration includes net non-permanent residents and returning emigrants less net temporary residents abroad.

² The civilian, non-institutionalized population 15 years of age and over.

³ Percentage of the labour force population in the labour force.

⁴ Components may not sum to total due to rounding.

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Economic Review and Outlook

Table 2.6.4 Major Economic Assumptions

						Forecast
	2021		2022			2023		2024		2025		2026		2027
Real GDP
Canada (chained 2012 $ billions)		2,103		2,176			2,206		2,224		2,268		2,309		2,351
(% change)		5.0		3.4			1.4		0.8		2.0		1.8		1.8
U.S. (chained 2012 US$ billions)		19,610		20,014			20,374		20,456		20,865		21,241		21,602
(% change)		5.9		2.1			1.8		0.4		2.0		1.8		1.7
Japan (chained 2015 Yen trillions)		540		546			551		556		559		562		565
(% change)		2.2		1.0			1.0		0.8		0.6		0.5		0.5
China (constant 2010 US$ billions)		12,775		13,157			13,855		14,492		15,130		15,795		16,490
(% change)		8.4		3.0			5.3		4.6		4.4		4.4		4.4
Euro zone1 (chained 2015 Euro billions)		11,301		11,687			11,733		11,815		11,969		12,113		12,258
(% change)		5.4		3.4			0.4		0.7		1.3		1.2		1.2
Industrial production index (% change)
U.S.		4.4		3.4			-0.3		-0.8		2.0		1.7		1.7
Japan		5.6		0.1			-0.8		1.4		0.9		0.7		0.7
China		10.9		3.8			4.2		4.3		4.1		4.1		4.1
Euro zone1		8.9		2.3			-0.7		1.1		1.6		1.2		1.2
Housing starts (thousands)
Canada		271		262			225		205		200		200		200
(% change)		24.5		-3.4			-14.1		-8.9		-2.4		0.0		0.0
U.S.		1,601		1,553			1,380		1,345		1,350		1,350		1,350
(% change)		16.0		-3.0			-11.1		-2.5		0.4		0.0		0.0
Japan		856		860			855		855		880		880		880
(% change)		5.0		0.4			-0.5		0.0		2.9		0.0		0.0
Consumer price index
Canada (2002 = 100)		141.6		151.2			156.8		160.7		164.2		167.5		170.9
(% change)		3.4		6.8			3.7		2.5		2.2		2.0		2.0
Canadian interest rates (%)
3-month treasury bills		0.12		2.30			4.79		4.42		3.13		2.75		2.50
10-year government bonds		1.36		2.77			3.19		3.10		3.00		2.85		2.85
United States interest rates (%)
3-month treasury bills		0.04		2.08			5.25		4.84		3.63		2.88		2.50
10-year government bonds		1.44		2.95			3.72		3.51		3.25		3.13		3.00
Exchange rate (US cents / Canadian $)		79.8		76.8			74.7		75.8		77.6		77.7		78.3
British Columbia goods and services
Export price deflator (% change)		15.8		12.6	e		-2.4		1.8		1.2		1.2		1.2

¹ Euro zone (20) is Austria, Belgium, Croatia, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia, and Spain.

^e B.C. Ministry of Finance estimate.

54   | First Quarterly Report 2023/24

APPENDIX | FISCAL PLAN UPDATE

Table A1 Material Assumptions – Revenue

Revenue Source and Assumptions ($ millions unless otherwise specified)	Budget Estimate 2023/24			Updated Forecast 2023/24			Plan 2024/25			Plan 2025/26			2023/24 Sensitivities
Personal income tax *		15,953			15,431			16,149			16,940
Current calendar year assumptions
Household income growth		6.1	%		6.3	%		4.2	%		4.1	%	+/- 1 percentage point change in 2023 B.C.
Employee compensation growth		6.3	%		5.9	%		5.1	%		4.6	%	household income growth equals +/- $140 to $160
Tax base growth		6.0	%		6.2	%		4.3	%		4.0	%	million
Average tax yield		6.36	%		6.32	%		6.34	%		6.40	%
Current-year tax		15,528			14,924			15,621			16,415
Prior year’s tax assessments		520			550			560			570
Unapplied taxes		100			150			150			150
B.C. Tax Reduction		(205	)		(205	)		(210	)		(215	)
Non-refundable B.C. tax credits		(176	)		(176	)		(176	)		(176	)
Policy neutral elasticity **		0.9			0.9			1.1			1.2		+/- 0.5 change in 2023 B.C. policy neutral elasticity
Fiscal year assumptions													equals +/- $440 to $460 million
Prior-year adjustment		-			9
2022 Tax-year	2022 Assumptions
Household income growth		7.1	%		6.7	%							+/- 1 percentage point change in 2022 B.C.
Tax base growth		6.2	%		2.5	%							household or taxable income growth equals
Average 2022 tax yield		6.38	%		6.34	%							+/- $170 to $190 million one-time effect (prior-year
2022 tax		14,713			14,113								adjustment) and could result in an additional +/-
2021 & prior year’s tax assessments		510			700								$140 to $160 million base change in 2023/24
Unapplied taxes		100			150
B.C. Tax Reduction		(197	)		(197	)
Non-refundable B.C. tax credits		(176	)		(176	)
Policy neutral elasticity **		0.8			0.2
* Reflects information as at August 18, 2023
** Per cent growth in current year tax revenue (excluding policy measures) relative to per cent growth in household income (calendar year).
Corporate income tax *		5,938			6,037			7,616			5,942
Components of revenue (fiscal year)
Installments – subject to general rate		6,879			5,929			7,229			6,672
Installments – subject to small business rate		350			295			360			332
Non-refundable B.C. tax credits		(187	)		(187	)		(172	)		(177	)
Advance installments		7,042			6,037			7,417			6,827
Prior-year settlement payment		(1,104	)		-			199			(885	)
Current calendar year assumptions
National tax base ($ billions)		547.0			488.6			532.5			565.6		+/- 1% change in the 2023 national tax base
B.C. installment share of national tax base		13.6	%		13.4	%		14.2	%		12.9	%	equals +/- $70 to $80 million
Effective percentage tax rates
(% general/small business)		12.0 / 2.0			12.0 / 2.0			12.0 / 2.0			12.0 / 2.0
Share of the B.C. tax base subject to the small business rate		23.8	%		23.4	%		23.0	%		23.0	%	+/- 1 percentage point change in the 2023 small
B.C. tax base growth (post federal measures)		-7.1	%		-5.0	%		-0.5	%		1.7	%	business share equals -/+ $70 to $80 million
B.C. net operating surplus growth		-14.5	%		-11.8	%		-9.1	%		1.5	%
2022 Tax-year	2022 Assumptions
B.C. tax base growth (post federal measures)		7.5	%		1.9	%
Share of the B.C. tax base subject to small business rate		24.0	%		23.6	%							+/- 1% change in the 2022 B.C. tax base equals +/
B.C. net operating surplus growth		13.5	%		20.8	%							$60 to $80 million one-time effect (prior-year
Gross 2022 tax		7,424			7,068								adjustment) and could result in an additional
Prior-year settlement payment		(1,104	)		-								installments payments of +/- $80 to $100 million in
Prior years losses/gains (included in above)		(200	)		(100	)							2023/24
Non-refundable B.C. tax credits		(210	)		(210	)

* Reflects information as at August 18, 2023 

Cash received from the federal government is used as the basis for estimating revenue. Due to lags in the federal collection and installment systems, changes to the B.C. net operating surplus and tax base forecasts affect revenue in the succeeding year. The 2023/24 installments from the federal government reflects two-third of payments related to the 2023 tax year (paid during Apr-July 2023 and adjusted in Sept and Dec) and one-third of 2024 payments. Installments for the 2023 (2024) tax year are based on B.C.’s share of the national tax base for the 2022 (2023) tax year and a forecast of the 2023 (2024) national tax base. B.C.’s share of the 2021 national tax base was 13.8%, based on tax assessments as of December 31, 2022. Cash adjustments for any under/over payments from the federal government in respect of 2022 will be received/paid on March 31, 2024.

First Quarterly Report 2023/24 |  55

Appendix – Fiscal Plan Update

Table A1 Material Assumptions – Revenue (continued)

Revenue Source and Assumptions ($ millions unless otherwise specified)	Budget Estimate 2023/24			Updated Forecast 2023/24			Plan 2024/25			Plan 2025/26			2023/24 Sensitivities
Employer health tax		2,731			2,750			2,892			3,025
Employee compensation growth		6.3	%		5.9	%		5.1	%		4.6	%	+/- 1 percentage point change in the 2023
													employee compensation growth equals up to +/-
													$25 million
Provincial sales tax		10,187			10,362			10,779			11,229
Provincial sales tax base growth (fiscal year)		3.2	%		5.0	%		4.0	%		4.1	%	+/- 1 percentage point change in the 2023
Calendar Year nominal expenditure													consumer expenditure growth equals up to +/- $20
Consumer expenditures on durable goods		-3.6	%		2.0	%		0.8	%		2.2	%	to $30 million
Consumer expenditures on goods and services		6.9	%		6.4	%		4.7	%		4.4	%
Business investment		1.4	%		4.0	%		4.8	%		5.5	%	+/- 1 percentage point change in the 2023
Other		3.4	%		2.6	%		2.6	%		5.7	%	business investment growth equals up to +/- $10
													to $20 million
Components of Provincial sales tax revenue
Consolidated Revenue Fund		10,178			10,353			10,770			11,220
BC Transportation Financing Authority		9			9			9			9
Fuel and carbon taxes		3,883			3,742			3,953			4,287
Calendar Year
Real GDP		0.4	%		1.2	%		0.8	%		2.4	%
Gasoline volumes		0.0	%		-1.0	%		-1.0	%		-3.0	%
Diesel volumes		3.0	%		-2.0	%		2.0	%		2.0	%
Natural gas volumes		1.0	%		-1.0	%		1.0	%		0.0	%
Carbon tax rates (April 1)
Carbon dioxide equivalent emissions ($/tonne)		65			65			80			95
Natural gas (cents/gigajoule)		322.79	¢		322.79	¢		397.28	¢		471.77	¢
Gasoline (cents/litre)		14.31	¢		14.31	¢		17.61	¢		20.91	¢
Light fuel oil (cents/litre)		16.85	¢		16.85	¢		20.74	¢		24.62	¢
Components of revenue *
Consolidated Revenue Fund		582			562			553			547
BC Transit		18			18			18			17
BC Transportation Financing Authority		472			462			461			454
Fuel tax revenue		1,072			1,042			1,032			1,018
Carbon tax revenue		2,811			2,700			2,921			3,269
Property taxes		3,488			3,591			3,739			3,940
Calendar Year
Consumer Price Index		3.9	%		3.9	%		2.5	%		2.2	%	+/- 1 percentage point change in 2023 new
Housing starts (units)		39,033			46,727			42,140			40,024		construction & inflation growth equals up to +/-
Home owner grants (fiscal year)		910			907			926			944		$30 million in residential property taxation revenue
Components of revenue
Residential (net of home owner grants)		1,434			1,510			1,596			1,674
Speculation and vacancy		90			90			90			90
Non-residential		1,566			1,572			1,630			1,717		+/- 1% change in 2023 total
Rural area		147			149			153			157		business property assessment
Police		37			39			40			41		value equals up to +/- $20 million
BC Assessment Authority		107			114			115			117		in non-residential property
BC Transit		107			117			115			144		taxation revenue
Other taxes		3,144			3,280			3,545			3,698
Calendar Year
Population		2.4	%		3.2	%		2.9	%		1.7	%
Residential sales value		-19.8	%		-11.6	%		16.9	%		7.4	%
Real GDP		0.4	%		1.2	%		0.8	%		2.4	%
Nominal GDP		2.8	%		2.9	%		3.3	%		4.3	%
Components of revenue													+/- 1% change to 2023 residential
Property transfer		1,799			1,950			2,205			2,348		sales value equals +/- $20 million
Additional Property Transfer Tax (included in above)		30			40			45			60		in property transfer revenue, depending on property values
Tobacco		565			520			520			520
Insurance premium		780			810			820			830

