Rating Report

Report Date:
April 25, 2014
Previous Report:
October 21, 2013

1 Public Finance: Provinces and Municipalities
Analysts
Travis Shaw
+1 416 597 7582
tshaw@dbrs.com

Julius Nyarko
+1 416 597 7408
jnyarko@dbrs.com

The Province
British Columbia is the
westernmost province in
Canada and the fourth-
largest in terms of
economic activity.
Traditionally, the
forestry and natural gas
sectors have been
important drivers of
economic activity,
although their relative
importance has declined
in recent years. As a
result of greater trade
links with Asia, British
Columbia boasts more
diversified international
exports than its
provincial peers.

Treasury Bill and
Commercial
Paper Limit
$15 billion

Recent Actions
October 21, 2013
Confirmed



Province of British Columbia
Ratings

Debt Rating Rating Action Trend
Issuer Rating AA (high) Confirmed Stable
Short-Term Debt* R-1 (high) Confirmed Stable
Long-Term Debt* AA (high) Confirmed Stable
*Issued/guaranteed by the Province.

Rating Update

DBRS has confirmed the Issuer Rating of the Province of British Columbia (the Province) at AA (high), along
with its Long-Term and Short-Term Debt ratings at AA (high) and R-1 (high), respectively. All trends are
Stable, supported by the Provinces unmatched fiscal discipline and a gradually improving economic outlook.
British Columbias debt burden also remains very manageable for the profile and provides considerable
financial flexibility, although DBRS notes that it continues to be meaningfully above the pre-recession low.

Based on preliminary results, the Province reported a surplus of $175 million in 2013-14. This translates into a
DBRS-adjusted deficit of $1.8 billion, or 0.8% of GDP, which marks a moderate improvement from budget
and is one of the best fiscal results among provinces. Although total revenues grew by 3.9%, this fell somewhat
short of expectations, partly owing to a low inflationary environment. Total DBRS-adjusted spending was
relatively well-contained, rising by just 1.8% as the Province made efforts to identify savings in light of slower
than planned revenue growth. Sound fiscal results and underspending in the capital budget have resulted in
slower than anticipated, though still meaningful, DBRS-adjusted debt growth of 8.8%. Combined with
downward revisions to nominal GDP by Statistics Canada, this pushed the debt-to-GDP ratio up to 20.6%, still
the third-lowest debt burden among Canadian provinces. (Continued on page 2.)

Rating Considerations

Strengths Challenges
(1) Relatively low and affordable debt burden
(2) Fiscal discipline markedly above average
(3) Competitive tax rates
(4) Joint trusteeship for major pension plans
(5) Exemplary accountability and reporting practices
(1) Persistent growth in health-care costs
(2) Reliance on natural resources
(3) No provisions for wage increases in 2014-15

Financial Information

For the year ended March 31
(All figures DBRS adjusted) 2014-15B 2013-14P 2012-13 2011-12 2010-11
Debt* ($ millions) 47,794 46,435 42,688 38,976 36,327
Debt*/GDP 20.4% 20.6% 19.4% 18.1% 17.6%
Surplus (deficit) ($ millions) (1,782) (1,799) (2,621) (3,548) (2,762)
Surplus (deficit)/GDP (0.8%) (0.8%) (1.2%) (1.6%) (1.3%)
Interest costs/total revenue 4.0% 4.1% 3.8% 4.0% 4.1%
Federal transfers/total revenue 16.9% 17.6% 17.2% 18.9% 20.2%
Nominal GDP ($ millions) 234,033 225,794 219,994 215,148 205,996
Real GDP growth 2.0% 1.4% 1.5% 2.7% 3.3%
Unemployment rate 6.7% 6.6% 6.7% 7.5% 7.6%
* DBRS-adjusted tax-supported debt + municipal debt + unfunded pension liabilities. B = budget.
Source: Province of B.C., Statistics Canada and DBRS calculations.







2 Public Finance: Provinces and Municipalities
Province of
British Columbia

Report Date:
April 25, 2014





Rating Update (Continued from page 1.)

