British Columbia Budget 2002 |
The government's three-year fiscal plan includes budget and planning targets for each ministry. All ministry spending, except for health and education, will be reduced by an average of 25 per cent.
Ministries will need to restructure their programs and activities to achieve their budgets and planning targets. Over three years, government is forecasting a full-time equivalent (FTE) reduction of 11,800. Voluntary departure and early retirement incentive programs have been established to help achieve these reductions.
A provision of $550 million over three years has been made for restructuring — $490 million for operating costs and a further $60 million to address capital related requirements.
Given the magnitude of the restructuring that will take place over the next several years, these cost estimates are preliminary. Accordingly, the numbers will be refined as plans become more definitive and specific costs are identified.
No funds have been set aside for the 2004/05 fiscal year. If needed, any costs will be absorbed in ministry budgets.
Restructuring charges include the cost of employee termination benefits and related severance costs, facility closure costs, costs to consolidate and relocate operations and other costs associated with the government's approved plan for restructuring. These costs are recorded in the year in which the restructuring decisions are finalized. Most restructuring charges are generally recovered after one year due to the lower overall operating cost for government.
The workforce adjustment strategy announced in November 2001 is aimed at aligning provincial government staff resources with core service needs, re-profiling the public service and helping to reduce the province's deficit. Restructuring costs associated with this strategy include the recognition of costs associated with the voluntary departure and early retirement incentive programs as well as employee severance costs, such as termination pay and salary during the notice period for affected employees. A provision of $215 million has been made for these costs.
The accommodation restructuring initiative addresses the upcoming changes in ministry program delivery needs across government. Restructuring costs associated with this initiative primarily include the costs associated with reductions and/or changes in demand for accommodation. A provision of $200 million — $180 million for operating costs and $20 million for capital requirements — has been made for these costs.
The remaining $135 million in restructuring costs — $95 million for
operating costs and $40 million for capital requirements — will be used to
address other costs associated with the government's approved plan for
restructuring. Examples include costs for new systems development, losses
related to asset impairments and disposals and penalties incurred to cancel
existing contractual obligations.