Opinion: B.C. government should keep eye on debt, says accountants group

B.C.’s GDP-growth rate, estimated at 3.7 per cent, led Canada in 2016. Economic growth was driven by increased housing activity and service demand, which led to 73,300 new jobs in the province. In addition, private non-residential building investment had favourable gains. These factors, combined with low provincial debt and a strong credit rating, continue to position the province as an attractive place to invest.

According to the Chartered Professional Accountants of British Columbia’s B.C. Check-Up, private-sector non-residential building construction investment rose by 12.8 per cent in 2016 to $4.4 billion, reflecting investor confidence in B.C.’s economy. With the exception of a downturn in 2014, this increase marked the fifth year of steady investment growth, with a 20.1-per-cent gain between 2011 and 2016. Commercial investment accounted for 64 per cent of private construction investment last year, driven by the construction of new office buildings and shopping centres across the province and particularly in Southwest B.C.

However, between 2015 and the end of 2016, our province saw the total value of capital investment in major projects decrease by 3.4 per cent, to $436.9 billion. Proposed liquefied natural gas projects accounted for the majority of these major projects. The cancellation of Petronas’ Pacific NorthWest LNG project and uncertainty surrounding the remaining LNG projects will have short and long-term repercussions on provincial coffers.

Looking at government spending, our province’s total net debt reached $42.3 billion in 2016. However, according to the B.C. Check-Up, the provincial government’s net debt-to-GDP ratio declined by 0.6 percentage points to 15.3 per cent in fiscal year 2016/17, one of the lowest in the country. This was due to B.C.’s strong economic performance, which allowed the provincial government to table a balanced budget. It is important that B.C.’s debt level continues to be top of mind for the government in order to uphold …read more

Source:: Vancouver Sun

(Visited 2 times, 1 visits today)

Leave a Reply

Your email address will not be published. Required fields are marked *