Report B: FISCAL REVIEW AND OUTLOOK
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
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
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 m 3 in 1998/99 and
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
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.
|Copyright © 1999: Queens Printer, Victoria, British Columbia, Canada|