B.C. Budget Backgrounder
Contact:
Joel Emes, Research Economist
The Fraser Institute, (604) 714-4546, Email: joele@fraserinstitute.caMichael Walker, Executive Director
The Fraser Institute, (604) 714-4545 Email: michaelw@fraserinstitute.caRelease Date: 24 March 1997
VANCOUVER, BC>>> The purpose of this Fraser Institute Backgrounder is to compare B.C.'s fiscal situation with that of the other provinces.
Deficit
B.C.'s deficit per person is likely to be $207 for 1996/97, which is a long way from the $23 per person surplus announced in last year's pre-election budget. B.C. is one of four provinces that does not have a balanced budget. Quebec and Newfoundland expect to have balanced budgets by the year 2000, and Ontario the year after. B.C. was supposed to have balanced budgets in 1995/96 and in 1996/97. Both are in deficit. Given an estimated $800 million deficit this year and an almost $300 million decline in federal transfer payments for 1997/98, a surplus budget does not seem likely soon.
Provincial Tax Rate
The provincial government often claims that British Columbians have one of the lowest tax bills in the country. This claim, however, is not based on all the taxes that we pay. When indirect taxes are included -- liquor and tobacco taxes, license fees, corporate taxes that get passed along as higher prices, and Crown Corporation profits -- the average B.C. family has the highest tax burden in the country. British Columbia had the largest increase in taxation in the country between 1995/96 and 1996/97. Every British Columbian will pay $107 more in (inflation adjusted) taxes in 1996/97. Compare this to the next largest increase of $42 in New Brunswick, and the decline in taxes in five provinces. The "Provincial Tax Rate" (B.C. government revenue per dollar of gross provincial product) has risen from 18.9% in 1992/93 to 21.8% in 1996/97, a 15% increase.
Spending
British Columbia is the only province that had an increase in inflation-adjusted spending between 1995/96 and 1996/97. The average decrease in spending in the other nine provinces was 4%, while spending in B.C. increased by 1%. The government of British Columbia is spending more per person in inflation-adjusted dollars than the average of the other nine provinces. This is a departure from the historical pattern where B.C. consistently spent less.
The Fraser Institute will provide further commentary once the budget has been delivered.
Established in 1974, The Fraser Institute is an independent public policy organization based in Vancouver.
For further information contact:
Suzanne Walters, Director of Communications,
The Fraser Institute, (604) 714-4582,
Email suzannew@fraserinstitute.ca
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