2003 British Columbia Financial and Economic Review

[Pages:100]2003 British Columbia Financial and Economic

Review

63rd Edition (July 2003)



Ministry of Finance

Table of Contents

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Table of Contents

Introduction........................................................................................................................................................................... 1

General description of the Province ....................................................................................................................... 2 Geography ................................................................................................................................................................ 2 Physiography............................................................................................................................................................ 2 Climate and Vegetation......................................................................................................................................... 2

Chapter One -- Economic Review ................................................................................................................................ 5

2002 Overview ................................................................................................................................................................ 6

External Environment ................................................................................................................................................... 6 U.S. Economy........................................................................................................................................................... 7 Canadian Economy ................................................................................................................................................ 7 International Economy ......................................................................................................................................... 7 Financial Markets.................................................................................................................................................... 7

British Columbia Economy......................................................................................................................................... 9 Real GDP ................................................................................................................................................................... 9 Capital Investment.................................................................................................................................................. 9 Exports ....................................................................................................................................................................... 10 Population and Labour Force Characteristics............................................................................................... 12 Labour and Income Developments ................................................................................................................. 13 Prices and Wages.................................................................................................................................................... 13 Consumer Expenditure and Housing.............................................................................................................. 14

Industrial Structure and Performance ..................................................................................................................... 15 High Tech.................................................................................................................................................................. 16 Tourism ...................................................................................................................................................................... 17

Topic Boxes Energy in British Columbia................................................................................................................................. 18 B.C.'s Economic Development Initiatives...................................................................................................... 20

Charts

1.1 Canadian and British Columbia economic growth........................................................................ 6 1.2 External economic growth ..................................................................................................................... 8 1.3 Short-term interest rates .......................................................................................................................... 8 1.4 British Columbia GDP by component ............................................................................................... 9 1.5 Exports by market, 2002 ......................................................................................................................... 10 1.6 Key commodity prices ............................................................................................................................. 11 1.7 British Columbia population by age and sex, 2002 ...................................................................... 12 1.8 Building permits by activity ................................................................................................................... 14 1.9 Service industries in British Columbia ............................................................................................... 15 1.10 Trends in high technology employment in B.C. ............................................................................ 16 1.11 B.C. Tourism industry .............................................................................................................................. 17 Map 1.1 Net interprovincial and international migration in B.C........................................................ 12

Tables 1.1 1.2

British Columbia Population and Labour Market Statistics ........................................................ 13 Price and Earnings Indices ..................................................................................................................... 14

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Appendix 1 -- Economic Review ................................................................................................................................... 21

Tables A1.1 Summary of Economic Activity for British Columbia ................................................................ 22 A1.2 British Columbia Real GDP at Market Prices, Expenditure Based........................................ 24 A1.3 British Columbia GDP at Basic Prices, by Industry.................................................................... 24 A1.4 British Columbia GDP, Income Based ............................................................................................ 25 A1.5 Employment by Industry in British Columbia.............................................................................. 26 A1.6 Capital Investment by Industry.......................................................................................................... 27 A1.7 British Columbia International Goods Exports by Major Market and Selected Commodities, 2002 ........................................................................................................ 28 A1.8 British Columbia International Goods Exports by Market Area, 2002 ................................ 29 A1.9 Historical Commodity Prices (in U.S. Dollars) ............................................................................. 30 A1.10 British Columbia Forest Sector Economic Activity Indicators ................................................ 31 A1.11 Historical Value of Mineral, Petroleum and Natural Gas Production .................................. 32 A1.12 Petroleum and Natural Gas Activity Indicators............................................................................ 32 A1.13 Supply and Consumption of Electrical Energy in British Columbia .................................... 33 A1.14 British Columbia High-Technology Sector Activity .................................................................... 34

Chapter Two -- Financial Review.................................................................................................................................. 35

2002/03 Overview.......................................................................................................................................................... 36

Consolidated Revenue Fund Revenue ................................................................................................................... 38

Consolidated Revenue Fund Expense.................................................................................................................... 39

Crown Corporation Results ........................................................................................................................................ 45

Full-Time Equivalents (FTEs)..................................................................................................................................... 49

Provincial Capital Spending ....................................................................................................................................... 49

Provincial Debt ............................................................................................................................................................... 50

Credit Rating .................................................................................................................................................................... 53

Debt Indicators ............................................................................................................................................................... 53

Topic Box Ministerial Accountability Report...................................................................................................................... 44