56   | First Quarterly Report 2023/24

Appendix – Fiscal Plan Update

Table A1 Material Assumptions – Revenue (continued)

Revenue Source and Assumptions ($ millions unless otherwise specified)	Budget Estimate 2023/24			Updated Forecast 2023/24			Plan 2024/25			Plan 2025/26			2023/24 Sensitivities
Energy, sales of Crown land tenures, metals, minerals and other *		3,367			1,962			2,237			2,193
Natural gas price													+/- $0.25 change in the natural gas
Plant inlet, $C/gigajoule		3.04			1.29			2.03			2.33		price equals +/- $130 to $150 million,
Sumas, $US/MMBtu		3.99			2.42			3.06			3.36		including impacts on production
Natural gas production volumes													volumes and royalty program
Billions of cubic metres		72.2			70.2			73.2			73.4		credits, but excluding any
Petajoules		2,995			2,927			3,051			3,059		changes from natural gas liquids
Annual per cent change		8.9	%		7.2	%		4.2	%		0.3	%	revenue (e.g. butane, pentanes)
													Sensitivities can also vary
Oil price ($US/bbl at Cushing, OK)		80.79			74.56			73.17			74.72		significantly at different price levels
													+/- 1% change in natural gas
Auctioned land base (000 hectares)		11			11			20			20		volumes equals +/- $20 million
Average bid price/hectare ($)		275			200			200			300		in natural gas royalties
Cash sales of Crown land tenures		3			2			4			6		+/- 1 cent change in the exchange rate
Metallurgical coal price ($US/tonne, fob Australia)		252			248			222			210		equals +/-$1 million in natural gas royalties
Copper price ($US/lb)		3.56			3.82			3.96			4.09
Annual electricity volumes set by treaty		3.9			3.9			3.8			3.8		+/- $10/bbl change in petroleum price
(million mega-watt hours)													equals +/- $5 million in petroleum royalties
Mid-Columbia electricity price		107.84			92.90			90.06			92.10		+/- 12% change in natural gas liquids
($US/mega-watt hour)													(equivalent to +/- $10/bbl oil price) prices
													equals +/- $80 to $100 million in natural gas
Exchange rate (US¢/C$, calendar year)		74.7			74.7			75.8			77.6		liquids royalties
Components of revenue
Bonus bid auctions:													+/- US$20 change in the average
Deferred revenue		61			60			29			28		metallurgical coal price
Current-year cash (one-tenth)		-			1			-			-		equals +/- $50 to $80 million
Fees and rentals		50			38			36			36		+/- 10% change in the average Mid-Columbia
Total bonus bids, fees and rentals		111			99			65			64		electricity price equals +/- $50 million
Natural gas royalties after deductions and allowances		2,016			837			1,179			1,182
Petroleum royalties		37			34			31			29
Columbia River Treaty electricity sales		522			478			452			456
BC Energy Regulator fees and levies		66			73			75			74		Based on a recommendation from the Auditor
Coal, metals and other minerals revenue:													General to be consistent with generally accepted
Coal tenures		8			8			8			8		accounting principles, bonus bid revenue
Net coal mineral tax		372			194			240			210		recognition reflects ten-year deferral of cash
Net metals and other minerals tax		47			51			54			58		receipts from the sale of Crown land tenures
Recoveries relating to revenue sharing payments to First Nations		170			170			115			94
Miscellaneous mining revenue		18			18			18			18
Total coal, metals and other minerals revenue		615			441			435			388
Gross royalties prior to deductions and allowances
Gross natural gas revenue		1,993			531			953			1,077
Gross natural gas liquids royalties revenue		783			685			609			727
Royalty programs and infrastructure credits
Deep drilling		(400	)		(200	)		(141	)		(99	)
Road, pipeline, Clean Growth Infrastructure Royalty and other infrastructure programs		(95	)		(65	)		(118	)		(171	)
Total		(495	)		(265	)		(259	)		(270	)
Implicit average natural gas royalty rate		22.2	%		22.5	%		14.8	%		11.8	%

Royalty program (marginal, low productivity and ultra marginal drilling) adjustments reflect reduced royalty rates. Natural gas royalties incorporate royalty programs and Treasury Board approved infrastructure credits. 

* Reflects information as at August 4, 2023. 

First Quarterly Report 2023/24 |  57

Appendix – Fiscal Plan Update

Table A1 Material Assumptions – Revenue (continued)

Revenue Source and Assumptions ($ millions unless otherwise specified)	Budget Estimate 2023/24			Updated Forecast 2023/24			Plan 2024/25			Plan 2025/26			2023/24 Sensitivities
Forests *		846			886			847			952
Prices (calendar year average)													+/- US$50 change in SPF price equals
SPF 2x4 ($US/thousand board feet)		400			400			450			500		+/- $100 to $150 million
Crown harvest volumes (million cubic metres)
Interior		30.0			30.0			29.9			29.7		+/- 10% change in Interior harvest volumes equals
Coast		8.0			8.0			8.1			8.3		+/- $50 to $60 million
Total		38.0			38.0			38.0			38.0		+/- 10% change in Coastal harvest volumes
B.C. Timber Sales (included in above)		6.3			6.3			6.4			7.4		equals +/- $15 to $25 million
Stumpage rates ($Cdn/cubic metre)
Total stumpage rates		18.07			19.04			19.42			22.14		+/- 1 cent change in exchange rate
													equals +/- $25 to $35 million in stumpage revenue
Components of revenue
Timber tenures (net of revenue sharing recoveries)		293			330			350			440
Recoveries relating to revenue sharing payments to First Nations		138			138			138			105
B.C. Timber Sales		274			274			268			316		The above sensitivities relate
Logging tax		100			100			50			50		to stumpage revenue only.
Other CRF revenue		30			33			30			30
Recoveries		11			11			11			11
* Reflects information as at August 3, 2023
Other natural resource		551			536			509			549
Components of revenue
Water rental and licences*		478			463			436			476		+/- 5% change in water power production
Recoveries		50			50			50			50		equals +/- $20 to $25 million
Angling and hunting permits and licences		10			10			10			10
Recoveries		13			13			13			13
* Water rentals for power purposes are indexed to Consumer Price Index.
Total natural resource recoveries relating to revenue sharing payments to First Nations		327			327			253			199		Revenue sharing from natural gas royalties, mineral tax and forest stumpage revenues.
Other revenue		10,520			10,667			10,829			11,052
Components of revenue
Fees and licences
Motor vehicle licences and permits		618			614			621			630
International student health fees		70			90			90			90
Other Consolidated Revenue Fund		495			509			476			494
Summary consolidation eliminations		(14	)		(15	)		(15	)		(14	)
Ministry vote recoveries		270			270			105			105
Taxpayer-supported Crown corporations		202			208			209			211
Post-secondary education fees		2,770			2,829			2,956			3,061
Other healthcare-related fees		496			510			510			516
School Districts		275			248			266			281
Investment earnings
Consolidated Revenue Fund		130			235			130			130
Fiscal agency loans & sinking funds earnings		1,088			1,014			1,223			1,202
Summary consolidation eliminations		(198	)		(204	)		(198	)		(204	)
Taxpayer-supported Crown corporations		36			46			41			41
SUCH sector agencies		293			318			326			342
Sales of goods and services
SUCH sector agencies		986			988			1,039			1,092
BC Infrastructure Benefits Inc.		246			279			311			346
Other taxpayer-supported Crown corporations		254			99			107			112
Miscellaneous		2,503			2,629			2,632			2,617

58   | First Quarterly Report 2023/24

Appendix – Fiscal Plan Update

Table A1 Material Assumptions – Revenue (continued)

Revenue Source and Assumptions ($ millions unless otherwise specified)	Budget Estimate 2023/24			Updated Forecast 2023/24			Plan 2024/25			Plan 2025/26			2023/24 Sensitivities
Health and social transfers		8,970			9,252			9,385			9,770
National Cash Transfers
Canada Health Transfer (CHT)		49,421			49,421			52,083			54,687
Annual growth		9.3	%		9.3	%		5.4	%		5.0	%
Canada Social Transfer (CST)		16,416			16,416			16,909			17,416
B.C.’s share of national population (June 1)		13.62	%		13.64	%		13.60	%		13.55	%	+/- 0.1 percentage point change in B.C.’s
													population share equals +/- $65 million
B.C. health and social transfers revenue
CHT		6,733			6,740			7,085			7,410
CST		2,237			2,239			2,300			2,360
CHT top up - strengthen public health care		-			273			-			-
Other federal contributions		4,623			4,240			4,271			3,937
Components of revenue
Disaster Financial Assistance Arrangements		1,268			848			1,102			773
B.C.’s share of the federal cannabis excise tax		70			85			85			85
Other Consolidated Revenue Fund		104			105			105			105
Vote Recoveries:
Labour Market Development Agreement		296			296			296			296
Labour Market and Skills Training Program		98			98			98			98
Home Care		82			82			81			81
Mental Health		82			82			82			82
Child Care		822			822			822			822
Child Safety, Family Support, Children in Care and with special needs		83			83			83			83
Public Transit		297			297			92			135
Local government services and transfers		188			188			181			120
Other recoveries		154			154			155			155
Taxpayer-supported Crown corporations		324			347			322			329
Post-secondary institutions		634			623			636			641
Other SUCH sector agencies		121			130			131			132
Service delivery agency direct revenue		8,981			9,118			9,345			9,614
School districts		681			661			677			693
Post-secondary institutions		4,962			4,992			5,196			5,385
Health authorities and hospital societies		1,165			1,216			1,199			1,208
BC Transportation Financing Authority		579			567			571			578
Other service delivery agencies		1,594			1,682			1,702			1,750
Commercial Crown corporation net income		3,489			3,492			3,985			4,020
BC Hydro		712			712			712			712		Sensitivities impacts shown below are before regulatory account transfers
Reservoir water inflows		100	%		85	%		100	%		100	%	+/-1% in hydro generation equals +/- $60 million
Mean gas price		5.08			4.46			4.21			4.35		+/-1% equals +/- $0 million
(Sumas, $US/MMbtu – BC Hydro forecast based on NYMEX forward selling prices)
Electricity prices		83.41			89.56			86.47			85.99		+/-1% change in electricity/gas trade income
(Mid-C, $US/MWh)													equals +/- $3.5 million
ICBC		-			-			450			450
Vehicle growth		1.9	%		1.9	%		1.9	%		1.9	%	+/-1% equals +/-$56 million
Current claims cost percentage change		11.8	%		11.8	%		9.9	%		6.7	%	+/-1% equals +/-$41 million
Unpaid claims balance ($ billions)		10.4			10.4			9.0			8.3		+/-1% equals +/-$104 to $125 million
Investment return		0.7	%		0.7	%		3.6	%		3.7	%	+/-1% return equals +/-$180 to $192 million
Loss ratio		84.3	%		84.3	%		85.0	%		84.7	%

