Floods, fires costly for provincial government

Despite the relatively small area burned by forest fires this year compared to last year, costs were $71 million more than budgeted

  • Sep. 15, 2013 6:00 p.m.

Tom Fletcher

Black Press

The B.C. Liberal government’s promised balanced budget is still on track, despite a dip in personal income tax revenues and higher than expected costs for flood and forest fire response, Finance Minister Mike de Jong said this week.

Releasing first-quarter financial results for the current fiscal year, de Jong said the finance ministry expects to post a small surplus of $136 million on the province’s operating budget of $44 billion. For the second time since the election, the surplus forecast was reduced.

NDP finance critic Mike Farnworth continued to question whether the books will be balanced by next spring.

“The government spent millions of dollars in the run-up to the election campaign promoting its jobs plan, promoting its budget, basically saying if they were re-elected, everything would be rainbows and unicorns,” Farnworth said. “The surplus has been reduced twice, and we’re only just in the first quarter.”

De Jong said despite the relatively small area burned by forest fires this year compared to last year, costs were $71 million more than budgeted because more fires were in populated areas in the south, requiring aerial and rapid response.

Forest fire budgeting is always a “crapshoot,” with dry weather, lightning strikes and proximity to settlement impossible to predict with any accuracy, he said.

(A Sept. 3 Black Press report incorrectly estimated that forest firefighting costs would be down this summer, despite a long period of dry weather.)

Emergency flood response costs added another $27 million to the bills for B.C. in the first quarter, after heavy rains swept through southeastern B.C. and into southern Alberta, where downtown Calgary and High River were flooded.

De Jong said the government’s hiring freeze and wage freeze for non-union staff continues, along with the “cooperative gains” mandate for union contracts that requires raises to be funded by savings in other areas of the operation.

Total government revenue was up $69 million from the government’s post-election budget update in June, helped by higher than expected corporate tax revenues.

Property transfer tax revenues were up $25 million, reflecting an uptick in the B.C. housing market. Other tax revenues were up $10 million, after what de Jong said was a smooth transition from the harmonized sales tax to the separate provincial sales tax this spring.

Forest revenue was up $62 million from the June forecast, but mineral revenues were down $41 million, mainly due to lower coal prices and reduced shipments.