Ministry of Finance and Corporate Relations
Communications Branch
109 -- 617 Government Street
Victoria, B.C. V8V 1X4
PHONE (604) 387-3347 FAX (604) 356-2822


The Debt Management Plan

The government has listened to people's concerns that debt must be controlled -- that it must not threaten essential services or burden the public with more taxes.

And the government has listened to the advice of business and labour leaders who have concluded that the provincial debt must be managed by balancing the budget and ensuring that capital investment is managed within tight fiscal benchmarks.

B.C. has been very conservative in how it manages its debt -- as a result, it has the lowest debt per person and spends less than any other province to service its debt.

To keep B.C.'s debt the lowest in Canada, the 1994 budget included a fiscal plan that focused on eliminating the deficit by 1996/97. This has been accomplished, one year ahead of schedule, without increasing taxes.

The 1995 budget includes a comprehensive debt management plan to cap B.C.'s debt costs and reduce B.C.'s debt relative to the provincial economy. The plan outlines how government will pay down the accumulated direct debt and control the cost of total taxpayer-supported debt.

The Debt Management Plan

The debt management plan will maintain B.C.'s high credit rating by:



Reporting on the Size of the Debt

Defining Debt

Commercial Debt -- is the amount owed by commercial Crown corporations that operate without government subsidies: for example, BC Rail and BC Hydro.

Their debt is guaranteed by the government, but their debt servicing costs and repayment requirements are paid out of their own revenues, just like private sector companies.

Taxpayer-Supported Debt -- interest and principal repayments are made at least in part with tax dollars, so this debt is called taxpayer-supported debt.

At March 31, 1995, taxpayer-supported debt totals $19.5 billion.

Bond rating agencies assess and compare government debt on this basis.

Taxpayer-supported debt has two parts: the debt to fund annual operating deficits, and the debt to fund capital projects.

Debt to fund annual operating deficits

Debt to pay for capital projects

Budget '95 (Province of B.C.)

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