First Quarterly Report 2023/24 |  59

Appendix – Fiscal Plan Update

Table A2 Natural Gas Price Forecasts – 2023/24 to 2025/26

Private sector forecasts (calendar year)						Adjusted to fiscal years and $C/gigajoule at plant inlet
	2023	2024		2025		2023/24		2024/25		2025/26
GLJ Henry Hub US$/MMBtu (Jul 1, 2023)	2.70		3.80		4.16		1.54		2.34		2.61
Sproule Henry Hub US$/MMBtu (Jun 30, 2023)	2.84		4.00		4.25		1.79		2.55		2.72
McDaniel Henry Hub US$/MMBtu (Jul 1, 2023)	2.58		3.32		3.90		1.29		1.81		2.29
Deloitte Henry Hub US$/Mcf (Jun 30, 2023)	2.55		3.60		4.20		1.29		2.01		2.48
GLJ Alberta AECO-C Spot CDN$/MMBtu (Jul 1, 2023)	2.64		3.60		4.35		1.59		2.42		2.94
Sproule Alberta AECO-C Spot CDN$/MMBtu (Jun 30, 2023)	2.85		3.83		4.13		1.73		2.52		2.74
McDaniel AECO-C Spot C$/MMBtu (Jul 1, 2023)	3.05		3.32		3.90		1.54		2.10		2.52
Deloitte AECO-C Spot C$/Mcf (Jun 30, 2023)	2.60		3.30		3.95		1.28		1.99		2.43
GLJ Sumas Spot US$/MMBtu (Jul 1, 2023)	3.80		3.70		4.06		1.64		2.94		3.22
Sproule Sumas Spot CDN$/MMBtu (Jun 30, 2023)	5.85		5.79		6.12		2.70		3.81		4.07
GLJ BC Spot Plant Gate CDN$/MMBtu (Jul 1, 2023)	2.11		3.18		3.98		1.47		2.41		2.96
Sproule BC Station 2 CDN$/MMBtu (Jun 30, 2023)	2.53		3.73		4.02		1.73		2.55		2.77
McDaniel BC Avg Plant Gate C$MMBtu (Jul 1, 2023)	2.35		2.60		3.17		1.30		1.80		2.21
Deloitte BC Station 2 C$MMBtu (Jun 30, 2023)	3.10		3.75		3.75		1.42		2.19		2.62
GLJ Midwest Chicago US$/MMBtu (Jul 1, 2023)	3.65		4.01		4.10		1.96		2.94		3.22
Sproule Alliance Plant Gate CDN$/MMBtu (Jun 30, 2023)	3.59		5.01		5.33		2.61		3.64		3.88
EIA Henry Hub US$/MMBtu (Jul 2023)	2.62		3.29				1.22
TD Economics Henry Hub FuturesUS$/MMBtu (Jun 2023)	2.66		3.38				1.21
Scotiabank Group Henry Hub US$/MMBtu (Jun 2023)	2.79		3.75				1.43
BMO Henry Hub US$/MMBtu (Jun 2023)	2.75		3.75				1.40
InSite Petroleum Consultants Ltd BC Spot C$/Mcf (Jun 2023)	2.67		3.60		4.15		1.64		2.36		2.76
NYMEX Forward Market converted to Plant Inlet CDN$/GJ (Jul 11, 2023)							1.49		2.04		2.37
Average all minus high/low							1.57		2.45		2.81
Average one forecast per consultant minus high/low							1.41		2.32		2.72
Natural gas royalty price forecast							1.29		2.03		2.33

GLJ: Gilbert Laustsen Jung Petroleum Consultants Ltd         US EIA: US Energy Information Administration         AECO: Alberta Energy Company

Deloitte/AJM: Deloitte L.L.P acquired Ashton Jenkins Mann Petroleum Consultants         McDaniel: McDaniel & Associates Consultants Ltd

60   | First Quarterly Report 2023/24

Appendix – Fiscal Plan Update

First Quarterly Report 2023/24 |  61

Appendix – Fiscal Plan Update

Table A3 Material Assumptions – Expense

Ministry Programs and Assumptions ($ millions unless otherwise specified)	Budget Estimate 2023/24		Updated Forecast 2023/24		Plan 2024/25		Plan 2025/26		2023/24 Sensitivities
Attorney General		773		776		781		778
New cases filed/processed		242,000		235,000		242,000		242,000	The number of criminal cases proceeded on by the
(# for all courts)									provincial and federal Crown (including appeals to
									higher courts in BC), the number of civil and family
									litigation cases, the number of violation tickets
									disputed, and the number of municipal bylaw tickets
									disputed which would go to court for resolution.
Crown Proceeding Act (CPA)		25		28		25		25	Number of litigation cases resolved by court decisions
									or negotiated settlement.
Children and Family Development		1,912		1,912		1,930		1,926
Average children-in-care		4,852		4,822		4,727		4,663	The average number of children-in-care is decreasing
caseload (#)									as a result of ministry efforts to keep children in family
Average annual residential		105,337		135,718		151,984		169,492	settings where safe and feasible. The average cost
cost per child in care ($)									per child in care is projected to increase based on the
									higher cost of contracted residential services and an
									increasing acuity of need for children in care. A 1%
									increase in the cost per case or a 1% increase in the
									average caseload will affect expenditures by $3.3
									million (excluding Indigenous CFS Agencies).
Education and Child Care		8,874		8,874		9,133		9,172
Public School Enrolment (# of FTEs)		591,272		591,272		600,178		607,449	Updated forecast enrolment figures are based on
School age (K–12)		568,521		568,521		577,311		584,487	submissions from school districts of their actual
Continuing Education		905		905		905		905	enrolment as at September 30, 2022 for the 2022/23
Distributed Learning (online)		13,229		13,229		13,346		13,441	school year, including February and May enrolment
Summer		6,288		6,288		6,288		6,288	counts. Projections are based on the Ministry of
Adults		2,328		2,328		2,328		2,328	Education and Child Care’s enrolment forecasting model.
Emergency Management and Climate Readiness		101		101		111		120
Emergency Program Act (EPA)		36		36		250		91	Emergency disaster relief is unpredictable by
									nature. There are a number of factors that could impact
									the timing of delivering recovery projects resulting
									from the Major Events.
Forests		925		1,687		905		913
BC Timber Sales		237		237		235		243	Targets can be impacted by changes to actual
									inventory costs incurred. There is a lag of
									approximately 1.5 years between when inventory costs
									are incurred and when they are expensed. Volume
									harvested can also impact targets. For example, if
									volume harvested is less than projected in any year,
									then capitalized expenses will also be reduced in that year.
Fire Management		204		966		205		205	Costs are driven by length of season and severity of
									weather conditions, severity of fires, proportion of
									interface fires, size of fires and damages caused.
									Costs have ranged from a low of $47 million in 2006 to
									a high of $809 million in 2021/22 (Fire season 2021).

62   | First Quarterly Report 2023/24

Appendix – Fiscal Plan Update

Table A3 Material Assumptions – Expense (continued)

Ministry Programs and Assumptions ($ millions unless otherwise specified)	Budget Estimate 2023/24		Updated Forecast 2023/24		Plan 2024/25		Plan 2025/26		2023/24 Sensitivities
Health		28,674		28,674		29,887		30,669
Pharmacare		1,578		1,578		1,610		1,597	A 1% change in PharmaCare utilization or prices
									affects costs by approximately $12 million.
Medical Services Plan (MSP)		7,039		7,039		7,340		7,281	A 1% increase in volume of services provided by fee-
									for-service physicians affects costs by approximately
									$35 million.
Regional Services		19,671		19,671		20,534		21,403	A 1% increase in volume of services provided by
									Health Authorities is estimated to be $186 million.
Post-Secondary Education and Future Skills		2,770		2,770		2,815		2,837
Student spaces in public institutions		206,085		206,085		205,886		206,048	Student enrolments may fluctuate due to a number of
									factors including economic changes and labour market
									needs. Current year forecast to be updated at Q3 to
									align with PSI reporting, consistent with past practice.
Public Safety and Solicitor General		1,028		1,028		1,034		1,033
Policing, Victim Services and Corrections		909		909		913		913	Policing, Victim Services and Corrections costs are
									sensitive to the volume and severity of criminal
									activity, the number of inmate beds occupied and the
									number of offenders under community supervision.
Social Development and Poverty Reduction		4,745		4,745		4,861		4,927
Temporary Assistance		47,500		55,822		45,200		44,400	The expected to work caseload is sensitive to
annual average caseload (#)									fluctuations in economic and employment trends.
									Costs are driven by changes to cost per case and
									caseload. Cost per case fluctuations result from
									changes in the needed supports required by clients, as
									well as caseload composition.
Disability Assistance		121,600		122,359		125,000		126,700	The caseload for persons with disabilities is sensitive
annual average caseload (#)									to the aging of the population and longer life
									expectancy for individuals with disabilities. Cost per
									case fluctuations are driven primarily by earnings
									exemptions which is dependent on the level of income
									earned by clients.
Adult Community Living:
Developmental Disabilities Programs
Average caseload (#)		24,330		24,190		25,070		25,520	The adult community living caseload is sensitive to an
Average cost per client ($)		53,600		58,700		57,900		58,400	aging population and to the level of service required.
Personal Supports Initiative (PSI)									Cost per case fluctuations are driven by the proportion
Average caseload (#)		3,240		3,210		3,510		3,650	of clients receiving certain types of services at
Average cost per client ($)		15,200		16,600		15,800		15,800	differing costs. For example, residential care services
									are significantly more costly than day programs.