British Columbia continues to demonstrate strong fiscal discipline and remains in an enviable position relative
to provincial peers, as the latest budget points to a small surplus of $184 million in 2014-15. On a DBRS-
adjusted basis, this translates into a deficit of $1.8 billion, or a very manageable 0.8% of GDP. After
implementing a number of tax changes to shore up revenues in last years budget, the government opted for
only minor changes in the current fiscal year. As a result, revenue growth is expected to be moderate, though
slightly above projected spending growth. The fiscal outlook points to DBRS-adjusted deficits of 0.5% of GDP
or less through 2016-17 and continues to incorporate prudent assumptions and budget contingencies. As such,
DBRS-adjusted debt, as a proportion of GDP, is projected to decline slightly over the forecast horizon.

After recording estimated real GDP growth of just 1.4% in 2013, the Province has assumed real growth of 2.0%
for 2014, which appears to be somewhat conservative in relation to the private sector consensus tracked by
DBRS. The domestic economy is expected to remain relatively soft, with any improvement coming from a
strengthening in the external environment. Most forecasters expect this improving momentum to continue into
2015, for which the Province has assumed real GDP growth of 2.3%, prudently below the current private sector
consensus. Budget 2014 also emphasizes the potential for liquefied natural gas (LNG) development over the
longer term, although any positive economic benefits have not been built into budget projections.

Rating Considerations Details

Strengths
(1) British Columbia maintains the third-lowest debt-to-GDP ratio of all provinces, providing it with substantial
flexibility to endure debt growth in recessionary times. The debt-to-GDP ratio stood at 20.6% as of March 31,
2014. In addition, interest costs represent only 4.1% of total revenues, highlighting debt affordability and the
Provinces ability to absorb rising interest rates.

(2) The Province employs conservative assumptions and modest contingencies in its budgets, which has helped
to establish a track record of prudent fiscal management. This is demonstrated by British Columbias adherence
to its fiscal recovery plan first introduced in the fall of 2009 and its restoration of fiscal balance in 2013-14
on the Provinces accounting basis, despite weaker than planned economic growth.

(3) Although the Province implemented a number of tax measures last year, including an increase in the
corporate income tax rate to 11% from 10%, and established a new temporary tax bracket for high-income
individuals, the overall tax regime for individuals and corporations remains one of the most competitive in
Canada.

(4) Joint trusteeship agreements with four major employee groups (colleges, teachers, public services and
municipal) allow for sharing of pension deficits with plan members. The agreements also provide for automatic
adjustments in employee and employer contribution rates in the event of a pension deficiency.

(5) The Province continues to adhere to very high accounting and reporting standards, including compliance
with GAAP and early adoption of new rules, comprehensive consolidation of government entities, early budget
releases, full comparability of budget estimates and public accounts, and no reliance on fiscal smoothing
mechanisms to balance its budget.

Challenges
(1) As in most other provinces, growth in health-care spending in British Columbia continues to crowd out
spending in other program areas. Increasing demand for services, an aging population and rising prices for
drugs and technology have driven health-care costs up by an average of 4.0% over the past five years. While
DBRS acknowledges that the rate of growth has moderated in recent years due to a concerted effort by the
government to control costs, this is unlikely to be sustainable over the longer term, as improving economic
conditions may contribute to increased wage demands and renewed expense pressures.








3 Public Finance: Provinces and Municipalities
Province of
British Columbia

Report Date:
April 25, 2014





(2) British Columbias reliance on natural resources, particularly the forestry sector, was a contributing factor
to the economic contraction experienced in 2009. In addition, the natural gas and mining sectors remain
important drivers of employment and economic activity in certain regions of the Province, exhibiting
considerable volatility.

(3) Public sector compensation accounts for over 57% of total government spending. With several collective
bargaining agreements coming up for renewal over the next year, the governments ability to achieve affordable
compensation settlements will be a critical component of the fiscal plan. The current wage mandate does not
provide for any wage or salary increases in the current fiscal year, presenting a key risk to the plan. Additionally,
an ongoing legal dispute with teachers regarding class size and composition has the potential to boost
compensation costs further, although this may be partially mitigated through the use of budget contingencies.

