It has been seven months since Finance Minister Gary Collins presented his 2003-04 budget. He is expected to release BC's First Quarter Financial Report on Wednesday, September 10th, providing the unaudited financial results for April-June, 2003. Those numbers will not reflect the disastrous fire season which started the following month, but the report will include a revised financial forecast for the balance of the year. That is where a substantial adjustment will be necessary to reflect the costs, incurred and anticipated, of fighting fires this year.

What is good news for Collins in next week's report is bad news for British Columbians, as we will see on our heating bills this winter. The price of natural gas is up by over 50%. Natural gas royalties were forecast to be $1.289 billion this year, but a note to the estimates says that for every 50 cents per gigajoule that the price goes up, government revenue increases between $110 million and $160 million. For the fiscal year, that price increase is likely to mean over $500 million in additional revenue for government, but don't expect Collins to put all of that in his revised forecast. He is more likely to understate revised revenues.

All eyes should be on Collins' numbers for personal income tax and for the social service (sale) tax. According to Statistics Canada, retail sales are at best flat in BC over April-June, although Collins assumed annual growth of 4.8% for an increase in sales tax revenue of $179 million. More importantly, Collins assumed that personal income tax revenue would increase by 12% this year ($506 million). If he doesn't meet that estimate, it will be further evidence that the tax cuts failed - they do not pay for themselves.