First Quarterly Report 2023/24 |  63

Appendix – Fiscal Plan Update

Table A3 Material Assumptions – Expense (continued)

Ministry Programs and Assumptions ($ millions unless otherwise specified)	Budget Estimate 2023/24			Updated Forecast 2023/24			Plan 2024/25			Plan 2025/26			2023/24 Sensitivities
Tax Transfers		3,159			3,078			3,424			3,826
Individuals		1,815.0			1,805.0			2,133.0			2,449.0
Climate Action Tax Credit		757.0			747.0			1,051.0			1,359.0		These tax transfers are now expensed as
BC Family Benefit		463.0			463.0			482.8			485.0		required under generally accepted accounting
Renter’s Tax Credit		309.0			309.0			313.0			319.0		principles.
Sales Tax		50.0			50.0			50.0			50.0
Small Business Venture Capital		40.0			40.0			40.0			40.0
BC Senior’s Home Renovation		3.0			3.0			3.0			3.0
Other tax transfers to individuals		193.0			193.0			193.2			193.0
													Changes in 2022 tax transfers will result in one-time
													effect (prior-year adjustment) and could result in an
Corporations		1,344.0			1,273.0			1,291.0			1,377.0		additional base change in 2023/24. Production
Film and Television		152.5			136.3			138.8			152.5		services tax credit is the most volatile of all tax
Production Services		890.3			835.5			845.8			912.8		transfers and is influenced by several factors including
Scientific Research & Experimental Development		96.2			96.3			101.3			106.3		delay in filing returns and assessment of claims,
Interactive Digital Media		110.0			110.0			110.0			110.0		length of projects and changes in the exchange rates.
Mining Exploration		30.0			30.0			30.0			30.0
Other tax transfers to corporations		65.0			64.9			65.1			65.4
Prior-year adjustment (included above)*
Individuals					-
Corporations					(8.3	)
2022 Tax-year	2022 Assumptions
Tax Transfers		2,206.0			2,196.0
Individuals		1,011.0			1,001.0
Corporations		1,195.0			1,195.0
Film and Television		140.0			140.0
Production Services		780.0			780.0
Scientific Research & Experimental Development		90.0			90.0
Interactive Digital Media		110.0			110.0
Other tax transfers to corporations		75.0			75.0
*2023/24 tax transfer forecast incorporates adjustments relating to prior years.
Management of Public Funds and Debt		1,309			1,400			1,679			2,008
Interest rates for new provincial borrowing:													Full year impact on MoPD on interest costs of a 1%
Short-term		4.04	%		4.97	%		4.11	%		2.99	%	change in interest rates equals $7 million;
Long-term		4.10	%		4.18	%		4.12	%		4.12	%	$100 million increase in debt level equals $4.4 million.
CDN/US exchange rate (cents)		132.6			133.4			130.8			128.8
Service delivery agency net spending		9,176			9,322			9,961			10,365
School districts		557			651			662			672
Post-secondary institutions		4,795			4,809			5,009			5,176
Health authorities and hospital societies		1,103			1,245			1,134			1,144		Agency expenses, net of Provincial funding. These are
BC Transportation Financing Authority		1,887			1,894			2,311			2,402		mainly funded through revenue from other sources.
BC Infrastructure Benefits Inc.		246			279			311			346
Other service delivery agencies		588			444			534			625

64   | First Quarterly Report 2023/24

Appendix – Fiscal Plan Update

Table A4 Operating Statement – 2016/17 to 2025/26 ¹

($ millions)	Actual 2016/17		Actual 2017/18		Actual 2018/19			Actual 2019/20		Actual 2020/21		Actual 2021/22		Actual 2022/23		Updated Forecast 2023/24		Plan 2024/25		Plan 2025/26		Average annual change
																						(per cent)
Revenue	51,449		52,020			57,128		58,660		62,156		72,392		81,536		76,228		80,736		81,534		5.2
Expense	(48,721	)	(51,744	)		(55,634	)	(59,022	)	(67,663	)	(71,127	)	(80,832	)	(82,202	)	(83,383	)	(85,171	)	6.4
Surplus (deficit) before forecast allowance	2,728		276			1,494		(362	)	(5,507	)	1,265		704		(5,974	)	(2,647	)	(3,637	)
Forecast allowance	-		-			-		-		-		-		-		(700	)	(500	)	(500	)
Surplus (deficit)	2,728		276			1,494		(362	)	(5,507	)	1,265		704		(6,674	)	(3,147	)	(4,137	)
Per cent of nominal GDP: 2
Surplus (deficit)	1.0		0.1			0.5		-0.1		-1.8		0.4		0.2		-1.7		-0.8		-1.0
Per cent of revenue:
Surplus (deficit)	5.3		0.5			2.6		-0.6		-8.9		1.7		0.9		-8.8		-3.9		-5.1
Per capita ($): 3
Surplus (deficit)	561		56			298		(71	)	(1,068	)	243		132		(1,216	)	(557	)	(720	)

¹ Figures have been restated to reflect government current accounting policies.

² Surplus (deficit) as a per cent of nominal GDP is calculated using nominal GDP for the calendar year ending in the fiscal year (e.g. 2023/24 amounts divided by nominal GDP for the 2023 calendar year).

³ Per capita revenue and expense is calculated using July 1 population (e.g. 2023/24 amounts divided by population on July 1, 2023).

First Quarterly Report 2023/24 |   65

Appendix – Fiscal Plan Update

Table A5 Revenue by Source – 2016/17 to 2025/26

($ millions)	Actual 2016/17		Actual 2017/18		Actual 2018/19			Actual 2019/20		Actual 2020/21		Actual 2021/22	Actual 2022/23		Updated Forecast 2023/24	Plan 2024/25	Plan 2025/26	Average annual change
																		(per cent)
Taxation revenue:
Personal income	9,704		8,923			11,364		10,657		11,118		13,704	17,268		15,431	16,149	16,940	6.4
Corporate income	3,003		4,165			5,180		5,011		4,805		5,053	9,156		6,037	7,616	5,942	7.9
Employer health	-		-			464		1,897		2,156		2,443	2,720		2,750	2,892	3,025	n/a
Sales	6,606		7,131			7,369		7,374		7,694		8,731	9,818		10,362	10,779	11,229	6.1
Fuel	969		1,010			1,015		1,008		936		1,022	1,021		1,042	1,032	1,018	0.5
Carbon	1,220		1,255			1,465		1,682		1,683		2,011	2,161		2,700	2,921	3,269	11.6
Tobacco	737		727			781		729		711		708	531		520	520	520	-3.8
Property	2,279		2,367			2,617		2,608		2,313		3,012	3,253		3,591	3,739	3,940	6.3
Property transfer	2,026		2,141			1,826		1,609		2,098		3,327	2,293		1,950	2,205	2,348	1.7
Insurance premium	549		602			633		691		652		706	804		810	820	830	4.7
	27,093		28,321			32,714		33,266		34,166		40,717	49,025		45,193	48,673	49,061	6.8
Natural resource revenue:
Natural gas royalties	152		161			199		118		196		920	2,255		837	1,179	1,182	25.6
Bonus bids, rents on drilling rights and leases	633		276			279		225		162		133	122		99	65	64	-22.5
Columbia River Treaty	111		111			202		119		117		231	437		478	452	456	17.0
Other energy and minerals	403		619			557		386		191		795	979		548	541	491	2.2
Forests	913		1,065			1,406		988		1,304		1,893	1,887		886	847	952	0.5
Other resources	499		463			465		432		433		499	518		536	509	549	1.1
	2,711		2,695			3,108		2,268		2,403		4,471	6,198		3,384	3,593	3,694	3.5
Other revenue:
Medical Services Plan premiums	2,558		2,266			1,360		1,063		(4	)	1	(1	)	-	-	-	n/a
Post-secondary education fees	1,828		2,034			2,275		2,451		2,418		2,536	2,651		2,829	2,956	3,061	5.9
Other health-care related fees	404		429			441		475		372		417	519		510	510	516	2.8
Motor vehicle licences and permits	529		557			568		579		571		610	613		614	621	630	2.0
Other fees and licences	894		963			949		1,004		972		1,020	1,146		1,310	1,131	1,167	3.0
Investment earnings	1,232		1,101			1,243		1,263		1,264		1,306	1,316		1,409	1,522	1,511	2.3
Sales of goods and services	1,131		1,133			1,164		1,162		741		1,059	1,396		1,366	1,457	1,550	3.6
Miscellaneous	2,377		2,410			2,249		2,676		2,395		2,851	3,049		2,629	2,632	2,617	1.1
	10,953		10,893			10,249		10,673		8,729		9,800	10,689		10,667	10,829	11,052	0.1
Contributions from the federal government:
Canada Health Transfer	4,744		4,994			5,182		5,523		5,701		6,431	6,432		7,013	7,085	7,410	5.1
Canada Social Transfer	1,751		1,854			1,908		1,971		2,042		2,110	2,174		2,239	2,300	2,360	3.4
Other cost shared agreements	1,672		2,207			1,962		2,041		5,151		3,439	3,920		4,240	4,271	3,937	10.0
	8,167		9,055			9,052		9,535		12,894		11,980	12,526		13,492	13,656	13,707	5.9
Commercial Crown corporation net income:
BC Hydro 1	684		683			(428	)	705		688		668	360		712	712	712	0.4
Liquor Distribution Branch	1,083		1,119			1,104		1,107		1,161		1,189	1,199		1,150	1,170	1,194	1.1
BC Lottery Corporation 2	1,329		1,391			1,405		1,336		420		1,211	1,584		1,456	1,478	1,484	1.2
ICBC	(612	)	(1,327	)		(1,153	)	(376	)	1,528		2,216	(197	)	-	450	450	-196.6
Other	41		140			127		146		167		140	152		174	175	180	17.9
Accounting adjustment 1	-		(950	)		950		-		-		-	-		-	-	-	n/a
	2,525		1,056			2,005		2,918		3,964		5,424	3,098		3,492	3,985	4,020	5.3
Total revenue	51,449		52,020			57,128		58,660		62,156		72,392	81,536		76,228	80,736	81,534	5.2

¹ BC Hydro’s loss for 2018/19 includes a write-off of a regulatory account. At the summary level, the Province recognized a $950 million adjustment in fiscal 2017/18 with respect to BC Hydro’s deferred regulatory accounts.

² Net of federal government payments and beginning in 2021/22, is also net of payments to the BC First Nations Gaming Revenue Sharing Limited Partnership in accordance with section 14.3 of the Gaming Control Act (B.C.).

