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.
Report B: FISCAL REVIEW AND OUTLOOK
MAIN REVENUE ASSUMPTIONS AND FORECAST RISKS — CONSOLIDATED REVENUE FUND
Risks and Sensitivities
|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
±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
±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
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
±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.
|Copyright © 2000: Queen’s Printer, Victoria, British Columbia, Canada|