2014-15 Budget

Health
41.1%
Education
26.2%
Social
services
8.2%
Transportation
3.6%
Other
17.0%
Interest
3.9%
2014-15 DBRS-Adjusted Expenditures
(Total: $45.4 billion)
(0.8%) (0.8%)
(1.2%)
(1.6%)
(1.3%)
(2.1%)
(1.1%)
0.6%
1.3%
(3%)
(2%)
(1%)
0%
1%
2%
DBRS-Adjusted Surplus (Deficit)-to-GDP


British Columbia continues to demonstrate strong fiscal discipline and remains in an enviable position relative
to provincial peers, as the latest budget points to a small surplus of $184 million in 2014-15. On a DBRS-
adjusted basis, this translates into a deficit of $1.8 billion, or a very manageable 0.8% of GDP, after DBRS
makes adjustments to: (1) recognize capital expenditures on a cash basis, rather than as amortized; (2) exclude
the net change in regulatory accounts from income for British Columbia Hydro & Power Authority (BC Hydro);
and (3) to exclude the forecast allowance and non-recurring items.

Provincial revenue growth is projected to be moderate in 2014-15 at 2.8%. After implementing a number of tax
changes to shore up revenues in last years budget, the government opted for only minor revenue measures in
the current fiscal year, including an increase to tobacco tax rates, beginning April 1, 2014, and Medical Services
Plan premiums, beginning January 1, 2015. However, these increases will be more than offset by the
implementation of a previously announced early childhood tax credit starting in 2015-16. Personal income tax
(PIT) and sales tax receipts will account for the bulk of the growth in tax revenues. Federal transfers will
experience a decline owing to reduced funding for certain cost-shared programs and the move to equal per
capita health transfers, which is disadvantageous for British Columbia. Natural resource revenues are forecast
to rise by more than 6.0%, driven by a combination of higher forestry and natural gas royalties, but at just over
$3.0 billion, they remain well-below pre-recession highs.

Total DBRS-adjusted spending is budgeted to be just slightly below anticipated revenue growth in 2014-15.
Health-care spending continues to absorb the bulk of new funds and is forecast to rise by 2.9%. Additional
funding is also provided to mainly address caseload pressures for individuals with developmental disabilities,
which will drive social services costs up by 1.0%. Natural resources and economic development will experience
an increase of 5.5%, in part to provide support for LNG development. Similarly, transportation costs are
projected to rise by 5.2%, reflecting higher amortization costs as a result of the completion of the South Fraser
Perimeter Road and increased grants provided to the South Coast British Columbia Transportation Authority
(rated AA, Stable). The Province has been very successful at containing public sector compensation costs, and
a new bargaining framework the Economic Stability Mandate targets longer-term agreements which provide
for modest wage increases and the potential for further wage enhancements should real GDP growth outperform
expectations.






4 Public Finance: Provinces and Municipalities
Province of
British Columbia

Report Date:
April 25, 2014





Taxpayer-supported capital spending is projected to rise by 16.3%, the highest level since 2010-11, although
DBRS notes this is partly driven by underspending in 2013-14, as certain projects have been shifted into the
current fiscal year.

Outlook
The Provinces medium-term plan points to the continuation of small surpluses through 2016-17. On a DBRS-
adjusted basis, these are expected to translate into deficits of 0.5% of GDP or less, leaving British Columbia in
an enviable fiscal position relative to provincial peers. An inability to execute renewed collective bargaining
agreements with key public sector unions within budget parameters, persistently low inflation (which ultimately
reduces growth in the provincial tax base) or economic underperformance of key trading partners constitute the
key risks to the fiscal plan, although these risks are partly mitigated by budget contingencies.

2013-14 Preliminary Results

Based on preliminary results, the Province reported a surplus of $175 million in 2013-14. This translates into a
DBRS-adjusted deficit of $1.8 billion, or 0.8% of GDP, and marks a moderate improvement from budget and
one of the best fiscal results among provinces. Although total revenues grew by 3.9%, this was somewhat short
of expectations, partly owing to a low inflationary environment. In fact, British Columbia recorded its first-
ever year of deflation on record dating back to 1980, partly attributable to the reinstatement of the provincial
sales tax (PST). Despite a handful of tax measures announced in last years budget, tax revenues were relatively
unchanged in 2013-14. Corporate income tax receipts grew by 8.9% from the prior year and exceeded budget,
in part due to positive prior-year adjustments. Property transfer taxes also exceeded expectations due to a better
than expected real estate market. Offsetting these positive variations, however, was a 2.1% decline in PIT
receipts mainly due to negative prior-year adjustments and an 8.1% drop in provincial sales tax proceeds
primarily due to the reimplementation of PST.