66  | First Quarterly Report 2023/24

Appendix – Fiscal Plan Update

Table A6 Revenue by Source Supplementary Information – 2016/17 to 2025/26 ¹

	Actual 2016/17	Actual 2017/18	Actual 2018/19		Actual 2019/20	Actual 2020/21	Actual 2021/22	Actual 2022/23	Updated Forecast 2023/24	Plan 2024/25	Plan 2025/26	Average annual change
												(per cent)
Per cent of nominal GDP: 2
Taxation and Medical Services Plan premiums	11.2	10.8		11.5	11.1	11.1	11.6	12.5	11.2	11.7	11.3	0.1
Taxation	10.3	10.0		11.0	10.8	11.1	11.6	12.5	11.2	11.7	11.3	1.1
Medical Services Plan premiums	1.0	0.8		0.5	0.3	-	-	-	-	-	-	n/a
Natural resources	1.0	1.0		1.0	0.7	0.8	1.3	1.6	0.8	0.9	0.9	-2.1
Other	4.2	3.9		3.4	3.5	2.8	2.8	2.7	2.6	2.6	2.5	-5.3
Other excluding
Medical Services Plan premiums	3.2	3.1		3.0	3.1	2.8	2.8	2.7	2.6	2.6	2.5	-2.4
Contributions from the federal government	3.1	3.2		3.0	3.1	4.2	3.4	3.2	3.3	3.3	3.2	0.2
Commercial Crown corporation net income	1.0	0.4		0.7	0.9	1.3	1.5	0.8	0.9	1.0	0.9	-0.4
Total revenue	19.5	18.4		19.2	19.0	20.3	20.6	20.8	18.9	19.4	18.8	-0.4
Growth rates (per cent):
Taxation	11.4	4.5		15.5	1.7	2.7	19.2	20.4	-7.8	7.7	0.8	n/a
Natural resources	5.4	-0.6		15.3	-27.0	6.0	86.1	38.6	-45.4	6.2	2.8	n/a
Other	5.9	-0.5		-5.9	4.1	-18.2	12.3	9.1	-0.2	1.5	2.1	n/a
Other excluding
Medical Services Plan premiums	6.1	2.8		3.0	8.1	-9.1	12.2	9.1	-0.2	1.5	2.1	n/a
Contributions from the federal government	6.8	10.9		0.0	5.3	35.2	-7.1	4.6	7.7	1.2	0.4	n/a
Commercial Crown corporation net income	-6.8	-58.2		89.9	45.5	35.8	36.8	-42.9	12.7	14.1	0.9	n/a
Total revenue	8.1	1.1		9.8	2.7	6.0	16.5	12.6	-6.5	5.9	1.0	n/a
Per capita ($): 3
Taxation	5,576	5,745		6,529	6,529	6,627	7,827	9,216	8,231	8,618	8,540	4.9
Natural resources	558	547		620	445	466	859	1,165	616	636	643	1.6
Other	2,254	2,210		2,046	2,095	1,693	1,884	2,009	1,943	1,917	1,924	-1.7
Other excluding
Medical Services Plan premiums	1,728	1,750		1,774	1,886	1,694	1,884	2,010	1,943	1,917	1,924	1.2
Contributions from the federal government	1,681	1,837		1,807	1,872	2,501	2,303	2,355	2,457	2,418	2,386	4.0
Commercial Crown corporation net income	520	214		400	573	769	1,043	582	636	706	700	3.4
Total revenue	10,588	10,553		11,402	11,514	12,056	13,915	15,328	13,884	14,295	14,192	3.3
Real Per Capita Revenue (2022 $) 4	11,773	12,284		12,920	12,749	13,249	14,876	15,328	13,361	13,420	13,040	1.1
Growth rate (per cent)	4.3	4.3		5.2	-1.3	3.9	12.3	3.0	-12.8	0.4	-2.8	1.7

¹ Numbers may not add due to rounding.

² Revenue as a per cent of GDP is calculated using nominal GDP for the calendar year ending in the fiscal year (e.g. 2023/24 revenue divided by nominal GDP for the 2023 calendar year).

³ Per capita revenue is calculated using July 1 population (e.g. 2023/24 revenue divided by population on July 1, 2023).

⁴ Revenue is converted to real (inflation-adjusted) terms using the consumer price index (CPI) for the corresponding calendar year (e.g. 2023 CPI for 2023/24 revenue).

First Quarterly Report 2023/24 |   67

Appendix – Fiscal Plan Update

Table A7 Expense by Function – 2016/17 to 2025/26 ^1,2

($ millions)	Actual 2016/17	Actual 2017/18	Actual 2018/19		Actual 2019/20	Actual 2020/21	Actual 2021/22	Actual 2022/23	Updated Forecast 2023/24	Plan 2024/25	Plan 2025/26	Average annual change
												(per cent)
Function:
Health:
Medical Services Plan	4,573	4,623		4,861	5,013	5,145	5,776	6,006	7,081	7,382	7,323	5.4
Pharmacare	1,284	1,400		1,494	1,517	1,501	1,579	1,711	1,728	1,760	1,747	3.5
Regional services	13,086	14,101		15,004	16,054	18,290	19,574	21,715	21,040	21,768	22,668	6.3
Other healthcare expenses	753	810		800	872	677	662	890	1,107	1,136	1,121	4.5
Total health	19,696	20,934		22,159	23,456	25,613	27,591	30,322	30,956	32,046	32,859	5.9
Education:
Elementary and secondary	6,423	6,919		7,254	7,584	7,444	8,085	8,585	9,037	9,348	9,247	4.1
Post-secondary	5,677	6,002		6,398	6,846	6,872	7,357	7,517	8,361	8,627	8,999	5.3
Other education expenses	374	176		442	310	632	359	889	464	459	462	2.4
Total education	12,474	13,097		14,094	14,740	14,948	15,801	16,991	17,862	18,435	18,709	4.6
Social services:
Social assistance	1,692	1,988		2,202	2,342	3,141	2,910	3,157	3,160	3,234	3,261	7.6
Child welfare	1,358	1,507		1,652	1,940	2,226	2,254	3,168	3,638	3,709	3,707	11.8
Low income tax credit transfers	244	239		414	435	1,131	754	1,746	807	1,082	1,373	21.2
Community living and other services	949	1,003		1,075	1,170	1,291	1,350	1,581	1,543	1,601	1,661	6.4
Total social services	4,243	4,737		5,343	5,887	7,789	7,268	9,652	9,148	9,626	10,002	10.0
Protection of persons and property	1,655	1,930		2,004	2,126	2,258	2,937	3,483	2,319	2,352	2,364	4.0
Transportation	1,784	1,931		2,021	2,126	3,362	4,453	3,319	2,634	2,551	2,592	4.2
Natural resources & economic development	2,465	3,374		3,825	3,778	4,191	5,213	6,284	5,161	4,187	4,244	6.2
Other	2,281	1,574		1,831	2,525	2,861	3,082	5,736	3,437	3,530	3,394	4.5
Contingencies - general programs and CleanBC	-	-		-	-	-	-	-	2,300	2,200	2,000	n/a
Contingencies - Shared Recovery Mandate	-	-		-	-	-	-	-	2,200	2,600	2,700	n/a
Pandemic Recovery Contingencies	-	-		-	-	-	-	-	1,000	-	-	n/a
General government	1,536	1,544		1,673	1,657	3,919	2,040	2,326	1,931	1,923	1,936	2.6
Debt servicing	2,587	2,623		2,684	2,727	2,722	2,742	2,719	3,254	3,933	4,371	6.0
Total expense	48,721	51,744		55,634	59,022	67,663	71,127	80,832	82,202	83,383	85,171
Per cent of operating expense:
Health	40.4	40.5		39.8	39.7	37.9	38.8	37.5	37.7	38.4	38.6	-0.5
Education	25.6	25.3		25.3	25.0	22.1	22.2	21.0	21.7	22.1	22.0	-1.7
Social services	8.7	9.2		9.6	10.0	11.5	10.2	11.9	11.1	11.5	11.7	3.4
Protection of persons and property	3.4	3.7		3.6	3.6	3.3	4.1	4.3	2.8	2.8	2.8	-2.2
Transportation	3.7	3.7		3.6	3.6	5.0	6.3	4.1	3.2	3.1	3.0	-2.0
Natural resources & economic development	5.1	6.5		6.9	6.4	6.2	7.3	7.8	6.3	5.0	5.0	-0.2
Other	4.7	3.0		3.3	4.3	4.2	4.3	7.1	4.2	4.2	4.0	-1.8
Contingencies - general programs and CleanBC	-	-		-	-	-	-	-	2.8	2.6	2.3	n/a
Contingencies - Shared Recovery Mandate	-	-		-	-	-	-	-	2.7	3.1	3.2	n/a
Pandemic Recovery Contingencies	-	-		-	-	-	-	-	1.2	-	-	n/a
General government	3.2	3.0		3.0	2.8	5.8	2.9	2.9	2.3	2.3	2.3	-3.6
Debt servicing	5.3	5.1		4.8	4.6	4.0	3.9	3.4	4.0	4.7	5.1	-0.4
Operating expense	100.0	100.0		100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0

¹ Figures reflect government accounting policies used in the 2022/23 Public Accounts audited financial statements.

² Numbers may not add due to rounding.

