JOC ARCHIVES

December 4, 2013

Construction cut back in latest B.C. budget update

The second quarter update for the 2013 B.C. Budget maintains the government's plan to eliminate the provincial deficit in the next year, but there are going to be further reductions to capital spending on the construction of infrastructure.

“Given the size of our $44 billion budget, this update shows there are no wild fluctuations, not a lot of volatility, which demonstrates good fiscal management, and helps create economic stability,” said Minister of Finance Michael de Jong.

“We’ve had to make some tough choices to get B.C. back on track with balanced budgets.”

Jong presented the 2013 November Budget Update in Victoria on Nov. 27, which maintains government’s modest spending plans and commitment to deliver a balanced budget.

The second quarter fiscal outlook for 2013/14 projects a surplus of $165 million, which is a $29 million improvement since the first quarterly report.

The outlook reflects a $58 million reduction in taxation revenue, a $40 million reduction in natural resource revenue and a net reduction of $14 million resulting from other revenue and expense changes.

Reductions in revenue were offset by an improvement in the net income of commercial Crown corporations and a reduction in forecast allowance.

A forecast allowance of $100 million remains as a buffer against future economic and fiscal risks.

Projected taxpayer-supported capital spending has decreased by $147 million from the first quarter projection due to project construction schedule adjustments that moved spending into future years.

The 2013 November Budget Update estimates total capital spending will drop to $6.187 billion in 2013-14, which is $190 million lower than the first quarterly report forecast.

The February budget forecast that capital spending would be $6.767 billion.

Taxpayer-supported capital spending is projected at $3.6 billion, which is a $147 million decrease since the first quarterly report.

This drop reflects lower forecast spending due to construction schedule adjustments in the areas of schools, health facilities and transportation projects and has been partially offset by an increase in spending on self-funded university projects.

At $2.6 billion, self-supported capital spending is down $43 million from the first quarterly report mainly due to procurement delays for the John Hart Replacement project and construction schedule adjustments for other BC Hydro projects.

The taxpayer-supported debt forecast is down $550 million since the first quarter report, due to lower borrowing for capital purposes and a change in the investment strategy for the Children’s Education Fund towards investment in B.C. government bonds.

Self-supported debt is forecast to be $327 million lower than the first quarter projection, as a result of increased use of internal financing for capital projects by BC Hydro and the Transportation Investment Corporation, which reduced borrowing requirements.

The taxpayer-supported debt to Gross Domestic Product (GDP) is now projected to be 18.5 per cent, which is a 0.2 percentage point reduction from the adjusted first quarter projection.

BC housing starts in the first 10 months of 2013 were down from last year, due to a number of factors including stalled employment growth, tighter federal mortgage insurance rules implemented in July 2012 and B.C.’s relatively slow population growth.

Housing starts in the province averaged about 26,500 annualized units during the first 10 months of 2013, which is a 7.1 per cent year-to-date decline.

Meanwhile, residential building permits fell by 2.4 per cent year-to-date to September 2013 compared to the same period last year, suggesting further weakness in homebuilding could be on the way in the coming months.

B.C.’s real GDP is forecast to grow by 1.4 per cent in 2013 and 2.2 per cent in 2014, unchanged from the June Budget Update.

Members of the independent Economic Forecast Council will provide their updated B.C. real GDP forecasts to de Jong at their annual meeting in Vancouver on Dec. 6, 2013.

Print | Comment

MOST POPULAR STORIES
TODAY’S TOP CONSTRUCTION PROJECTS

These projects have been selected from 500 projects with a total value of $2,096,783,397 that Reed Construction Data Building Reports reported on Tuesday.

UNIVERSITY BLDG

$125,000,000 Edmonton AB Tenders

INDUSTRIAL WAREHOUSES, OFFICES

$50,000,000 New Westminster BC Negotiated

HOTEL, RETAIL BUILDING

$50,000,000 Calgary AB Negotiated

Daily Top 10

TODAY’S TOP JOBS

Site Super
Ontario-East York

Project Control Coordinator - NLLP Program Office (16633)
Ontario-North Bay

Experienced Site Superintendent
Ontario-Cobourg

Project Manager
Ontario-Oshawa

Estimator
Ontario-Toronto

Site/Field Coordinator
Ontario-Mississauga

Superintendent
Alberta-Red Deer

Operations Foreman
British Columbia-Vancouver

Earthworks Estimator
Ontario-King

Junior Construction Manager
Alberta-Fort McMurray

More jobs 

myJobsite.ca

Your gateway to
the top careers
in construction
and design