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UPDATE 1-British Columbia ends 2015-16 with larger-than-expected surplus

Published 2016-07-21, 03:10 p/m
© Reuters.  UPDATE 1-British Columbia ends 2015-16 with larger-than-expected surplus
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(Adds details on tax revenue gains, housing market and resource industry revenue declines)

By Julie Gordon

VANCOUVER, July 21 (Reuters) - British Columbia said on Thursday that it ended its 2015-2016 fiscal year with a larger-than-expected budget surplus, bolstered by higher tax revenues, including a 43.9 percent jump in its property transfer tax revenues.

The western Canadian province ended the year with a surplus of C$730 million ($560 million), up from the C$377 million projected in February, and said it remains on track to balance the 2016-2017 budget. province said it received C$1.2 billion more in tax revenue in 2015-16 than forecast in its original budget, led by a C$468 million jump in property transfer tax revenues compared with the previous year.

That massive rise was fueled by increased activity and higher values in the property market, the province said in a statement. The province charges a transfer tax ranging from 1 percent to 3 percent on almost all property sales.

While housing prices have increased across much of British Columbia, the Greater Vancouver area has led the boom, with the cost of the typical residential property jumping 32 percent to C$917,800 in June.

The property transfer tax gains outweighed a sharp decline in revenues from the province's oil, gas and mining sectors, which have struggled in face of falling natural resource prices and delays to proposed liquefied natural gas projects.

Revenues from petroleum, natural gas and mineral industries fell by C$464 million, compared with the previous year.

British Columbia, which has a AAA credit rating, said total provincial debt was C$65.29 billion in 2015-16. The debt-to-GDP ratio, which peaked at 17.9 percent in 2013-14, was 17.4 percent, in line with estimates.

($1 = C$1.30)

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