Total DBRS-adjusted spending was relatively well-contained, rising by just 1.8% as the Province made efforts
to identify savings in light of slower than planned revenue growth. Expenditures on both health care and
education came in under budget, rising by 3.8% and 2.8%, respectively, with the former benefiting from lower
costs for generic drugs and regional services. Spending on social services declined by 8.1% year over year,
reflecting the elimination of low-income tax credits coinciding with the restoration of the provincial sales tax.
The taxpayer-supported capital program was also underspent by $257 million, which helped to reduce debt
needs. Interest costs rose more than 10%, but at just 4.1% of total revenues, remain very affordable.

Debt Profile

In 2013-14, total DBRS-adjusted debt
(defined as tax-supported debt plus unfunded
pension liabilities) is estimated to have grown
by 8.8% to $46.4 billion. Although
meaningful, this was slower than anticipated
as a result of lower than anticipated capital
spending as some projects were moved into
2014-15 from 2013-14. Combined with
downward revisions to nominal GDP by
Statistics Canada, the higher debt resulted in
a debt-to-GDP ratio of 20.6%, up from 19.4%
in 2012-13. This represents the third-lowest
debt burden among Canadian provinces.
Floating-rate debt accounted for 28% of tax-
supported debt as of March 31, 2014, a
notable increase from just 20% a year earlier.


20.4% 20.6%
19.4%
18.1%
17.6% 17.7%
15.3%
15.7%
16.1%
10%
15%
20%
25%
DBRS-Adjusted Debt-to-GDP






5 Public Finance: Provinces and Municipalities
Province of
British Columbia

Report Date:
April 25, 2014





Nevertheless, the Province maintains a relatively smooth maturity profile and no unhedged foreign-currency
debt, which helps provide stability to borrowing costs.

Outlook
With the Province now back in balance on its reporting basis, debt growth is expected to slow markedly going
forward. Based on the budget, DBRS-adjusted debt is forecast to rise by $1.4 billion, or 2.9%, in 2014-15.
When combined with a stronger outlook for nominal GDP growth, this points to a slightly declining debt-to-
GDP ratio. Gross borrowing requirements are estimated at $5.3 billion, net of the forecast allowance, and
comprise refinancing needs ($2.5 billion), tax-supported capital ($2.1 billion), borrowing for self-supported
Crown corporations ($1.7 billion) and other working capital requirements. The Province has embarked on an
effort to improve cash management practices and is currently working with schools, universities, colleges and
health authorities to make better use of their cash balances. This will help to reduce debt needs even further. At
the time of writing, approximately 11% of borrowing needs have been fulfilled thus far.

Based on the medium-term outlook, the continuation of small fiscal surpluses and projected declines in capital
spending will help to significantly contain debt. As a result, DBRS-adjusted debt is expected to fall below 20% of
GDP by 2016-17. This remains meaningfully above the low of 15.3% reached in 2008-09, prior to the recession, but
is very manageable for the credit profile.

Economy

*Ba se d on ma jor Ca na dia n ba nks' fore c a sts a t the time of this re port. **Sta tistic s Ca na da , CANSIM 379- 0028.
0%
1%
2%
3%
4%
BC AB SK MB ON QC NB NS PE NL
Real GDP Growth Outlooks*
2014 2015
manuf .,
6.7%
construction
, 7.8%
transpo. &
warehouse,
5.4%
wholesale &
retail,
10.0%
finance,
insurance,
real estate,
24.0%
other
services,
30.9%
pub.
admin.,
6.5%
mining, oil &
gas, 4.2%
ag. &
forestry,
1.8%
other
goods,
2.6%
2012 Nominal GDP Breakdown**

British Columbias economy demonstrated sluggish growth in 2013 as real GDP advanced by only an estimated
1.4%. According to Statistics Canadas survey of private and public investment intentions, non-residential
construction, machinery and equipment spending was relatively flat in 2013. Meanwhile, housing starts fell by
1.5% and remained somewhat below the ten-year average. The labour market was correspondingly soft, with
employment declining slightly year over year. Reduced labour force participation saw an improvement in the
unemployment rate to 6.6%, from 6.7% a year earlier; however, this was still above pre-recession lows and the
highest rate west of Ontario. Gains in full-time employment were more than offset by losses in part-time jobs,
with particular weakness exhibited in manufacturing, health care and social assistance. As a result, retail sales
grew by just 1.8%, below the national average. Although slower than expected, merchandise exports increased
by 6.4% by value, driven by gains in forestry products and metal ores and non-metallic minerals, which helped
to partially offset weakness in the domestic economy.

