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For Immediate Release


July 11, 2002

Ministry of Finance




VICTORIA – The province posted a $1.2-billion deficit for fiscal year 2001-2002, according to the final audited financial statements released today. That’s a slight improvement on the $1.5-billion deficit forecast in the government’s economic and fiscal update released July 30, 2001.


            The auditor general, an independent officer of the legislature, has audited the financial statements of the province included in the public accounts.


            “Since taking office, we have made good progress in getting our fiscal house in order, restructuring government and Crown corporations, protecting health care and education, and making B.C. more competitive,” said Finance Minister Gary Collins. “But the $1.2-billion deficit shows we still face tremendous challenges in meeting our commitment of balanced budgets beginning in 2004-05. Without the one-time pension-adjustment gain, we would have reported a summary deficit of $2.7 billion.


“Back in July, we included a $500-million forecast allowance in our $1.5-billion budget-deficit forecast. Without the allowance, government would have been over budget due to the unexpected impact of last year’s economic downturn and various write-downs and restructuring costs.”


Collins added that most of these write-downs and restructuring costs are associated with cleaning up the province’s finances. Specific items include the $223-million cost of Skeena Cellulose Inc.; $224 million costs for restructuring of government and the taxpayer-supported Crowns; $165 million for BC Rail; and $140 million for ICBC, including a provision for the Surrey Central City development.


“While these unexpected costs hurt our bottom line, ministries did a good job dealing with these challenges and re-establishing discipline in the way we manage taxpayers’ money.”


In addition, Collins said, last year government passed legislation to put in place real balanced-budget and truth-in-budgeting laws to enhance government accountability. The legislation also requires government to fully adopt generally accepted accounting principles by fiscal 2004-05.


Collins said the government’s three-year economic and fiscal plan ensures B.C. is competitively positioned to take advantage of the economic recovery.



 “Investors and ratings agencies are watching us closely,” said Collins. “We must continue with our plan to re-establish fiscal discipline, maintain competitive taxes, cut red tape and control our debt.


“The key to achieving a sustainable economic recovery is sticking to our plan so we attract the investment to get B.C. growing again.”


In addition to the public accounts, the province released the debt statistics report, the financial and economic review, the government annual report and annual reports for ministries and Crown corporations


The debt statistics provide detailed information on the makeup of the provincial debt and how government manages it. The financial and economic review describes B.C.’s economic performance in 2001, and details the financial performance of the ministries and Crown corporations for the 2001-02 fiscal year, as well as providing historical information. The annual reports summarize the performance of government, ministries and Crown corporations based on their objectives and targets.


All publications are available at www.gov.bc.ca on the Internet.





Communications Branch

250 387-3347




Visit the province's Web site at http://www.gov.bc.ca/ for online information and services.