February 17, 2004
As required by Section 7(d) of the Budget Transparency and Accountability
Act (BTAA), I am confirming that the Budget and Fiscal Plan contains the following elements:
— The economic and fiscal forecasts for 2004/05, which
are detailed in Part 1 and Part 3.
— All material economic, demographic, taxation, accounting
policy and other assumptions underlying the 2004/05 economic,
revenue, expenditure, surplus and debt forecasts are also disclosed.
We have disclosed certain key assumptions regarding ongoing or
anticipated negotiations. In particular:
— Government has provided no additional funding for future
wage settlements beyond the 0-0-0 mandate, from 2003/04 to 2005/06;
— For budget planning purposes the status quo is assumed
to prevail in the U.S. lumber dispute;
— BC's share of the additional $2 billion in federal
Health Accord funds announced on January 30, 2004, is not included
in the revenue forecast as the federal government has not finalized
the transfer arrangements and the associated accounting treatment
remains to be determined. Current planning assumptions would
see any new funds committed to the health care budget in 2004/05
and 2005/06 with no anticipated bottom line effect;
— Equalization revenues may continue to be volatile and
could be subject to substantial change as the federal entitlement
formula is scheduled for renewal in 2004/05; and
— The BC Rail investment partnership is assumed to conclude
by March 31, 2004. A delay is not expected to have an impact
on the forecast 2004/05 surplus, although it would postpone
the retirement of BC Rail debt into 2004/05. In addition, the
Northern Development Initiative, the BC Rail First Nations Benefit
Trust and a number of other related initiatives are assumed
to be subject to the investment partnership being approved by
the federal Competition Bureau. These expenditures are planned
to take place in the same fiscal year as the transaction is
These and other major areas of risk to the plan known at this
time are disclosed in the risks section in Part 1 and in the material
assumption tables in the appendix.
— The report on the current advice of the Minister's Economic
Forecast Council on economic growth, including the range of forecasts
for 2004 and 2005. This is found at the end of Part 3.
Although not required by the BTAA, the most material assumptions
and sensitivities for the subsequent two years of the fiscal plan
are also disclosed.
The ministry spending plans included in this budget have been developed
following reviews by Treasury Board and Government Caucus Committees.
Crown corporation forecasts have been approved by the respective
Boards of Directors. In addition, the Budget and Fiscal Plan is
accompanied by service plans for ministries and Crown corporations,
detailing the expected outcomes from the financial resources provided.
The Budget and Fiscal Plan conforms in all material respects
to the standards set by the accounting profession for senior governments
in Canada, referred to as generally accepted accounting principles
or "GAAP". The main change required to fully comply with GAAP beginning
in 2004/05 has been the integration of the financial forecasts of
schools, universities, colleges and health authorities/societies
(the SUCH sector) into government's revenue, spending and balance
sheet projections. The SUCH sector forecasts have been provided
by the management of the various organizations, with broad policy
assumptions provided by the Ministries of Health Services, Advanced
Education and Education. Every effort has been made to ensure that
the financial information is compiled in a manner consistent with
GAAP. However due to the timing of the budget, SUCH sector organizations
submitted their forecasts prior to review and approval of these
forecasts by their respective boards. As a result, final approved
financial plans may differ from the management forecasts included
in the Budget and Fiscal Plan.
As required under section 7(e) of the BTAA, the forecast allowance,
which is an adjustment to the most likely forecast of the 2004/05
surplus, is also disclosed in the risks section in Part 1.
I would like to thank staff in all government ministries, Crown
corporations and the SUCH sector for their work in developing the
plans and preparing these multi-year economic and financial forecasts.
I would like to especially acknowledge the hard work and dedication
of my colleagues in the Ministry of Finance for the significant
achievement of preparing a three year fiscal plan that is consistent
Deputy Minister and
Secretary to Treasury Board
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