Mr. Speaker, I am in receipt of Return to Written Question 10-17(5) asked by Ms. Bisaro on February 20, 2014, to the Honourable J. Michael Miltenberger, Minister of Finance, regarding tax revenues in the 2014-2015 Main Estimates.
The 2014-15 budget amount for personal income tax is $104.8 million and for corporate income tax is $53.1 million. These amounts are found in the 2014-15 Main Estimates, Department of Finance, pages 5 to 9. As discussed in Committee of the Whole on February 28, 2014, the 2014-15 total revenues in the 2014-15 Main Estimates are $38 million lower than those included in the fiscal framework presented to the Standing Committee on Priorities and Planning in December 2013 due to decreases in the corporate and personal income tax forecasts.
The anticipated loss of $30 million refers to income tax forecast beyond 2014-15, as noted in the 2014-15 budget address, page 3, second paragraph: “Both personal and corporate income tax revenue estimates for 2013-14 are lower than what was forecast in the 2013-14 budget, and beyond 2014-15 both personal and corporate income tax revenue forecasts have been reduced by a combined $30 million.”
The $30 million downward revision in income tax forecasts is a result of downward revisions to 2013-14 income tax and changes to growth estimates going forward.
From the 2013-14 Main Estimates to the 2014-2015 Main Estimates the 2013-14 personal income tax forecast has been revised downward $11 million from $98.1 million to $87.1 million and the 2013-14 corporate income tax forecast has been revised downward $9 million from $88 million to $79 million.
On January 14, 2014, the Standing Committee on Priorities and Planning was advised that the revenue forecast was being revised downward and were informed that the decline in 2013-14 personal income tax revenues would decrease the personal income forecasts beyond 2014-15 by an average of $9 million annually and the corporate income tax forecasts by $20 million annually.
Total revenues estimated for the fiscal year 2014-15 are $1.845,501 billion as shown in the 2014-2015 Main Estimates, Summary of Revenues table, page vi.
To adjust for the anticipated revenue decreases, expenditures will be constrained through a combination of efforts on both the operating and capital budgets as a result of the reduced tax revenue forecast as well as the increased contribution to the Heritage Fund from 5 to 25 percent of resource revenues.
In 2014-15 a passive restraint target of $6.8 million will limit growth in operating expenditures. Going forward, $30 million in operating expenditure savings will be identified through the 2015-16 budget planning cycle. It is anticipated that this target can be achieved through a combination of limiting forced growth and re-profiling of existing resources for new initiatives.
The impact of the decrease in the revenue forecast on the capital budget was addressed in the fiscal framework by eliminating the escalation in capital planning in 2016-17, as indicated in the January 14, 2014, presentation to the Standing Committee on Priorities and Planning. Thank you, Mr. Speaker.
