Last Thursday, Finance Minister Mike de Jong introduced a budget with updated fiscal numbers. The previous budget announced in February had not been passed before the legislature was dissolved for the 2013 provincial election.
The budget released today was similar to the budget tabled in February, however, reflects some moderate changes in economic and revenue forecasts. The Economic Forecast Council has revised its projection for provincial real GDP grown in 2013 to 1.6 per cent, down from 2.1 per cent in January.
Further fuelling the lower economic projection are decreases in retails sales, job growth and housing starts. The employment growth rate was predicted to be 1.1 per cent and is now at 0.7 per cent. This equates to a difference of 9,000 fewer jobs than the previous forecast. Retail sales growth was predicted to be 3.5 per cent, but is now at 1.8 per cent. Further, housing starts were predicted to be 24,679, but are now at 23,800. A small increase was forecast in resource revenues, with the government signallying an increase in the price of natural gas.
In order to maintain a balanced budget, the government will continue its expenditure management controls: an additional $130 million in cuts to provincial spending over the next three years is being instituted; and, a core review of all government spending is targeting an additional $100 million in spending reductions and efficiencies over two years. The budget, however, does maintain new investments in early childhood development and registered education savings plans (RESPs) for children born after 2007.
Surpluses are forecast in all three years of the fiscal plan, however projections originally forecast as $197 million for this year have been decreased to $153 million, as seen below:
- $153 million in 2013-14;
- $154 million in 2014-15; and
- $446 million in 2015-16.