Outlook
For 2014, the Province has assumed real GDP growth of 2.0%, which appears to be somewhat conservative in
relation to the private sector consensus tracked by DBRS. The domestic economy is expected to remain
relatively soft with any improvement coming from a strengthening external environment. Based on Statistics
Canadas survey of investment intentions, non-residential construction, machinery and equipment spending is
projected to fall by 1.5% in 2014. Through the first three months of the calendar year, the labour market has
shown signs of improvement, with the unemployment rate falling to 5.8% (seasonally adjusted), although the
labour force has continued to decline on a year-over-year basis. In January, retail trade was up 4.0% from a
year ago, though it is still too early to determine if this marks the start of a stronger trend. As of February 2014,
exports have grown 11.9% by value (seasonally adjusted) from the prior year.






6 Public Finance: Provinces and Municipalities
Province of
British Columbia

Report Date:
April 25, 2014





Most forecasters expect growth to continue improving in 2015. The Province has assumed real GDP growth of
2.3% for 2015, which is prudently below the current private sector consensus of 2.7%. Budget 2014 also
emphasizes the potential for liquefied natural gas (LNG) development over the longer term. Given British
Columbias proximity to Asia, abundant supply of natural gas and relatively cooler climate, the government
believes it has a competitive advantage in developing an LNG export industry, which could provide long-term
benefits to the Province in the form of higher employment and provincial revenues. However, DBRS notes that
any positive economic benefits have not been built into budget projections. A slowdown in external demand
for British Columbias exports, disruption in the stability of global financial markets or weak inflation constitute
key downside risks for the economic outlook.


Economic Statistics For the calendar year
2015P 2014P 2013 2012 2011 2010 2009
Nominal GDP ($ millions) 244,067 234,033 225,794 219,994 215,148 205,996 195,966
Nominal GDP growth 4.3% 3.6% 2.6% 2.3% 4.4% 5.1% (3.9%)
Real GDP growth 2.3% 2.0% 1.4% 1.5% 2.7% 3.3% (2.5%)
Population (thousands) 4,682 4,629 4,582 4,543 4,499 4,466 4,411
Population growth 1.2% 1.0% 0.9% 1.0% 0.7% 1.3% 1.4%
Employment (thousands) 2,360 2,331 2,308 2,313 2,275 2,257 2,218
Unemployment rate 6.8% 6.7% 6.6% 6.7% 7.5% 7.6% 7.7%
Housing starts 27,800 27,800 27,054 27,465 26,400 26,479 16,077
Retail sales ($ millions) 66,812 64,553 62,673 61,565 60,406 58,549 55,585
Inflation rate (CPI) 1.9% 1.5% (0.1%) 1.1% 2.4% 1.3% 0.0%
Household income per capita ($) n.a. n.a. n.a. 41,239 39,987 38,465 37,905
n.a. = not available.
Source: St at ist ics Canada (act uals), CMHC for housing est imat es. For ret ail sales, 2014P and 2015P are based on t he budget forecast growt h
rat e applied t o 2013 St at ist ics Canada act uals. Province of B.C. all ot her est imat es. P = Project ed.