68  | First Quarterly Report 2023/24

Appendix – Fiscal Plan Update

Table A8 Expense by Function Supplementary Information – 2016/17 to 2025/26 ¹

	Actual 2016/17	Actual 2017/18	Actual 2018/19	Actual 2019/20	Actual 2020/21	Actual 2021/22	Actual 2022/23	Updated Forecast 2023/24	Plan 2024/25	Plan 2025/26	Average annual change
											(per cent)
Per cent of nominal GDP: 2
Health	7.5	7.4	7.5	7.6	8.3	7.9	7.7	7.7	7.7	7.6		0.2
Education	4.7	4.6	4.7	4.8	4.9	4.5	4.3	4.4	4.4	4.3		-1.0
Social services	1.6	1.7	1.8	1.9	2.5	2.1	2.5	2.3	2.3	2.3		4.1
Protection of persons and property	0.6	0.7	0.7	0.7	0.7	0.8	0.9	0.6	0.6	0.5		-1.5
Transportation	0.7	0.7	0.7	0.7	1.1	1.3	0.8	0.7	0.6	0.6		-1.4
Natural resources & economic development	0.9	1.2	1.3	1.2	1.4	1.5	1.6	1.3	1.0	1.0		0.5
Other	0.9	0.6	0.6	0.8	0.9	0.9	1.5	0.9	0.8	0.8		-1.1
Contingencies - general programs and CleanBC	-	-	-	-	-	-	-	0.6	0.5	0.5		n/a
Contingencies - Shared Recovery Mandate	-	-	-	-	-	-	-	0.6	0.7	0.8		n/a
Pandemic Recovery Contingencies	-	-	-	-	-	-	-	0.3	-	-		n/a
General government	0.6	0.5	0.6	0.5	1.3	0.6	0.6	0.5	0.5	0.4		-2.9
Debt servicing	1.0	0.9	0.9	0.9	0.9	0.8	0.7	0.8	0.9	1.0		0.3
Operating expense	18.5	18.3	18.7	19.1	22.0	20.3	20.6	20.5	20.1	19.8		0.8
Growth rates (per cent):
Health	2.6	6.3	5.9	5.9	9.2	7.7	9.9	2.1	3.5	2.5		n/a
Education	2.1	5.0	7.6	4.6	1.4	5.7	7.5	5.1	3.2	1.5		n/a
Social services	3.3	11.6	12.8	10.2	32.3	-6.7	32.8	-5.2	5.2	3.9		n/a
Protection of persons and property	5.3	16.6	3.8	6.1	6.2	30.1	18.6	-33.4	1.4	0.5		n/a
Transportation	6.8	8.2	4.7	5.2	58.1	32.5	-25.5	-20.6	-3.2	1.6		n/a
Natural resources & economic development	-0.5	36.9	13.4	-1.2	10.9	24.4	20.5	-17.9	-18.9	1.4		n/a
Other	80.5	-31.0	16.3	37.9	13.3	7.7	86.1	-40.1	2.7	-3.9		n/a
Contingencies - general programs and CleanBC	-	-	-	-	-	-	-	-	-4.3	-9.1		n/a
Contingencies - Shared Recovery Mandate	-	-	-	-	-	-	-	-	18.2	3.8		n/a
Pandemic Recovery Contingencies	-	-	-	-	-	-	-	-	-100.0	-		n/a
General government	2.3	0.5	8.4	-1.0	136.5	-47.9	14.0	-17.0	-0.4	0.7		n/a
Debt servicing	-8.5	1.4	2.3	1.6	-0.2	0.7	-0.8	19.7	20.9	11.1		n/a
Operating expense	4.0	6.2	7.5	6.1	14.6	5.1	13.6	1.7	1.4	2.1		n/a
Per capita ($): 3
Health	4,053	4,247	4,423	4,604	4,968	5,304	5,700	5,638	5,674	5,720		3.9
Education	2,567	2,657	2,813	2,893	2,899	3,037	3,194	3,253	3,264	3,257		2.7
Social services	873	961	1,066	1,155	1,511	1,397	1,815	1,666	1,704	1,741		8.0
Protection of persons and property	341	392	400	417	438	565	655	422	416	411		2.1
Transportation	367	392	403	417	652	856	624	480	452	451		2.3
Natural resources & economic development	507	684	763	742	813	1,002	1,181	940	741	739		4.3
Other	469	319	365	496	555	592	1,078	626	625	591		2.6
Contingencies - general programs and CleanBC	-	-	-	-	-	-	-	419	390	348		n/a
Contingencies - Shared Recovery Mandate	-	-	-	-	-	-	-	401	460	470		n/a
Pandemic Recovery Contingencies	-	-	-	-	-	-	-	182	-	-		n/a
General government	316	313	334	325	760	392	437	352	340	337		0.7
Debt servicing	532	532	536	535	528	527	511	593	696	761		4.1
Operating expense	10,025	10,497	11,103	11,584	13,124	13,672	15,195	14,972	14,762	14,826		4.4
Real Per Capita Operating Expense (2022 $) 4	11,919	12,219	12,582	12,828	14,424	14,616	15,195	14,408	13,860	13,621		1.5
Growth rate (per cent)	0.4	2.5	3.0	2.0	12.4	1.3	4.0	-5.2	-3.8	-1.7		1.5

¹ Numbers may not add due to rounding.

² Expense as a per cent of GDP is calculated using nominal GDP for the calendar year ending in the fiscal year (e.g. 2023/24 expense divided by nominal GDP for the 2023 calendar year).

³ Per capita expense is calculated using July 1 population (e.g. 2023/24 expense divided by population on July 1, 2023).

⁴ Expense is converted to real (inflation-adjusted) terms using the consumer price index (CPI) for the corresponding calendar year (e.g. 2023 CPI for 2023/24 expense).

First Quarterly Report 2023/24 |  69

Appendix – Fiscal Plan Update

Table A9 Full-Time Equivalents (FTEs) – 2016/17 to 2025/2026 ¹

	Actual 2016/17	Actual 2017/18	Actual 2018/19	Actual 2019/20	Actual 2020/21	Actual 2021/22	Actual 2022/23	Updated Forecast 2023/24	Plan 2024/25	Plan 2025/26	Average annual change
											(per cent)
Taxpayer-supported programs and agencies:
Ministries and special offices (CRF)	27,940	29,291	30,891	31,774	32,672	33,400	33,696	35,500	36,000	36,000		2.9
Service delivery agencies 2	4,850	5,076	5,258	5,985	6,042	6,767	7,746	9,023	9,217	9,396		7.6
Total FTEs	32,790	34,367	36,149	37,759	38,714	40,167	41,442	44,523	45,217	45,396		3.7
Growth rates (per cent):
Ministries and special offices (CRF)	2.8	4.8	5.5	2.9	2.8	2.2	0.9	6.3	1.4	0.0		3.0
Service delivery agencies	1.0	4.7	3.6	13.8	1.0	12.0	14.5	33.3	2.2	1.9		8.8
Population per FTE: 3
Total FTEs	148.2	143.4	138.6	134.9	133.2	129.5	128.4	123.3	124.9	126.6		-1.7

¹ Full-time equivalents (FTEs) are a measure of staff employment. FTEs are calculated by dividing the total hours of employment paid for in a given period by the number of hours an individual, full-time person would normally work in that period. This does not equate to the physical number of employees. For example, two half-time employees would equal one FTE, or alternatively, three FTEs may represent two full-time employees who have worked sufficient overtime hours to equal an additional FTE.

² Service delivery agency FTE amounts do not include SUCH sector staff employment.

³ Population per FTE is calculated using July 1 population (e.g. population on July 1, 2023 divided by 2023/24 FTEs).

70  | First Quarterly Report 2023/24

Appendix – Fiscal Plan Update

Table A10 Capital Spending – 2016/17 to 2025/26

($ millions)	Actual 2016/17	Actual 2017/18	Actual 2018/19	Actual 2019/20	Actual 2020/21	Actual 2021/22	Actual 2022/23	Updated Forecast 2023/24	Plan 2024/25	Plan 2025/26	Average annual change
											(per cent)
Taxpayer-supported:
Education
Schools districts	474	578	626	877	944	1,001	934	990	1,038	1,312	12.0
Post-secondary institutions	792	968	1,024	936	904	899	1,071	1,683	1,697	1,436	6.8
Health	1,004	890	904	1,009	1,162	1,555	1,915	3,531	3,802	4,434	17.9
BC Transportation Financing Authority 1	823	717	853	955	1,285	1,364	1,823	3,968	4,188	4,140	19.7
BC Transit	41	115	85	73	107	67	100	208	507	519	32.6
Government direct (ministries)	301	430	421	520	389	386	470	699	526	459	4.8
Social Housing	184	169	483	355	572	642	357	941	703	698	16.0
Other	40	41	56	47	65	88	85	160	178	78	7.7
Total taxpayer-supported	3,659	3,908	4,452	4,772	5,428	6,002	6,755	12,180	12,639	13,076	15.2
Self-supported:
BC Hydro	2,444	2,473	3,826	3,082	3,207	3,475	3,919	3,861	3,924	2,653	0.9
Columbia Basin power projects	2	1	2	994	7	9	10	9	10	21	29.9
Transportation Investment Corporation 1	38	4	-	-	-	-	-	-	-	-	n/a
BC Railway Company	4	11	33	6	1	2	6	7	7	3	-3.1
ICBC	62	54	66	62	100	54	41	65	42	49	-2.6
BC Lottery Corporation 2	86	82	75	102	73	90	95	103	100	100	1.7
Liquor Distribution Branch	27	48	60	36	22	22	16	28	34	27	0.0
Other 3	62	56	44	104	65	78	78	-	-	-	n/a
Total self-supported	2,725	2,729	4,106	4,386	3,475	3,730	4,165	4,073	4,117	2,853	0.5
Total capital spending	6,384	6,637	8,558	9,158	8,903	9,732	10,920	16,253	16,756	15,929	10.7
Per cent of nominal GDP: 4
Taxpayer-supported	1.4	1.4	1.5	1.5	1.8	1.7	1.7	3.0	3.0	3.0	9.0
Self-supported	1.0	1.0	1.4	1.4	1.1	1.1	1.1	1.0	1.0	0.7	-4.9
Total	2.4	2.4	2.9	3.0	2.9	2.8	2.8	4.0	4.0	3.7	4.7
Growth rates:
Taxpayer-supported	5.8	6.8	13.9	7.2	13.7	10.6	12.5	80.3	3.8	3.5	15.8
Self-supported	5.9	0.1	50.5	6.8	-20.8	7.3	11.7	-2.2	1.1	-30.7	3.0
Total	5.8	4.0	28.9	7.0	-2.8	9.3	12.2	48.8	3.1	-4.9	11.1
Per capita: 5
Taxpayer-supported	753	793	889	937	1,053	1,154	1,270	2,218	2,238	2,276	13.1
Self-supported	561	554	819	861	674	717	783	742	729	497	-1.3
Total	1,314	1,346	1,708	1,798	1,727	1,871	2,053	2,960	2,967	2,773	8.7
Real Per Capita Capital Spending (2022 $) 6	1,562	1,567	1,935	1,990	1,898	2,000	2,053	2,849	2,785	2,547	5.6
Growth rate (per cent)	2.2	0.4	23.5	2.8	-4.7	5.4	2.7	38.8	-2.2	-8.5	6.0

¹ Includes Transportation Investment Plan capital spending and, beginning in 2017/18, Transportation Investment Corporation rehabilitation costs for the Port Mann Bridge due to reclassification from self-supported commercial Crown corporation to a taxpayer-supported agency in response to the cancellation of tolls. Effective April 1, 2018, Transportation Investment Corporation became a subsidiary of BCTFA.

² Forecasted amounts exclude right-of-use assets.

³ Includes post-secondary institutions’ self-supported subsidiaries.

⁴ Capital spending as a per cent of GDP is calculated using nominal GDP for the calendar year ending in the fiscal year (e.g. 2023/24 amounts divided by nominal GDP for the 2023 calendar year).

⁵ Per capita capital spending is calculated using July 1 population (e.g. 2023/24 amounts divided by population on July 1, 2023).

⁶ Capital spending is converted to real (inflation-adjusted) terms using the consumer price index (CPI) for the corresponding calendar year (e.g. 2023 CPI for 2023/24 capital spending).

