NDP government paints rosy economic picture as public accounts show $1.5B surplus

B.C.’s highest-paid public executives
The NDP government has released a list of B.C.'s highest-paid public executives. Keith Baldrey has the rundown

The B.C. government is painting a rosy picture of the province’s finances.

Finance Minister Carole James unveiled the province’s public accounts and audited financial statements for the 2018/2019 fiscal year Thursday, presenting a larger-than expected $1.5-billion surplus.

The surplus was built on higher-than-expected economic growth, household growth and income tax returns, James said.

James said B.C. had eliminated operating debt for the first time in four decades, while maintaining the country’s lowest unemployment rate (4.7 per cent) and nation-leading wage growth (5.9 per cent).

She also touted B.C.’s 14.5 per cent taxpayer-supported debt-to-GDP ratio, the third lowest in Canada.

READ MORE: Few incentives in spending-heavy B.C. budget, global downturn worries business leaders

“I’m happy to report that we are on a very strong fiscal footing,” said James, who said her government had used the better-than-expected returns to invest in child care, healthcare and the elimination of MSP premiums.

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She also claimed the province was seeing results from its multi-billion-dollar housing program.

WATCH: No surprises in 2019 B.C. budget

No surprises in 2019 B.C. budget
No surprises in 2019 B.C. budget

“We’re starting to see a moderation in the housing market after a decade that saw prices skyrocket out of reach for all but a few,” said James.

“Having a housing market and economy that’s based on a speculative real estate market and money laundering isn’t good for anyone.”

While the top-line items in the public accounts were good news, the numbers indicated some key areas of risk for the province.

READ MORE: B.C. budget 2019 highlights: 10 things to know

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Property transfer tax revenues dropped by $315 million last year — a fact James said she was watching closely, but that she said was preferable to supporting the budget on speculation in real estate.

ICBC also remains a major challenge for the province, showing a $1.15 billion dollar loss last year — with red ink expected to flow again this year.

“They are continued to expect a loss in this year in 19/20, and then expected to see a turnaround in the year after,” said James.

WATCH: (Aired: Aug. 2018) B.C. financial report reveals surplus…for now

B.C. financial report reveals surplus…for now
B.C. financial report reveals surplus…for now

Forestry revenue was also up last year, with a $341 million bump — a cash stream the province is likely to find itself without this year, given the hammering the industry is currently taking.

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And while forestry revenue was up, it was one of the only areas — other than tax revenue — to show growth.

READ MORE: Majority of B.C. business owners oppose new employer health tax: survey

Tax revenue grew from 50 per cent to 60 per cent of the budget in 2018/2019, a jump James played off as the result of higher income and corporate tax revenues tied to the growing economy.

The opposition BC Liberals were quick to slam the NDP, accusing them of “patting themselves on the back.”

“While John Horgan and the NDP want to brag about last year’s numbers, hard-working British Columbians are growing more and more concerned about skyrocketing rents, a forestry sector in crisis, and small businesses being taxed out of business,” said BC Liberal Finance Co-Critic Shirley Bond in a media release.

Bond accused the NDP of saddling B.C. with 19 new taxes, with the government’s  main source of cash being “the pockets of taxpayers.”

The Liberals highlighted other potential storm clouds on the horizon, including an anticipated decrease in federal transfers, a growing debt-to-revenue ratio and continued concerns about ICBC.