MANAGEMENT OF PUBLIC FUNDS AND DEBT

Summary

$000

Estimates 2001/02¹

Vote

Estimates 2002/03

Net

No.

Gross

Recoveries

Net

OPERATING EXPENSE

Voted Appropriations

823,000

Management of Public Funds and Debt............................

1,999,924

(1,079,924)

920,000

823,000

Total Voted Expense ...................................

1,999,924

(1,079,924)

920,000

Special Accounts (Statutory Authority)

—

None...........................................................................

—

823,000

Total Operating Expense ..............................

1,999,924

(1,079,924)

920,000

—

Fulltime Equivalent (FTE) Employment

—

TOTAL EXPENSE BY

GROUP ACCOUNT CLASSIFICATION

2,831,507

Other Expenses...........................................................

2,850,174

(774,900)

Internal Recoveries.......................................................

(850,250)

(1,233,607)

External Recoveries......................................................

(1,079,924)

823,000

Total Expense ..............................................

1,999,924

(1,079,924)

920,000

CAPITAL AND OTHER FINANCIAL REQUIREMENTS

Disbursements

Receipts

Net

—

Prepaid Capital Advances ²...........................................

—

Capital Expenditures ³ ..................................................

—

Loan, Investment and Other Requirements ⁴.....................

—

Total .....................................................................

—

NOTES

¹ For comparative purposes only, figures shown for 2001/02 expense, FTEs and capital expenditures have been restated to be consistent with the presentation of the 2002/03 Estimates. Schedule A presents a detailed reconciliation.

² Details of prepaid capital advances are presented in Schedule C.

³ Details of capital expenditures are presented in Schedule D.

⁴ Details of loan, investment and other requirements are presented in Schedule E.



Vote 46			MANAGEMENT OF PUBLIC FUNDS AND DEBT
Classification by Sub-Vote

	Estimates 2001/02					Estimates 2002/03
	$000	$000				$000	$000

	822,996			Cost of Borrowing for Government Operating and Capital Financing Purposes (net of recoveries).....................................................			919,996
		822,991		— Government Operating Purposes.........................................		919,991
		1		— Schools Capital Financing...................................................		1
		1		— Post-Secondary Institutions Capital Financing........................		1
		1		— Health Facilities Capital Financing........................................		1
		1		— Public Transit Capital Financing............................................		1
		1		— SkyTrain Extension Capital Financing...................................		1
	1			Cost of Borrowing for Relending to Government Bodies (net of recoveries)..................................................................			1
	1			Cost of Financial Agreements Entered into on Behalf of Government Bodies (net of recoveries)...........................................................			1
	1			Provincial Treasury Revenue Program (net of recoveries)...............			1
	1			Cost of Unallocated Borrowing Under the Warehouse Program (net of recoveries)...................................................................			1
	823,000				Total Vote ............................................................		920,000

VOTE DESCRIPTION This vote provides for the cost of managing public funds and debt, and includes the following: (a) Cost of Borrowing for Government Operating and Capital Financing Purposes - This sub-vote provides for the cost of interest on the direct debt of the province incurred or assumed for government operating purposes and for education, health facility and public transit capital financing purposes as follows: (i) Government Operating Purposes - provides for interest costs on direct debt incurred or assumed for operating purposes, and for associated costs and fees charged for the borrowing and management of government funds and debt instruments. Recoveries from the use of financial instruments such as interest rate swaps and forward rate agreements, and revenue earned from sinking fund investments and prefunding operations are offset against the related interest expenditure. Costs associated with the student loans program are recovered from the debt servicing appropriation in the Ministry of Advanced Education. (ii) Schools Capital Financing - provides for interest costs and associated costs and fees for approved capital construction projects, and bus and equipment purchases. Recoveries from the use of financial instruments such as interest rate swaps and forward rate agreements, and revenue earned from sinking fund investments are offset against the related interest expenditure. The remaining costs are recovered from the debt servicing appropriation in the Ministry of Education. (iii) Post-Secondary Institutions Capital Financing - provides for interest costs and associated costs and fees for approved capital costs of new buildings, renovations and improvements to universities, colleges, institutes and agencies. Recoveries from the use of financial instruments such as interest rate swaps and forward rate agreements, and revenue earned from sinking fund investments are offset against the related interest expenditure. The remaining costs are recovered from the debt servicing appropriation in the Ministry of Advanced Education. (iv) Health Facilities Capital Financing – provides for interest costs and associated costs and fees for approved capital costs of health facility projects. Recoveries from the use of financial instruments such as interest rate swaps and forward rate agreements, and revenue earned from sinking fund investments are offset against the related interest expenditure. The remaining costs are recovered from the debt servicing appropriation in the Ministry of Health Services. (v) Public Transit Capital Financing – provides for interest costs and associated costs and fees for debt related to capital expenditures for selected public passenger transit services in communities around the province. Recoveries from the use of financial instruments such as interest rate swaps and forward rate agreements, and revenue earned from sinking fund investments are offset against the related interest expenditure. The remaining costs are recovered from the Public Transit vote appropriation in the Ministry of Transportation. (vi) SkyTrain Extension Capital Financing – provides for interest costs and associated costs and fees for debt related to rapid transit capital expenditures in the Lower Mainland. Recoveries from the use of financial instruments such as interest rate swaps and forward rate agreements are offset against the related interest expenditure. The remaining costs are capitalized as interest during construction and are recovered from the Prepaid Capital Advances (Rapid Transit Project 2000) financing transaction in the Ministry of Transportation.