7 Public Finance: Provinces and Municipalities
Province of
British Columbia

Report Date:
April 25, 2014





Province of British Columbia

Budget Summary ($ millions) Budget Projected Budget
2014-15 2013-14 2013-14 2012-13 2011-12 2010-11
Revenue 43,637 42,431 42,488 40,827 40,753 39,575
Program expenditure (43,663) (42,498) (43,021) (41,881) (42,677) (40,733)
Program surplus (deficit) (26) (67) (533) (1,054) (1,924) (1,158)
Interest costs (1,756) (1,732) (1,764) (1,567) (1,624) (1,604)
DBRS-Adjusted Surplus (Deficit) (1,782) (1,799) (2,297) (2,621) (3,548) (2,762)
DBRS adjustments:
Non-recurring revenue (expenditures) 214 436 498 6 14 15
Capital assets bought less amortized 1,825 1,362 1,611 1,070 1,414 2,059
Adjustment for BC Hydro deferrals (1) 127 276 491 399 306 447
Forecast allowance (200) (100) (150) - - -
Surplus (Deficit), As Reported 184 175 153 (1,146) (1,814) (241)
Tax-supported capital expenditures 4,030 3,466 3,723 3,279 3,565 4,110
Gross borrowing requirements (inc. Crown corps.)* 5,271 7,470 8,253 5,910 7,885 9,426
Net requirements (t ax-support ed only)* 3,240 4,543 5,219 3,523 4,869 4,718
Total Tax-Supported Debt** 47,794 46,435 47,058 42,688 38,976 36,327
Selected Financial Indicators (DBRS-Adjusted)
Debt** as a % of GDP 20.4% 20.6% 20.3% 19.4% 18.1% 17.6%
Surplus (deficit) as % of GDP (0.8%) (0.8%) (0.8%) (1.2%) (1.6%) (1.3%)
Surplus (deficit) as % of revenue (4.1%) (4.2%) (4.2%) (6.4%) (8.7%) (7.0%)
Interest costs as % of revenue 4.0% 4.1% 4.1% 3.8% 4.0% 4.1%
Total tax revenue as % of revenue 50.8% 49.7% 49.6% 51.6% 49.4% 48.1%
Federal transfers as % of revenue 16.9% 17.6% 17.4% 17.2% 18.9% 20.2%
Natural resource revenue as % of revenue 6.9% 6.7% 6.6% 6.1% 6.9% 6.9%
Program expenditure as a % of revenue 100.1% 100.2% 100.1% 102.6% 104.7% 102.9%
Health expenditures as % of expenditures 41.1% 41.1% 41.1% 40.3% 38.2% 37.8%
Total revenue growth 2.8% 3.9% 5.2% 0.2% 3.0% 7.9%
Total expenditure growth 2.7% 1.8% 3.1% (1.9%) 4.6% 3.6%
Program expenditure growth 2.7% 1.5% 2.7% (1.9%) 4.8% 3.7%
**Tax-support ed debt +municipal debt +unfunded pension liabilit ies.
(1) DBRS report s B.C. Hydro net income before regulat ory account t ransfers for comparabilit y wit h ot her provincially-owned
ut ilit ies. *Excludes borrowing requirement project ed for forecast allowance.


Party in Power: Liberal Party Legislature Seats: 49 of 85
Premier: Christy Clark Election required by: May 2017
Background Political Information








