B.C. posts surplus $200M higher than forecast while debt jumps by $4 billion

VICTORIA—British Columbia’s post-election budget surplus came in $200 million higher than forecast, but the province’s finance minister said that doesn’t mean he’s prepared to release his grip on government spending.

The province released audited statements Tuesday for the 2013-14 fiscal year, which indicated a surplus of $353 million—$200 million higher than projected in the budget that was tabled after last year’s provincial election.

Finance Minister Mike de Jong said he feels some satisfaction with those numbers, especially since the Opposition New Democrats claimed during the election campaign that the budget wasn’t balanced.

“Many said we couldn’t, wouldn’t and didn’t balance the budget,” said de Jong.

Still, de Jong cautioned that even though there are indications B.C.’s economy is starting to warm up, the budget numbers were primarily the result of government belt-tightening amid dropping revenues.

“At a minimum, it tells me we have to be very cautious,” he said.

Revenues from taxes and self-supporting Crown corporations were $511 million lower than forecast, de Jong said.

On the other hand, he said measures that included a hiring freeze and reductions in discretionary spending resulted in government spending $561 million below the budget forecast. The June 2013 budget forecast a spending increase of 1.7 per cent, but it came in at a meagre 0.4 per cent.

De Jong said health spending was $564 million below the budget forecast, a savings of 3.1 per cent of the health budget.

Opposition New Democrat finance critic Mike Farnworth, who had previously insisted the government’s budget wasn’t balanced, said the Liberals balanced their books by gouging British Columbians.

“They’ve achieved that by picking the pockets of hardworking British Columbians,” he said.

Farnworth said extra fees and licences have added up to $303 million.

De Jong said B.C.’s debt continues to increase, rising by $4 billion to $60.8 billion. But he said B.C. debt-to-economic growth ratio declined to 18.2 per cent from its forecast of 18.4 per cent. He said B.C. has one of the lowest debt-to-economic growth rates in Canada, with Ontario’s being 40.4 per cent and Quebec’s 48.3 per cent.

He said the final economic statement measured B.C.’s economic growth at two per cent in 2013.

Meanwhile, De Jong also used Tuesday’s announcement to focus on salaries for senior public-sector executives, which he said where down by one per cent. The number of executives receiving bonuses or incentive pay decreased by six per cent.

However, he said two unapproved public executive contracts at the Royal BC Museum and BC Cancer Agency will result in sanctions.

The museum’s provincial grant will be hit with a one-time reduction of $53,000, covering a $30,000 signing bonus for CEO Jack Lohman, his $18,000 relocation allowance and $5,000 in tax-advisory services for two years.

The government also wants removed from his contract a provision that gives Lohman three round-trip, business-class flights to London annually.

Suromitra Sanatani, chairwoman of the museum’s board of directors, said she has no issue with the government trying to make the public sector more accountable.

But she said the issue is unfolding in an unfortunate manner, and the board of directors operating two years ago was operating under different policy guidelines.

She said Lohman has not done anything wrong, came to B.C. with good intentions and wants to do good things for the museum.

“As board chair, I have to tell you I feel badly that someone who is doing good work is being publicly embarrassed like this, but we’ll have to move on and this museum has a lot of great partnerships that are going to unfold, and that’s what we’re going to focus on.”

De Jong also said the Provincial Health Services Authority was directed to cut Cancer Agency president Max Coppes’s annual salary of $500,000 by 10 per cent. The salary cut was ordered because the agency negotiated a contract for Coppes without approval.

Last month, de Jong’s ministry released a report that concluded Vancouver-area Kwantlen Polytechnic University’s board of directors failed to meet government disclosure requirements when it topped up the salaries of senior executives. Advanced Education Minister Amrik Virk had been a member of the Kwantlen board of directors that approved at least one instance of the salary manoeuvres.

Last week, de Jong’s ministry released an audit examining Michael Graydon’s departure from his job as the head of the British Columbia Lottery Corp. He received a $125,000 severance package after he quit.

Graydon walked directly into an industry-connected position and maintained access to the Crown’s information systems for 10 days. The audit concluded Graydon was in a conflict of interest.