British Columbia government, facing defeat, unveils C$2.8 billion surplus

(Reuters) - British Columbia’s Liberal government, which is on the verge of being voted out of power, said on Wednesday its unaudited 2016-17 budget surplus was C$2.8 billion ($2.15 billion), nearly double what it had predicted in February.

FILE PHOTO: British Columbia's Minister of Finance Michael de Jong addresses the media before a meeting of Canada's Provincial Finance Ministers in Ottawa, Canada December 21, 2015. REUTERS/Blair Gable/File Photo

The much larger surplus in the Western Canadian province was driven by higher-than-expected economic growth, marked by strong employment, retail sales and housing starts, provincial finance minister Michael de Jong said.

British Columbia’s preliminary real 2016 GDP growth came in at 3.7 percent, ahead of a budgeted 2.4 percent, the highest among Canada’s provinces. British Columbia is Canada’s third most populous province.

The fiscal update is usually only released in July once the figures have been audited, leading government critics to accuse the Liberals of trying to burnish their credentials as they prepare to leave office.

“I thought it appropriate on the eve of the transfer of power to disclose to British Columbians the state of the books,” de Jong told reporters.

The Liberals are expected to be defeated on Thursday in a non-confidence vote brought by the left-leaning New Democrats and backed by the Green Party. The Liberals, in power for 16 years, lost their majority in a May election.

But with only one seat more than the Liberals in the legislative assembly, an NDP-Green government could become unworkable, resulting in a new election being called.

“It is encouraging to hear that B.C’s economy is doing well,” Green Party leader Andrew Weaver said. “However, releasing this information out of political calculation is inappropriate,” he said in a statement.

Meanwhile, in the Vancouver region, Canada’s most expensive housing market, foreigners were responsible for 2.8 percent of real estate purchases between Aug. 2 last year and the end of May, de Jong said.

The province introduced a foreign property transfer tax on Aug. 2 following an outcry from residents and housing advocates that foreigners, especially from China, were buying real estate in droves and pushing prices out of locals’ reach.

De Jong said the tax raised C$102 million in the 2016-2017 financial year ending March 31.

Reporting by Nicole Mordant in Vancouver, Editing by Paul Simao and Sandra Maler