Ministry of Finance and Corporate Relations
Honourable Paul Ramsey, Minister
This electronic version is for informational purposes only.
The printed version remains the official version.
Ministry of Finance and Corporate Relations Honourable Paul Ramsey, Minister |
This electronic version is for informational purposes only. The printed version remains the official version. |
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Report B: FISCAL REVIEW AND OUTLOOK
TABLE B7
MAIN REVENUE ASSUMPTIONS AND FORECAST RISKS — CONSOLIDATED REVENUE FUND
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Revenue Source |
Key Assumptions |
Risks and Sensitivities |
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| Personal Income Tax $5,513 million | Personal income growth of 3.2% in 2000, 3.6% in 2001. Assumes family bonus tax reduction of $85 million in 2000/01. | A 1% change in personal income affects revenue growth by 1.1% (after
federal/provincial measures). ±1% change in 2000 personal income growth equals ±$10 million to $25 million in 1999/00; ±$45 million to $75 million in 2000/01. |
| Corporation Income Tax $915 million | Recorded on cash basis; payments based on a lagged share of the
national tax base. Small business tax rate reduced to 4.75% (effective July 1, 2000). British Columbia corporate profits increase of 11.5% in 1999. National corporate taxable income (CTY) increase of 6% in 2000. |
±1% change in 1999 British Columbia corporate profits growth equals
±$10 million. ±1% change in national CTY growth equals ±$11 million. |
| Social Services Tax $3,446 million | Retail sales growth of 2.8% in 2000 and 4.8% in 2001. Machinery/equipment spending increase of 6.0% in 2000 and 6.4% in 2001. |
±1% change in retail sales growth equals ±$26 million. ±1% change in machinery/equipment spending growth equals ±$7 million. |
| Fuel and Tobacco Tax $905 million | Fuel and tobacco taxes are dependent on volumes sold only — tax rates are fixed. | Fuel: Higher pump prices could slow consumption. ±1% change in real
GDP growth equals ±$4 million. Tobacco: ±1% change in population growth equals ±$1 million. |
| Property Tax $1,360 million | Tax base growth at 2.3%, reflecting new construction and expected changes in property values. Assumes home owner grant tax reduction of $502 million in 2000/01. | ±1% change in assessed value equals ±$11 million. |
| Petroleum, Gas and Minerals Revenue $673 million | Natural gas price at $2.15/gigajoule in 2000/01; volumes up 2.0%. Sale of Crown land drilling rights down $20 million in 2000/01, reflecting lower volume and average price. Sale of Crown land drilling rights assumes average price of $240/hectare and 730,000 hectares sold. Small change in petroleum royalties for 2000/01; price of oil at US $20/bbl. Minerals revenue down $13 million. |
Commodity prices remain a risk in 2000/01. Price of oil can affect sales of Crown land drilling rights. ±5% change in natural gas price equals ±$24 million. ±5% change in natural gas volumes equals ±$18 million. ±5% change in price or volume of land sales equals ±$9 million. |
| Forests Revenue $1,302 million | Crown coastal harvest volumes at 16.5 million m3 in
2000/01, down 6.8% from 1999/00 (17.7 million m3); Crown interior
harvest volumes at 45.7 million m3 in 2000/01, down 7.1% from
1999/00 (49.1 million m3). Average SPF 2$MU4 price in 2000 at US $323/1,000 bd ft. Average hemlock (HBSQ) price in 2000 at US $600/1,000 bd ft. Exchange rate 69.4 cents US in 2000. Average pulp price in 2000 at US $650/tonne. Pulp prices do not have a direct effect on CRF revenue, other than through harvest volumes. |
Effects of the termination of the Canada/U.S. Softwood Lumber
Agreement are unknown. ±US $25 change in SPF 2$MU4 price equals ±$46 million. ±US $50 change in HBSQ price equals ±$8 million. ±5% change in coastal harvest volumes equals ±$15 million. ±5% change in interior harvest volumes equals ±$40 million. A 1 cent US increase (decrease) in the exchange rate reduces (increases) revenue by $10 million. |
| Other Sources: Fees, Licences, Fines and Miscellaneous $1,881 million | Usage rate generally varies with population growth. Population growth of 1.1% in 2000. Revenue includes MSP premiums, motor vehicle registration and other fees, licences and fines. | ±1% change in usage rate/population growth equals ±$15 million. |
| Government Enterprises: LDB, BC Hydro and other Crown corporations $1,448 million |
Generally dependent on growth in real GDP and population. Population growth of 1.1% in 2000. Real GDP growth of 2.2% in 2000. |
BC Hydro contributions can be affected by weather. ±1% change in population or real GDP growth equals ±$10 million to $20 million. |
| Canada health and social transfer (CHST) $2,549 million | Includes $121 million of British Columbia's $471-million share of
the $3.5-billion supplement (1999 federal budget); British Columbia's
full $333-million share of the new $2.5 billion supplement (2000
federal budget). National income growth of 5.3% in 2000 and 4.8% in 2001. British Columbia population growth of 1.1% in 2000. |
±1% change in British Columbia population growth with no change in
national population growth is equivalent to ±$35 million to $40
million. ±1% increase (decrease) in British Columbia income tax base reduces (increases) revenue by $15 million to $20 million. ±1% in national tax points equals ±$35 million to $40 million. |
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