Tables 2.1 2002/03 Operating Results ..................................................................................................................... 36 2.2 Summary of Changes from Budget 2002/03 .................................................................................... 37 2.3 Revenue by Source -- Consolidated Revenue Fund.................................................................... 40 2.4 Expense by Ministry -- Consolidated Revenue Fund.................................................................. 41 2.5 Contingencies and New Programs (All Ministries) Vote -- 2002/03....................................... 43 2.6 Government Restructuring -- Consolidated Revenue Fund...................................................... 46 2.7 2002/03 Crown Corporation and Agency Operating Results..................................................... 47 2.8 Full-Time Equivalents (FTEs) Utilization........................................................................................... 49 2.9 Capital spending ........................................................................................................................................ 50 2.10 Provincial Debt Summary ....................................................................................................................... 51 2.11 Summary of Debt Changes from the 2002/03 Budget ................................................................. 52 2.12 Reconciliation of Summary Deficit to Debt Increase -- 2002/03 ............................................ 52 2.13 Interprovincial Comparison of Credit Ratings, June 2003........................................................... 53 2.14 Key Debt Indicators .................................................................................................................................. 54

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Appendix 2 -- Financial Review..................................................................................................................................... 55 Government's Financial Statements......................................................................................................................... 56 The Financial Cycle ....................................................................................................................................................... 57 Capitalization ................................................................................................................................................................... 59 Unfunded Pension Liabilities ..................................................................................................................................... 60 Adjustments to the Accumulated Deficit ............................................................................................................... 60

Charts

A2.1 A2.2

Summary Financial Statements Components .................................................................................. 57 Financial Planning and Reporting Cycle........................................................................................... 58

Tables A2.1 Effects of Capitalization on the Summary Accounts................................................................. 60 A2.2 Summary of Changes in Accumulated Deficit from the 2001/02 Public Accounts Reported Balance ....................................................................... 61 A2.3 Five-Year Operating Results ............................................................................................................. 62 A2.4 Summary of Changes from the 2002/03 Third Quarterly Report Updated Forecast........................................................................................................................... 63 A2.5 Five-Year Statement of Financial Position ................................................................................... 64 A2.6a Five-Year Revenue by Source -- Consolidated Revenue Fund........................................... 65 A2.6b Five-Year Dedicated Revenue Collected on Behalf of, and Transferred to, Crown Corporations and Agencies, and Other Entities .................................................. 66 A2.7 Five-Year Revenue by Source -- Supplementary Information -- Consolidated Revenue Fund ..................................................................................................... 67 A2.8 Five-Year Expense by Function -- Consolidated Revenue Fund ....................................... 68 A2.9 Five-Year Expense by Function -- Supplementary Information -- Consolidated Revenue Fund ..................................................................................................... 69 A2.10a Government Restructuring Exit Expense ..................................................................................... 70 A2.10b Consolidated Revenue Fund Government Restructuring Expense, 2002/03.................. 71 A2.11 British Columbia Buildings Corporation Five-Year Income Statement ............................. 72 A2.12 British Columbia Ferry Corporation Five-Year Income Statement ..................................... 72 A2.13 BC Transportation Financing Authority Five-Year Consolidated Statement of Income .................................................................................................................... 73 A2.14 British Columbia Hydro and Power Authority Five-Year Income Statement.................. 73 A2.15 Liquor Distribution Branch Five-Year Income Statement ...................................................... 74 A2.16 British Columbia Lottery Corporation Five-Year Income Statement .................................. 74 A2.17 British Columbia Railway Company Five-Year Income Statement..................................... 75 A2.18 Insurance Corporation of British Columbia Five-Year Income Statement....................... 75 A2.19 Five-Year Provincial Debt Summary .............................................................................................. 76 A2.20 Five-Year Provincial Debt Summary -- Supplementary Information................................ 77 A2.21 Summary of Changes from the 2002/03 Third Quarterly Report Updated Forecast -- Capital Spending and Debt ............................................................. 78 A2.22 Historical Summary Accounts Surplus (Deficit) ........................................................................ 79 A2.23 Historical Revenue by Source -- Consolidated Revenue Fund .......................................... 80 A2.24 Historical Expense by Function -- Consolidated Revenue Fund....................................... 81 A2.25 Historical Provincial Debt Summary.............................................................................................. 82 A2.26 Provincial Taxes (as of July 2003) .................................................................................................. 83 A2.27 Interprovincial Comparisons of Tax Rates for 2003................................................................. 86 A2.28 Summary of Major Tax Changes Announced in 2003............................................................. 87

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Appendix 3 -- Constitutional Framework ................................................................................................................... 89

Constitutional Framework........................................................................................................................................... 90

Provincial Government ............................................................................................................................................... 90 Legislature ................................................................................................................................................................. 90 Executive ................................................................................................................................................................... 90 Judiciary ..................................................................................................................................................................... 91 Provincial Government Jurisdiction................................................................................................................. 92

2003 Financial and Economic Review -- July 2003

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