8 Public Finance: Provinces and Municipalities
Province of
British Columbia

Report Date:
April 25, 2014





Province of British Columbia

Budget Projected Budget
Revenues ($ millions) 2014-15 2013-14 2013-14 2012-13 2011-12 2010-11
Personal income tax 7,491 6,832 7,271 6,977 6,427 5,805
Retail sales tax 5,964 5,574 5,927 6,068 5,930 5,614
Corporate taxes 2,798 2,874 2,544 2,638 2,408 2,422
Property & property transfer taxes 2,960 2,969 2,768 2,743 2,857 2,775
Fuel tax 936 929 926 890 928 940
Carbon tax 1,228 1,212 1,187 1,120 959 741
Tobacco tax 780 713 709 614 636 735
Total Tax Revenue 22,157 21,103 21,332 21,050 20,145 19,032
Forests 785 674 593 562 482 436
Natural gas, land tenures & minerals 1,594 1,517 1,606 1,343 1,796 1,749
Water and other resources 631 644 647 568 534 543
Total Natural Resource Revenue 3,010 2,835 2,846 2,473 2,812 2,728
Medical services plan premiums 2,271 2,156 2,156 2,047 1,919 1,787
Other health care-related fees 332 329 326 327 324 308
Post-secondary education fees 1,489 1,427 1,394 1,345 1,294 1,237
Motor vehicle & other fees, licences 1,244 1,247 1,236 1,177 1,188 1,102
Investment earnings (1) 269 303 296 350 263 195
Miscellaneous 2,758 2,942 3,116 2,623 2,715 2,700
B.C. Liquor Distribution Branch (net recurring income) 862 858 851 930 909 891
B.C. Hydro (net recurring income) 455 269 54 110 252 144
B.C. Lottery Corporation (net recurring income) 1,183 1,163 1,162 1,118 1,099 1,097
Earnings (losses) of other self-supp. agencies 244 327 239 235 126 357
Total Own-Source Revenue 36,274 34,959 35,008 33,785 33,046 31,578
Canada Health & Social Transfer 5,840 5,840 5,883 5,442 5,384 5,176
Other federal payments 1,523 1,632 1,597 1,600 2,323 2,821
Total Federal Transfer Payments 7,363 7,472 7,480 7,042 7,707 7,997
DBRS-Adjusted Revenues 43,637 42,431 42,488 40,827 40,753 39,575
Expenditures
Health 18,683 18,162 18,426 17,502 16,917 15,992
Education 11,899 11,852 11,891 11,528 11,228 11,165
Social services 3,703 3,666 3,641 3,990 3,940 3,786
Protection of persons and property 1,393 1,509 1,378 1,539 1,512 1,448
Natural resources & economic development 1,757 1,665 1,822 2,092 1,873 2,349
Transportation 1,629 1,549 1,555 1,552 1,544 1,580
Other (2) 1,594 1,425 1,452 1,346 3,014 1,208
General government 1,180 1,308 1,245 1,262 1,235 1,146
Tax-supported capital spending less amortization (3) 1,825 1,362 1,611 1,070 1,414 2,059
DBRS-Adjusted Program Expenditures 43,663 42,498 43,021 41,881 42,677 40,733
Total taxpayer-supported interest costs (4) 1,764 1,757 1,775 1,673 1,714 1,678
Less sinking fund earnings (8) (25) (11) (106) (90) (74)
Net Interest Costs 1,756 1,732 1,764 1,567 1,624 1,604
DBRS-Adjusted Expenditures 45,419 44,230 44,785 43,448 44,301 42,337
DBRS-Adjusted Surplus (Deficit) (1,782) (1,799) (2,297) (2,621) (3,548) (2,762)
DBRS adjustments:
Non-recurring revenue (expenditures) (5) 214 436 498 6 14 15
Hydro adjustment 127 276 491 399 306 447
Capital assets bought less amortized (3) 1,825 1,362 1,611 1,070 1,414 2,059
Forecast allowance (200) (100) (150) - - -
Surplus (Deficit), As Reported 184 175 153 (1,146) (1,814) (241)
(1) Excludes s inking fund earnings , which are netted agains t interes t charges .
(2) Includes co ntingencies vo te.
(3) Acquired capital as s ets are amo rtized o ver their us eful lives ; this adjus tment co nverts amo rtizatio n to pay-as -yo u-go tax-s uppo rted capital s pending.
(4) Includes the interes t po rtio n o f debt s ervice grants fo r s cho o ls , ho s pitals , univers ities , and trans it/SkyTrain that are included in CRF pro gram s pending.
(5) Includes releas e o f s urplus as s ets in 2013-14 and 2014-15.