Vote 46
MANAGEMENT OF PUBLIC FUNDS AND DEBT

Group Account Classification
	Estimates 2001/02 $000	Estimates 2002/03 $000

COST OF BORROWING FOR GOVERNMENT OPERATING AND CAPITAL FINANCING PURPOSES

Other Expenses..............................................................................................................................	1,845,191	1,916,140
Internal Recoveries..........................................................................................................................	(774,900)	(850,250)
External Recoveries.........................................................................................................................	(247,295)	(145,894)
Total ..................................................................................................................................	822,996	919,996

Vote 46

(b) Cost of Borrowing for Relending to Government Bodies - This sub-vote provides for the cost of interest on borrowings under the fiscal agency program, and all associated costs. These costs are fully recovered from government bodies. Recoveries from the use of financial instruments such as interest rate swaps and forward rate agreements are offset against the related interest expenditure.

(c) Cost of Financial Agreements Entered Into on Behalf of Government Bodies - This sub-vote provides for the cost of financial agreements entered into by the government on behalf of government bodies and all associated costs. These agreements are in relation to borrowings of the government bodies that do not involve the provincial government, and to commodity derivatives. These costs are fully recovered from government bodies. Recoveries from the use of financial instruments such as interest rate swaps and forward rate agreements are offset against the related interest expenditure.

(d) Provincial Treasury Revenue Program - This sub-vote provides for costs associated with special revenue programs. The programs are structured so that interest (and other earnings) on program assets exceed interest (and other payments) on program liabilities. Any profit or loss is transferred to the Provincial Treasury Revenue Special Account. Recoveries may be made from investment earnings of the Consolidated Revenue Fund. Recoveries from the use of financial instruments such as interest rate swaps and forward rate agreements are offset against the related interest expenditure.

(e) Cost of Unallocated Borrowing Under the Warehouse Program - This sub-vote provides for the costs associated with debt issued in advance of requirements. At the time of borrowing, the debt has not been allocated to the province or any government body. The program is structured so that interest (and other earnings) on program assets offsets interest (and other payments) on program liabilities. Recoveries from the use of financial instruments such as interest rate swaps and forward rate agreements are offset against the related interest expenditure. There is no profit or loss associated with the program.

Vote 46
MANAGEMENT OF PUBLIC FUNDS AND DEBT

Group Account Classification
	Estimates 2001/02 $000	Estimates 2002/03 $000

COST OF BORROWING FOR RELENDING TO GOVERNMENT BODIES

Other Expenses..............................................................................................................................	901,076	868,808
External Recoveries.........................................................................................................................	(901,075)	(868,807)
Total ..................................................................................................................................	1	1


COST OF FINANCIAL AGREEMENTS ENTERED INTO ON BEHALF OF GOVERNMENT BODIES

Other Expenses..............................................................................................................................	133	2,119
External Recoveries.........................................................................................................................	(132)	(2,118)
Total ..................................................................................................................................	1	1


PROVINCIAL TREASURY REVENUE PROGRAM

Other Expenses..............................................................................................................................	6,746	4,983
External Recoveries.........................................................................................................................	(6,745)	(4,982)
Total ..................................................................................................................................	1	1


COST OF UNALLOCATED BORROWING UNDER THE WAREHOUSE PROGRAM

Other Expenses..............................................................................................................................	78,361	58,124
External Recoveries.........................................................................................................................	(78,360)	(58,123)
Total ..................................................................................................................................	1	1