First Quarterly Report 2023/24 |  71

Appendix – Fiscal Plan Update

Table A11 Statement of Financial Position – 2016/17 to 2025/26 ¹

($ millions)	Actual 2016/17		Actual 2017/18		Actual 2018/19		Actual 2019/20		Actual 2020/21		Actual 2021/22		Actual 2022/23		Updated Forecast 2023/24		Plan 2024/25		Plan 2025/26		Average annual change
																					(per cent)
Financial assets:
Cash and temporary investments	4,232		3,440		3,029		3,985		6,560		7,142		8,247		2,961		4,103		3,215			-2.5
Other financial assets 2	10,209		11,740		12,637		12,404		15,410		17,105		19,077		16,492		18,158		19,466			6.0
Sinking funds	1,087		1,348		752		692		492		510		521		485		532		352			-9.7
Investments in commercial Crown corporations:	7,517		6,134		5,738		6,523		9,632		12,223		12,634		13,349		14,528		15,707			6.9
Retained earnings
Recoverable capital loans	23,809		20,534		22,547		24,768		26,301		27,218		28,145		30,147		32,172		33,359			3.1
	31,326		26,668		28,285		31,291		35,933		39,441		40,779		43,496		46,700		49,066			4.2
Total financial assets	46,854		43,196		44,703		48,372		58,395		64,198		68,624		63,434		69,493		72,099			4.0
Liabilities:
Accounts payable, accrued liabilities & others 2	10,521		11,278		12,137		13,101		14,733		18,509		25,402		22,305		23,976		24,900			8.1
Deferred revenue	9,665		10,068		10,543		10,651		12,211		13,379		15,005		16,068		17,143		18,194			5.9
Debt:	41,499		43,607		42,681		46,229		59,750		62,341		59,934		70,772		84,737		98,130			8.1
Taxpayer-supported debt
Self-supported debt	24,338		21,312		23,281		25,932		27,350		28,325		29,492		31,562		34,092		34,713			3.3
Forecast allowance	-		-		-		-		-		-		-		700		500		500
Total provincial debt	65,837		64,919		65,962		72,161		87,100		90,666		89,426		103,034		119,329		133,343			6.6
Add:  debt offset by sinking funds	1,087		1,348		752		692		492		510		521		485		532		352			-9.7
Add:  foreign exchange adjustments	-		-		-		-		-		-		472		-		-		n/a
Less:  guarantees & non-guaranteed debt	(835	)	(896	)	(850	)	(1,337	)	(1,335	)	(1,402	)	(1,523	)	(1,415	)	(1,380	)	(1,355	)		4.5
Financial statement debt	66,089		65,371		65,864		71,516		86,257		89,774		88,896		102,104		118,481		132,340			6.5
Total liabilities	86,275		86,717		88,544		95,268		113,201		121,662		129,303		140,477		159,600		175,434			6.7
Net liabilities	(39,421	)	(43,521	)	(43,841	)	(46,896	)	(54,806	)	(57,464	)	(60,679	)	(77,043	)	(90,107	)	(103,335	)		9.2
Capital and other assets:
Tangible capital assets	41,375		45,908		47,902		50,095		52,851		56,133		59,811		69,032		78,450		88,037			7.1
Restricted assets	1,695		1,768		1,834		1,931		2,003		2,147		2,224		2,313		2,382		2,452			3.4
Other assets	1,126		932		952		1,100		1,582		1,791		1,347		1,727		2,157		1,591			3.2
Total capital and other assets	44,196		48,608		50,688		53,126		56,436		60,071		63,382		73,072		82,989		92,080			6.9
Accumulated surplus (deficit)	4,775		5,087		6,847		6,230		1,630		2,607		2,703		(3,971	)	(7,118	)	(11,255	)
Per cent of Nominal GDP: 3
Net liabilities	14.9		15.4		14.7		15.2		17.9		16.4		15.5		19.1		21.6		23.8			4.3
Capital and other assets	16.7		17.2		17.0		17.2		18.4		17.1		16.2		18.1		19.9		21.2			2.2
Growth rates:
Net liabilities	-4.3		10.4		0.7		7.0		16.9		4.8		5.6		27.0		17.0		14.7			n/a
Capital and other assets	2.7		10.0		4.3		4.8		6.2		6.4		5.5		15.3		13.6		11.0			n/a
Per capita: 4
Net liabilities	8,113		8,829		8,750		9,205		10,631		11,046		11,407		14,032		15,954		17,987			7.5
Capital and other assets	9,095		9,861		10,116		10,428		10,947		11,547		11,915		13,309		14,694		16,028			5.3

¹ Figures have been restated to reflect government’s current accounting policies.

² Forecast includes $663 million derivative assets in other financial assets and $1,031 million derivative liabilities in other liabilities.

³ Net liabilities as a per cent of GDP is calculated using nominal GDP for the calendar year ending in the fiscal year (e.g. 2023/24 amount divided by GDP for the 2023 calendar year).

⁴ Per capita net liabilities is calculated using July 1 population (e.g. 2023/24 amount divided by population on July 1, 2023).

72  | First Quarterly Report 2023/24

Appendix – Fiscal Plan Update

Table A12 Changes in Financial Position – 2016/17 to 2025/26

($ millions)	Actual 2016/17		Actual 2017/18		Actual 2018/19		Actual 2019/20		Actual 2021/22		Actual 2021/22		Actual 2022/23		Updated Forecast 2023/24		Plan 2024/25		Plan 2025/26		10-Year Total
(Surplus) deficit for the year	(2,728	)	(276	)	(1,494	)	362		5,507		(1,265	)	(704	)	6,674		3,147		4,137		13,360
Change in remeasurement (gains) losses	(236	)	(36	)	(266	)	255		(907	)	288		608		-		-		-		(294	)
Change in accumulated (surplus) deficit	(2,964	)	(312	)	(1,760	)	617		4,600		(977	)	(96	)	6,674		3,147		4,137		13,066
Capital and other asset changes:
Taxpayer-supported capital investments	3,659		3,908		4,452		4,772		5,428		6,002		6,755		12,180		12,639		13,076		72,871
Less:  amortization and other accounting changes	(2,638	)	625		(2,458	)	(2,579	)	(2,672	)	(2,720	)	(3,077	)	(2,959	)	(3,221	)	(3,489	)	(25,188	)
Increase in net capital assets	1,021		4,533		1,994		2,193		2,756		3,282		3,678		9,221		9,418		9,587		47,683
Increase (decrease) in restricted assets	64		73		66		97		72		144		77		89		69		70		821
Increase (decrease) in other assets	87		(194	)	20		148		482		209		(444	)	380		430		(566	)	552
Change in capital and other assets	1,172		4,412		2,080		2,438		3,310		3,635		3,311		9,690		9,917		9,091		49,056
Increase (decrease) in net liabilities	(1,792	)	4,100		320		3,055		7,910		2,658		3,215		16,364		13,064		13,228		62,122
Investment and working capital changes:
Investment in commercial Crown corporations:
Increase (decrease) in retained earnings	(20	)	(1,383	)	(396	)	785		3,109		2,591		411		715		1,179		1,179		8,170
Self-supported capital investments	2,725		2,729		4,106		4,386		3,475		3,730		4,165		4,073		4,117		2,853		36,359
Less:  loan repayments and other accounting changes	(957	)	(6,004	)	(2,093	)	(2,165	)	(1,942	)	(2,813	)	(3,238	)	(2,071	)	(2,092	)	(1,666	)	(25,041	)
Change in investment	1,748		(4,658	)	1,617		3,006		4,642		3,508		1,338		2,717		3,204		2,366		19,488
Increase (decrease) in cash and temporary investments	340		(792	)	(411	)	956		2,575		582		1,105		(5,286	)	1,142		(888	)	(677	)
Other working capital changes 1	(218	)	632		(1,033	)	(1,365	)	(386	)	(3,231	)	(6,536	)	(587	)	(1,033	)	(847	)	(14,604	)
Change in investment and working capital	1,870		(4,818	)	173		2,597		6,831		859		(4,093	)	(3,156	)	3,313		631		4,207
Increase (decrease) in financial statement debt	78		(718	)	493		5,652		14,741		3,517		(878	)	13,208		16,377		13,859		66,329
(Increase) decrease in sinking fund debt	493		(261	)	596		60		200		(18	)	(11	)	36		(47	)	180		1,228
(Increase) decrease in foreign exchange	-		-		-		-		-		(472	)	472		-		-		-
Increase (decrease) in guarantees	(23	)	(188	)	(2	)	57		113		9		(119	)	(176	)	(540	)	541		(328	)
Increase (decrease) in non-guaranteed debt	38		249		(44	)	430		(115	)	58		240		68		505		(566	)	863
Increase (decrease) in total provincial debt	586		(918	)	1,043		6,199		14,939		3,566		(1,240	)	13,608		16,295		14,014		68,092
Represented by increase (decrease) in:
Taxpayer-supported debt	(1,220	)	2,108		(926	)	3,548		13,521		2,591		(2,407	)	10,838		13,965		13,393		55,411
Self-supported debt	1,806		(3,026	)	1,969		2,651		1,418		975		1,167		2,070		2,530		621		12,181
Forecast allowance	-		-		-		-		-		-		-		700		(200	)	-		500
Total provincial debt	586		(918	)	1,043		6,199		14,939		3,566		(1,240	)	13,608		16,295		14,014		68,092

¹ Includes changes in other financial assets, sinking funds, accounts payable, deferred revenue and other accrued liabilities.

