B.C. Cuts Surplus Forecast

British Columbia's finance minister says the province is cutting its 2017-18 budget surplus forecast to C$190 million, due to tax adjustments and as the cost of fighting its worst-ever wildfire season

The government had estimated a budget surplus of $246 million in September.

Provincial revenue is forecast to decline due to weaker 2016 personal and corporate income tax returns, and lower revenues at the province's auto insurance body, ICBC, Carole James told reporters at the release of British Columbia's second quarter fiscal update.

Firefighting costs during the worst wildfire season on record rose by $152 million in the quarter, which runs from July to September. The expected full year cost is $658 million.

Bright spots in the report included job growth, which at 3.6% year-to-date is the fastest among Canada's provinces. Unemployment, at 5.3%, is the lowest in the country.

British Columbia's economy is driven by the real estate, rentals and leasing sector, followed by wholesale retail and trade.

But the province is suffering from a housing affordability crisis, due to two of Canada's most expensive housing markets in Metro Vancouver and Victoria.

James told reporters that the province is working on a comprehensive housing strategy, including tax options to address affordability and speculation in real estate, and a review of the foreign buyer tax, to be unveiled as part of the February budget.

The New Democrat government, which took office in July with the backing of the Green Party, has taken a spending approach that directly contrasts the previous Liberal government's policy of running large surpluses.

The Liberals had forecast a surplus of $2.8 billion for the year in June, driven by stronger-than-expected economic growth. The newly elected government of Premier John Horgan said in September it would use much of that surplus to fund new housing measures and to halve medical service premiums.