VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 19, 2013) - "The government has made some tough choices in order to balance today's budget," said Pat Kennedy, CMA, FCMA, and Board Chair of the Certified Management Accountants Society of British Columbia. "After four consecutive deficit budgets, the balanced budget presented today recognizes that government has had to prioritize its spending. Expenditures on healthcare approach 42 per cent of the budget - this really limits what the government is able to invest in other areas. The focus today was on families, education and maintaining healthcare."
"Balancing the budget is no small achievement with conditions in the world economy still challenging," said Vinetta Peek, CMA (Hon.), CMA, President and CEO of CMA British Columbia. "We applaud the government for strategically managing its expenditure growth, as demonstrated with the recent contract settlements with BC's public service workers. These settlements were an important factor in balancing this year's budget."
"Focusing on debt reduction is critical to maintaining the province's triple-A credit rating. Moody's December downgrade of the province's debt to negative from stable was a wake-up call to government that they need to demonstrate strong fiscal management of BC's resources," continued Peek. "BC's debt-to-GDP ratio is one of the lowest in Canada; however, we need to continue to focus on debt reduction so that BC remains attractive to investors."
"We'd caution government to closely watch indicators of economic growth and how expenditure growth is managed. These two factors are key in how the government is filling the deficit gap in order to balance the budget," continued Kennedy. "Raising the corporate tax rate by one per cent to 11 per cent and increasing the personal income tax rate for British Columbians earning over $150,000 for the next two years are short-term measures."
BC's Certified Management Accountants continue to caution government to take a course of prudent fiscal responsibility. De Jong's budget presentation outlines a conservative approach to expense projections and revenue growth while acknowledging the outside risks BC faces in meeting projections.
The challenge for government will be if the projections for growth and revenue are not met how they are still able to fulfill their commitment to a balanced budget.
The Certified Management Accountants Society of British Columbia awards the Certified Management Accountant (CMA) designation to qualified candidates in British Columbia. With 50,000 members around the world, CMA Canada grants a professional designation in strategic management accounting™ and is responsible for standards-setting, accreditation and the continuing professional development of CMAs. For more information, visit www.cmabc.com.