Ministry 2002/03 Annual Service Plan Report -- Ministry of Finance

Performance Reporting — Continued

Core Business Area 2: Effective financial management and regulation

Goal/Objective: Support business development

*Performance Measure: Number of regulatory requirements*
Rationale:	This performance measure was intended to demonstrate the performance of the province's overall economic growth. As described below, the measure has been dropped in the current service plan and is now included as an overall government measure in the Provincial Government Strategic Plan 2003/04 – 2005/06.
Update:	The 2001/02 baseline has been updated to reflect Statistics Canada revisions in November 2002. Statistics Canada results are for the calendar year which ends in the fiscal year. The initial 2002 results were released.
Measure Status:	Discontinued measure in Service Plan 2003/04 – 2005/06 The Government Strategic Plan now includes this measure and has established a target of a 5th place rank in Canada in the growth of real GDP per capita, from the 2001 baseline rank of 10th place. The B.C. Progress Board target is to achieve 1st or 2nd place ranking in Canada by 2010. The Provincial Government Strategic Plan is available at http://www.bcbudget.gov.bc.ca/
2001/02 Baseline	2002/03 Target	2002/03 Actual	Variance	Achieved
10th (revised from 6th*)	Top 5	8th	3	No


^*	Revised due to Stats Canada change in methodology

Goal/Objective: Effective debt management

*Performance Measure: Provincial credit rating*
Rationale:	Credit ratings reflect the level of assurance in sustainability of the government's fiscal plan. A strong credit rating reduces the province's cost of borrowing and improves access to domestic and international capital markets. Credit rating agencies base their evaluation on a number of considerations including debt as a percentage of Gross Domestic Product (GDP) and the debt service costs as a percentage of gross revenues. Accordingly, this measure reflects the health of the provincial economy, and the sustainability of government spending and current costs of financing the debt and capital projects.
Measure Status:	Revised measure in Service Plan 2003/04 – 2005/06 The credit rating source has been revised from Standard & Poor's (S&P) to Moody's in Service Plan 2003/04 – 2005/06 because the inter-provincial comparators used by Moody's are more similar in definition to the measures used by the province and the Office of the Auditor General. The results of Moody's analysis are also available earlier which contributes to more timely reporting. It should be noted that the following S&P's rankings for 2002/03 are based on forecasts included in the most recent budgets released by the provinces. These forecasts are utilized by rating agencies because most provincial governments do not release audited financial statements until later in the following fiscal year. While British Columbia releases its Public Accounts in late June, just three months after year end, the comparative data for most other provinces is usually not available for rating agencies to review within the same timeframe. Rankings based on final year end results for all provinces should be available in Fall 2003. The issue of availability of actual results vs budget forecasts also applies to the next two comparative performance measures: Debt to GDP Ratio and Debt Service Costs — Cents per Revenue Dollar.
2001/02 Baseline	2002/03 Target	2002/03 Actual	Variance	Achieved
AA-	AA-	AA-	0	Yes

*Performance Measure: Debt to GDP ratio (Compared to other provinces)*
Rationale:	Maintaining a relatively low taxpayer-supported GDP ratio signifies a healthy balance sheet and manageable debt levels. Rating agencies rely on this balance-sheet measure as one among a number of important credit rating considerations.
Update:	It should be noted that the following Dominion Bond Rating Service's (DBRS) rankings for 2002/03 are based on forecasts included in the most recent budgets released by provinces. These forecasts are utilized by DBRS for the same reasons outlined in the previous measure. Actual rankings for all provinces should be available in Fall 2003. While British Columbia's debt at March 31, 2003 is substantially lower than forecast in the February 18 budget, the overall impact on the comparison with other provinces cannot be determined until the audited financial results from all jurisdictions are analyzed by DBRS.
Measure Status:	Revised measure in Service Plan 2003/04 – 2005/06 On a go-forward basis, the source has been revised from DBRS to Moody's in Service Plan 2003/04 – 2005/06 for greater consistency with the definitions used by the province, the Office of the Auditor General and the other measures associated with this objective.
2001/02 Baseline	2002/03 Target	2002/03 Actual	Variance	Achieved
2nd Lowest	In the lowest 3	2nd Lowest	0	Yes

*Performance Measure: Debt service costs — cents per revenue dollar (Compared to other provinces)*
Rationale:	A relatively low ratio of taxpayer-supported debt service cost to taxpayer-supported revenues or "interest bite" demonstrates fiscal prudence and an affordable debt burden. Rating agencies will rely on this measure as an important credit rating consideration.
Update:	It should be noted that the following Dominion Bond Rating Service's (DBRS) rankings for 2002/03 are based on forecasts included in the most recent budgets released by the provinces. These forecasts are utilized by DBRS for the same reasons outlined in the previous two measures. Rankings based on final yearend results for all provinces should be available in Fall 2003. The province's 2002/03 borrowing costs and debt are substantially lower than forecast in the February 18 budget, which may effect the final comparative ranking. The impact of these changes cannot be determined until the audited financial results from all jurisdictions are reviewed by DBRS.
Measure Status:	Revised measure in Service Plan 2003/04 – 2005/06 On a go-forward basis, the source has been revised from DBRS to Moody's in Service Plan 2003/04 – 2005/06 for greater consistency with the definitions used by the province, the Office of the Auditor General and the other measures associated with this objective.
2001/02 Baseline	2002/03 Target	2002/03 Actual	Variance	Achieved
3rd Lowest	2nd Lowest	3rd Lowest	Missed target by 1 ranking	No

Goal/Objective: Achieve efficiencies through technological advancements to streamline regulatory burden and financial management practices

*Performance Measure: Percentage of company incorporations and registrations filed electronically*
Rationale:	This measure evaluates the ministry's progress in working with stakeholder groups to convert from a paper-based registries system to electronic transactions using the Internet. The benefits from the use of this technology include reduced administrative costs for government, businesses and citizens as well as improved service delivery through real time transactions.
Measure Status:	No change in the measure in Service Plan 2003/04 – 2005/06
2001/02 Baseline	2002/03 Target	2002/03 Actual	Variance	Achieved
60%	75%	77%	Beat target by 2%	Yes

Goal/Objective: Risk-based approach to managing government resources

*Performance Measure: Incremental savings from self-insurance*
Rationale:	The annual incremental savings from the self-insurance initiatives of government is a measure of the success of the enterprise wide risk management (ERM) model adopted by government. By adopting a coordinated approach, the government can realize the difference between the costs of business units each obtaining commercial insurance and the costs to those same units when the government sector is aggregated together. This will allow for the pooling of resources and retention or transfer of risks. The result being improving cost management for the business units and savings for government as a whole.
Measure Status:	Revised measure in Service Plan 2003/04 – 2005/06 Annual calculations of savings from self-insurance are subject to significant fluctuations from year to year. To overcome this volatility the ministry has revised the measure in the current service plan to reflect a five-year rolling average that offers more accurate trend line reporting.
2001/02 Baseline	2002/03 Target	2002/03 Actual	Variance	Achieved
$350 million (cumulative savings to date)	$25 million	$53 million	Beat target by $28 million	Yes