(Recasts with cut to property tax revenue forecast, de Jong
Nov 29 British Columbia's government raised its
2016-17 budget surplus forecast for the second time this year on
Tuesday even as the Western Canadian province slashed its
revenue estimate for a new tax on property purchases by
British Columbia said it now expected a surplus of C$2.2
billion ($1.67 billion) this fiscal year, up nearly 16 percent
from its C$1.9 billion September forecast.
The increase was driven by higher personal income tax
revenue and a robust natural resources sector, including higher
prices for natural gas and coal, it said.
"We continue to see the benefits of Canada's strongest and
fastest growing economy," Finance Minister Michael de Jong told
reporters after releasing the province's second quarterly fiscal
The improved surplus forecast came even though the province
scaled back its estimate for revenue from a foreign property
transfer tax to C$50 million from a September forecast of C$165
British Columbia introduced the 15 percent tax on foreign
buyers of properties in the Vancouver area on Aug. 2 in an
effort to improve affordability in Canada's most expensive
housing market. In the wake of the tax, foreign purchases have
slumped from around 13 percent of total property transactions
between June and August to around 3 percent in October.
The government's initial estimate was made soon after the
tax was introduced when it was "not quite certain what effect it
would have on market behavior," finance ministry spokesman Jamie
De Jong said the latest C$50 million estimate could end up
being a little low. The government expects foreign property
purchases could "settle" at around 4-5 percent of total
transactions, Edwardson said.
The government left unchanged its September forecasts for
economic growth in British Columbia at 2.7 percent in 2016 and
2.2 per cent in 2017.
($1 = 1.3423 Canadian dollars)
(Reporting by Nicole Mordant in Vancouver; editing by Diane
Craft and Andrew Hay)