Report B -- Table B4 -- Main Revenue Assumptions and Estimates of Sensitivities

Report B: FISCAL REVIEW AND OUTLOOK

TABLE B4
MAIN REVENUE ASSUMPTIONS AND ESTIMATES OF SENSITIVITIES

Revenue Source	Key Assumptions	Risks and Sensitivities
Personal Income Tax $5,374 million	Personal income growth of 2.6% in 1999, 2.3% in 2000.	A 1% change in 1999 personal income growth affects revenue by $20 million in 1998/99 and $75 million in 1999/00.
Corporation Income Tax $847 million	Recorded on cash basis. Instalments received based on 1997 share of the national tax base. BC corporate profits decline of 15% in 1998. Small business rate reduced to 5.5% (effective July 1, 1999). National corporate taxable income (CTY) decline of 5% in 1999.	A 5% change in 1998 BC corporate profits growth affects revenue by $75 to $80 million. A 5% change in national CTY growth affects revenue by $50 million.
Social Services Tax $3,190 million	Retail sales growth of 2.5% in 1999 and 2.0% in 2000. Machinery/equipment spending growth of 1.1% in 1999 and 4.0% in 2000.	A 1% change in retail sales growth affects revenue by $20 million. A 1% change in machinery/equipment spending growth affects revenue by $13 million.
Fuel and Tobacco Tax $914 million	Fuel and tobacco taxes are dependent on volumes sold only — tax rates are fixed.	A 1% change in real GDP growth affects revenue by $6 million.
Oil, Gas and Minerals Revenue $422 million	Natural gas price at Cdn. $1.63/GJ, down 0.6% in 1999/00; volumes increase. Sales of Crown land drilling rights increase in 1999/00. No change in petroleum royalties for 1999/00; price of oil at U.S. $15/bbl. Minerals revenue down.	Commodity prices remain a risk in 1999/00. Price of oil can affect sales of Crown land drilling rights. A 5% change in the price of natural gas affects revenue by $17 million. A 5% change in natural gas volumes affects revenue by $10 million.
Forests Revenue $1,073 million	Crown coastal harvest volumes at 13.9 million m³ in 1998/99 and 1999/00; Crown interior harvest volumes at 44.4 million m³ in 1998/99 and 1999/00. Average SPF 2 X 4 price in 1999 at U.S. $295/1,000 bd ft. Average hemlock (HBSQ) price in 1999 at U.S. $525/1,000 bd ft.	Effects of recently announced Forest Action Plan. Effects of Canada/U.S. Softwood Lumber Agreement. A change of U.S. $25 in SPF price affects revenue by $50 million. A change of U.S. $50 in HBSQ price affects revenue by $6 million. A 5% change in coastal harvest volumes affects revenue by $11 million. A 5% change in interior harvest volumes affects revenue by $39 million. A 1 U.S. cent increase in the U.S./Canadian exchange rate reduces revenue by $13 million.
Fees and Licences $1,638 million	Usage rate generally varies with population growth. Revenue includes MSP premiums, motor vehicle registration and other fees.	A 1% change in usage rate/population growth affects revenue by $10 million.
Other Sources: Fines, Miscellaneous, LDB, BC Hydro $1,187 million	Fines and miscellaneous revenue sources, and LDB and BC Hydro contributions are generally dependent on growth in real GDP and population.	BC Hydro dividends can be affected by weather, economic conditions and energy costs. A 1% change in population or real GDP affects revenue by $10 to $20 million.
Canada health and social transfer (CHST) $2,208 million	1999/00 includes $350 million of BC's expected $471 million share of a $3.5-billion one-time federal supplement. National income growth of 3.8% in 1999 and 3.2% in 2000. BC population growth of 0.9% in 1999.	A 0.5% change in BC population growth with no change in national population growth affects revenue by $17 million. A 1% increase in BC personal income reduces revenue by $25 million. A 1% change in national tax points affects revenue by up to $20 million.

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