First Quarterly Report 2023/24  |  73

Appendix – Fiscal Plan Update

Table A13 Provincial Debt – 2016/17 to 2025/26

($ millions)	Actual 2016/17	Actual 2017/18	Actual 2018/19	Actual 2019/20	Actual 2020/21	Actual 2021/22	Actual 2022/23	Updated Forecast 2023/24	Plan 2024/25	Plan 2025/26	Average annual change
											(per cent)
Taxpayer-supported debt:
Provincial government
Operating	4,644	1,156	-	-	8,746	7,233	-	1,871	4,131	5,860		2.6
Capital 2
K-12 education	8,454	8,891	8,885	9,757	10,529	11,342	10,893	11,614	12,465	13,479		5.3
Post-secondary institutions	4,285	4,584	4,607	4,917	5,426	5,732	5,502	6,156	7,073	7,822		6.9
Health facilities	5,835	6,141	6,173	6,705	7,484	8,223	8,286	9,988	12,773	15,991		11.9
Ministries general capital	2,288	2,718	2,363	3,133	3,702	4,087	4,549	5,109	5,559	5,972		11.2
Transportation	2,174	5,682	5,401	5,401	5,401	5,401	5,391	5,392	5,393	5,395		10.6
Social housing	449	619	619	805	1,062	1,424	1,648	2,110	2,624	3,165		24.2
Other	242	242	242	252	268	278	269	370	493	528		9.1
Total capital	23,727	28,877	28,290	30,970	33,872	36,487	36,538	40,739	46,380	52,352		9.2
Total provincial government	28,371	30,033	28,290	30,970	42,618	43,720	36,538	42,610	50,511	58,212		8.3
Taxpayer-supported entities:
BC Pavilion Corporation	143	141	138	135	132	129	126	123	120	116		-2.3
BC Transit	94	84	73	65	60	56	53	97	215	349		15.7
BC Transportation Financing Authority	9,974	10,388	11,293	12,193	13,321	14,615	18,992	22,930	27,620	32,330		14.0
Health Authorities and Hospital Societies	1,717	1,762	1,795	1,802	1,875	1,839	1,983	2,380	2,332	2,281		3.2
InBC Investment Corp.	217	161	70	45	37	19	21	84	188	304		3.8
Post-secondary institutions	699	744	763	753	882	922	910	944	1,025	1,029		4.4
School districts	19	17	19	18	24	25	21	17	13	8		-9.2
Social housing	246	259	225	222	770	974	1,241	1,566	2,694	3,484		34.2
Other	19	18	15	26	31	42	49	21	19	17		-1.4
Total taxpayer-supported entities	13,128	13,574	14,391	15,259	17,132	18,621	23,396	28,162	34,226	39,918		13.2
Total taxpayer-supported debt	41,499	43,607	42,681	46,229	59,750	62,341	59,934	70,772	84,737	98,130		10.0
Self-supported debt:
Commercial Crown corporations and agencies
BC Hydro	19,685	19,990	22,064	23,238	24,650	25,611	26,707	28,889	31,458	32,098		5.6
BC Liquor Distribution Branch	-	-	-	210	233	230	242	243	245	250		3.0
BC Lottery Corporation	145	155	100	233	228	195	201	121	109	110		-3.0
Columbia Basin power projects	448	433	418	1,387	1,349	1,319	1,298	1,271	1,242	1,210		11.7
Columbia Power Corporation	291	286	282	276	271	266	270	264	259	253		-1.6
Post-secondary institution subsidiaries	340	418	387	504	520	615	685	677	677	677		8.0
Transportation Investment Corporation 1	3,398	-	-	-	-	-	-	-	-	-		n/a
Other	31	30	30	84	99	89	89	97	103	115		15.7
Total self-supported debt	24,338	21,312	23,281	25,932	27,350	28,325	29,492	31,562	34,092	34,713		4.0
Forecast allowance	-	-	-	-	-	-	-	700	500	500		n/a
Total provincial debt	65,837	64,919	65,962	72,161	87,100	90,666	89,426	103,034	119,329	133,343		8.2

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

² Includes debt incurred by the government to fund the building and construction of capital assets in the education, health, social housing and other sectors.

74  | First Quarterly Report 2023/24

Appendix – Fiscal Plan Update

Table A14 Provincial Debt Supplementary Information – 2016/17 to 2025/26 ¹

($ millions)	Actual 2016/17	Actual 2017/18	Actual 2018/19	Actual 2019/20	Actual 2020/21	Actual 2021/22	Actual 2022/23	Updated Forecast 2023/24	Plan 2024/25	Plan 2025/26	Average annual change
											(per cent)
Per cent of nominal GDP: 2
Taxpayer-supported debt:
Provincial government direct operating	1.8	0.4	-	-	2.8	2.1	-	0.5	1.0	1.4	-2.9
Provincial government capital	9.0	10.2	9.5	10.0	11.0	10.4	9.3	10.1	11.1	12.1	3.3
Total provincial government	10.8	10.6	9.5	10.0	13.9	12.5	9.3	10.6	12.1	13.4	2.5
Taxpayer-supported entities	5.0	4.8	4.8	4.9	5.6	5.3	6.0	7.0	8.2	9.2	7.1
Total taxpayer-supported debt	15.7	15.4	14.4	15.0	19.5	17.8	15.3	17.6	20.3	22.6	4.1
Self-supported debt:
Commercial Crown corporations & agencies	9.2	7.6	7.8	8.4	8.9	8.1	7.5	7.8	8.2	8.0	-1.6
Total provincial debt	24.9	23.0	22.2	23.4	28.4	25.9	22.8	25.6	28.7	30.7	2.3
Growth rates (per cent):
Taxpayer-supported debt:
Provincial government direct operating	-42.2	-75.1	-100.0	-	-	-17.3	-100.0	-	120.8	41.9	-16.9
Provincial government capital	6.3	21.7	-2.0	9.5	9.4	7.7	0.1	11.5	13.8	12.9	8.8
Taxpayer-supported entities	6.2	3.4	6.0	6.0	12.3	8.7	25.6	20.4	21.5	16.6	12.2
Total taxpayer-supported debt	-2.9	5.1	-2.1	8.3	29.2	4.3	-3.9	18.1	19.7	15.8	8.5
Self-supported debt:
Commercial Crown corporations & agencies	8.0	-12.4	9.2	11.4	5.5	3.6	4.1	7.0	8.0	1.8	4.8
Total provincial debt	0.9	-1.4	1.6	9.4	20.7	4.1	-1.4	15.2	15.8	11.7	7.3
Per capita: 3
Taxpayer-supported debt:
Provincial government direct operating	956	235	-	-	1,696	1,390	-	341	731	1,020	0.7
Provincial government capital	4,883	5,858	5,646	6,079	6,570	7,014	6,869	7,420	8,212	9,113	7.2
Taxpayer-supported entities	2,702	2,754	2,872	2,995	3,323	3,579	4,398	5,129	6,060	6,948	11.1
Total taxpayer-supported debt	8,540	8,846	8,518	9,074	11,590	11,983	11,267	12,890	15,003	17,081	8.0
Self-supported debt:
Commercial Crown corporations & agencies	5,009	4,323	4,646	5,090	5,305	5,445	5,544	5,749	6,036	6,042	2.1
Total provincial debt	13,549	13,170	13,165	14,164	16,895	17,428	16,812	18,766	21,128	23,211	6.2
Real Per Capita Provincial Debt (2022 $) 4	16,106	15,330	14,918	15,684	18,566	18,631	16,812	18,059	19,834	21,325	3.2
Growth rate (per cent)	4.1	-4.8	-2.7	5.1	18.4	0.4	-9.8	7.4	9.8	7.5	3.3

¹ Numbers may not add due to rounding.

² Debt as a per cent of GDP is calculated using nominal GDP for the calendar year ending in the fiscal year (e.g. 2023/24 debt divided by nominal GDP for the 2023 calendar year).

³ Per capita debt is calculated using July 1 population (e.g. 2023/24 debt divided by population on July 1, 2023).

⁴ Debt is converted to real (inflation-adjusted) terms using the consumer price index (CPI) for the corresponding calendar year (e.g. 2023 CPI for 2023/24 debt).

First Quarterly Report 2023/24 |  75

Appendix – Fiscal Plan Update

Table A15 Key Provincial Debt Indicators – 2016/17 to 2025/26

	Actual 2016/17	Actual 2017/18	Actual 2018/19	Actual 2019/20	Actual 2020/21	Actual 2021/22	Actual 2022/23	Updated Forecast 2023/24	Plan 2024/25	Plan 2025/26	Average annual change
Debt to revenue (per cent)											(per cent)
Total provincial	99.3	94.7	89.5	95.9	115.1	104.3	90.6	111.8	122.9	133.6	3.4
Taxpayer-supported	81.8	82.5	75.0	80.6	101.2	90.8	74.3	95.5	108.7	124.6	4.8
Debt per capita ($) 1
Total provincial	13,549	13,170	13,165	14,164	16,895	17,428	16,813	18,766	21,128	23,211	6.2
Taxpayer-supported	8,540	8,846	8,518	9,074	11,590	11,983	11,268	12,890	15,004	17,081	8.0
Debt to nominal GDP (per cent) 2
Total provincial	24.9	23.0	22.2	23.4	28.4	25.9	22.8	25.6	28.7	30.7	2.3
Taxpayer-supported	15.7	15.4	14.4	15.0	19.5	17.8	15.3	17.6	20.3	22.6	4.1
Interest bite (cents per dollar of revenue) 3
Total provincial	3.8	4.0	3.8	3.8	3.7	3.3	3.2	3.7	4.1	4.6	2.1
Taxpayer-supported	3.2	3.3	3.2	3.1	3.1	2.8	2.5	3.1	3.6	4.2	2.9
Interest costs ($ millions)
Total provincial	2,521	2,759	2,786	2,893	2,817	2,848	3,114	3,415	4,002	4,553	6.8
Taxpayer-supported	1,644	1,725	1,793	1,807	1,832	1,896	2,030	2,302	2,823	3,313	8.1
Interest rate (per cent) 4
Taxpayer-supported	3.9	4.1	4.2	4.1	3.5	3.1	3.3	3.5	3.6	3.6	-0.8
Background Information:
Revenue ($ millions)
Total provincial 5	66,334	68,551	73,734	75,283	75,691	86,903	98,655	92,119	97,120	99,798	4.6
Taxpayer-supported 6	50,726	52,866	56,881	57,386	59,033	68,658	80,647	74,128	77,961	78,787	5.0
Debt ($ millions)
Total provincial	65,837	64,919	65,962	72,161	87,100	90,666	89,426	103,034	119,329	133,343	8.2
Taxpayer-supported 7	41,499	43,607	42,681	46,229	59,750	62,341	59,934	70,772	84,737	98,130	10.0
Provincial nominal GDP ($ millions) 8	263,912	282,283	297,392	308,993	306,947	350,598	391,669	403,219	416,423	434,159	5.7
Population (thousands at July 1) 9	4,859	4,929	5,010	5,095	5,155	5,202	5,319	5,490	5,648	5,745	1.9

¹ The ratio of debt to population (e.g. 2023/24 debt divided by population at July 1, 2023).

² The 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. 2023/24 debt divided by 2023 nominal GDP).

³ The 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.

⁴ Weighted average of all outstanding debt issues.

⁵ Includes revenue of the consolidated revenue fund (excluding dividends from enterprises) plus revenue of all government organizations and enterprises.

⁶ Excludes revenue of government enterprises, but includes dividends from enterprises paid to the consolidated revenue fund.

⁷ Excludes debt of commercial Crown corporations and agencies and funds held under the province’s warehouse borrowing program.

⁸ Nominal GDP for the calendar year ending in the fiscal year (e.g. nominal GDP for 2023 is used for the fiscal year ended March 31, 2024).

⁹ Population at July 1st within the fiscal year (e.g. population at July 1, 2023 is used for the fiscal year ended March 31, 2024).

76  | First Quarterly Report 2023/24