B.C. auditor general says accounting fix should improve tax revenue estimates

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This article was published 11/03/2024 (636 days ago), so information in it may no longer be current.

VICTORIA – British Columbia auditor general Michael Pickup says the provincial government is using more up-to-date information to forecast income tax revenue, something he expects to improve financial estimates that have routinely been off by more than $1 billion every year.

He says in an audit of the government’s 2022-2023 financial statements that the change should reduce the size of adjustments to estimates of tax revenue which he says have been “frequently off target” for the last decade.

In 2022-2023, the government had to reduce its reported surplus by $1.86 billion after it changed the way it estimates personal and corporate income tax revenue.

Pickup says the way the government estimates tax revenue from individuals and corporations is important because it makes up about a third of the province’s revenue, amounting to about $26.5 billion last fiscal year.

The audit says that for the current fiscal year, the government consulted the auditor general’s office to update their year-end estimates by using federal tax return filings, a method the report said was “much less subjective.”

He says in a briefing that estimating tax revenue “remains challenging,” and the government’s methods still need to be “sharpened.”

Pickup also says government decisions about BC Hydro have created accounting challenges, and that methods used to account for $320 million in customer credits in 2022 weren’t independently reviewed by the B.C. Utilities Commission.

Pickup says the initial accounting of the $100 credit for all residential and commercial customers was “incorrect,” and BC Hydro should alert government when its directions pose a risk to the Crown corporation’s accounting methods.

This report by The Canadian Press was first published Mach 11, 2024.