9 Public Finance: Provinces and Municipalities
Province of
British Columbia

Report Date:
April 25, 2014





Province of British Columbia

Summary Financial Statements
Balance Sheet (DBRS adjusted*)
($ millions) As at March 31
Financial Assets 2014 2013 2012 Liabilities 2014 2013 2012
Cash & investments 2,746 3,149 3,223 Accounts payable 8,815 8,737 8,764
A/R & inventory 2,963 2,505 2,440 Deferred revenue 9,236 9,923 10,488
Equity in gov't enterprises 8,171 7,534 6,994 Unfunded pensions 165 165 110
Loans, advances, etc. 2,006 1,681 1,624 Tax-supported debt 42,562 39,828 36,012
Other assets 5,880 5,752 5,327 Self-supported debt 19,269 17,011 14,942
Loans recoverable from agencies 19,061 16,907 14,846 Total Liabilities 80,047 75,664 70,316
Total Financial Assets 40,827 37,528 34,454 Net Debt (39,220) (38,136) (35,862)
40,827 37,528 34,454
Public Sector Debt (1) As at March 31
($ millions) 2015B 2014P 2013 2012 2011 2010 2009 2008
Provincial direct debt 28,609 28,650 26,244 23,698 21,967 21,349 18,813 19,753
Economic development debt 11,048 10,231 9,421 8,644 8,095 7,502 6,831 6,143
Other guaranteed debt (2) 3,418 2,994 2,517 2,317 1,759 1,117 758 653
Net Tax-Supported Debt (Per Province) 43,075 41,875 38,182 34,659 31,821 29,968 26,402 26,549
Net municipal debt (non-guaranteed) (3) 4,554 4,395 4,341 4,207 4,419 4,600 4,761 4,474
Net Tax-Supported Debt (DBRS-Adjusted) 47,629 46,270 42,523 38,866 36,240 34,568 31,163 31,023
Self-supporting Crown corporations:
B.C. Hydro & Power Authority 16,856 15,638 14,167 12,978 11,710 10,792 9,054 7,633
B.C. Lotteries, B.C. Transmission & others 1,187 864 857 777 475 581 457 455
Transportation Investment Corporation 3,420 3,266 2,610 1,779 1,148 544 20 -
Total public sector net debt 69,092 66,038 60,157 54,400 49,573 46,485 40,694 39,111
Unfunded Pension Liabilities** 165 165 165 110 87 53 3 2
Per Capita
Net tax-supported debt 10,290 10,098 9,359 8,639 8,115 7,837 7,165 7,230
Net tax-supported debt + unfund. pension liab. 10,325 10,134 9,396 8,663 8,134 7,849 7,166 7,230
As a % of GDP
Net tax-supported debt 20.4% 20.5% 19.3% 18.1% 17.6% 17.6% 15.3% 15.7%
Net tax-supported debt + unfund. pension liab. 20.4% 20.6% 19.4% 18.1% 17.6% 17.7% 15.3% 15.7%
Gross Debt Breakdown by Currency (4)
Cdn$ pay n.a. 100% 100% 99% 99% 99% 98% 99%
Non-Cdn$ pay n.a. 0% 0% 1% 1% 1% 2% 1%
Fixed/Floating Rate Breakdown (4) (5)
Fixed rate n.a. 72% 80% 78% 75% 79% 77% 76%
Floating rate n.a. 28% 20% 22% 25% 21% 23% 24%
Debt Maturity Profile (4) (6) 2013-14 2014-15 2015-16 2016-17 2017-18 2018-23 2023+ Total
Net tax-supported debt (Cdn$ millions) 4,999 2,423 1,541 1,775 2,165 12,334 16,525 41,762
Net tax-supported debt (%) 12.0% 5.8% 3.7% 4.3% 5.2% 29.5% 39.6% 100.0%
Unfunded Pension Liabilities Actuarial Value
(as at March 31, 2013) Valuation Date ($ millions)
Colleges Pension Plan (surplus) Aug. 31, 2009 0
Municipal Pension Plan (surplus) Dec. 31, 2009 0
Public Service Pension Plan (surplus) Mar. 31, 2011 0
Teachers Pension Plan Dec. 31, 2011 163
MLA Superannuation Plan 2
Total unfunded pension liabilities 165
(1) Debt numbers are report ed net of sinking fund asset s and pre-financing (warehouse borrowing), and excludes t he forecast allowance.
(2) Includes t ax-support ed Crown corporat ions and agencies, ot her fiscal agency loans, and various loan guarant ees.
(3) December year-end. Net of sinking fund asset s and ot her liquid market able securit ies.
(4) All amount s are net of hedges (if any). Excludes municipal debt .
(5) Includes all debt t hat mat ures or is repriced wit hin 12 mont hs.
(6) Debt mat urit y profile is as of t he budget dat e of February 18, 2014.
As at March 31









10 Public Finance: Provinces and Municipalities
Province of
British Columbia

Report Date:
April 25, 2014





Ratings

Debt Rating Rating Action Trend
Issuer Rating AA (high) Confirmed Stable
Short-Term Debt* R-1 (high) Confirmed Stable
Long-Term Debt* AA (high) Confirmed Stable
*Issued/guaranteed by the Province.

Rating History

Current 2013 2012 2011 2010 2009
Issuer Rating AA (high) AA (high) AA (high) NR NR NR
Short-Term Debt R-1 (high) R-1 (high) R-1 (high) R-1 (high) R-1 (high) R-1 (high)
Long-Term Debt AA (high) AA (high) AA (high) AA (high) AA (high) AA (high)

Related Research

DBRS Confirms British Columbia at AA (high) and R-1 (high), Trends Stable, April 17, 2014.
2013 Canadian Federal and Provincial Governments Overview: Resolve Holding But Showing Signs of
Fatigue, December 23, 2013.








Notes:
All figures are in Canadian dollars unless otherwise noted.

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Generally, Issuer Ratings apply to all senior unsecured obligations of an applicable issuer, except when an issuer has a
significant or unique level of secured debt.

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