VICTORIA, British Columbia (Reuters) - British Columbia’s annual budget released on Tuesday projected a budget surplus of C$284 million ($229.35 million) in fiscal 2015-16, the Pacific coast province’s third consecutive balanced budget under the ruling Liberals.
The surplus is projected at C$376 million in 2016-17 and C$399 million in 2017-18, the government said. The revised surplus for 2014-15 is now seen at C$879 million, nearly double the previous projection of C$444 million.
The government attributed the strong performance to its diversified economy and export markets but warned the outlook could still be affected by a potential slowdown in domestic and U.S. economic activity among other factors.
“Meeting even these near-term targets won’t be easy,” said finance minister Michael de Jong in his budget speech at the Victoria legislature. “After all, we’re not immune to the forces affecting the rest of the world.”
The recent plunge in oil prices has hit neighboring Alberta’s crude-dependent economy hard and British Columbia’s natural resource revenues are also expected to fall over the next three years, dragged down in part by lower gas royalties.
Still, the budget offered some goodies, including new funding related to mining industry oversight and extended incentives for mine exploration and development, along with expanded tax credits for the province’s growing film and video game industries.
De Jong also highlighted modest funding to help local businesses access Canada’s new renminbi hub, a clearing house that would allow direct trade in the Chinese yuan currency, which is expected to boost the value of provincial exports to China.
But his tone was more muted on the nascent liquefied natural gas industry, as the government continues to wait for companies such as Malaysia’s Petronas [PETR.UL], Royal Dutch Shell and Chevron Corp to make final go or no-go decisions on export terminals in the province.
“We remain optimistic, but what we won’t do is make budgetary assumptions until that first final investment decision has been taken,” said de Jong.
Premier Christy Clark has prioritized the development of LNG in British Columbia, which she has said could create up to 100,000 jobs and help the province pay down its debt.
British Columbia, which has an AAA credit rating, said total debt is forecast to reach C$65.96 billion in 2015-16, C$68.25 billion in 2016-17, and C$70.4 billion in 2017-18. The debt-to-GDP ratio, which peaked at 17.9 percent in 2013-14, is expected to fall to 16.6 percent in 2017-18.
($1 = 1.2383 Canadian dollars)
Editing by Meredith Mazzilli and James Dalgleish