lovince of
lih Columbia
ANNUAL
REPORT
1981
Ministry of
Finance
For the year ended
December 31,1981
Honourable Hugh A. Curtis, Minister
British Columbia Cataloguing in Publication Data
British Columbia. Ministry of Finance.
Annual report. — 1980-
ISSN 0229-0626
1. British Columbia. Ministry of Finance.
HJ13.B72 354.711'062'068
Copies of this document
may be obtained from:
Information Services ffi
Ministry of Finance
F'arliament Buildings
Victoria, British Columbia
V8V 1X4
The Honourable Henry R Bell-Irving,
D.S.O., O.B.E., E.D.,
Lieutenant Governor of the
Province of British Columbia
MAY IT PLEASE YOUR HONOUR:
I have the honour, Sir, to submit the Annual Report
of the Ministry of Finance for the year ended
tfecember 31, 1981.
Hugh A. Curtis
Minister of Finance
The Honourable Hugh A. Curtis
Minister of Finance
Parliament Buildings
Victoria, British Columbia
Sir:
I have the honour to submit for your consideration
the Annual Report of the Ministry of Finance for the
year ended December 31, 1981.
L. I. Bell
Deputy Minister of Finance
IliSTRY OF FINANCE
flERS
lister
HONOURABLE H. A. CURTIS
iuty Minister's Office
L 1. BELL
Deputy Minister
R. A. MESSENT
Executive Coordinator
rmation Services
C. L. TEMPLE
Director
nomics and Policy
D. I EMERSON
Assistant Deputy Minister
A. EASTWOOD
Executive Director, Financial Policy and Analysis
D. M. HYNDMAN
Acting Director, Short Term Planning and
Analysis
J. G. YOUNG
Acting Director, Financial Analysis
R J. ADAMS
Director, Tax and Fiscal Policy
L. A. BLAIN
Director, Economics and Statistics
D. E. ALLEN
Director, Social Policy and Federal-Provincial
Relations
J. BAINBRIDGE
Special Advisor, Social Services
usury Board Staff
K. 0. SADDLEMYER
Deputy Secretary
C. S. HUTCHINGS
Assistant Deputy Secretary, Budget Policy and
Administration
M. H. LEENDERS
Director, Administrative Policy
E. 1 MUNRO
Assistant Deputy Secretary, Services to
Government
D. M. ANHOLT
Assistant Deputy Secretary, Social and Health
Services
1
Revenue
Office of the
Comptroller General
11
D. J. SANDELL
Assistant Deputy Secretary, Education and
Training Services
W. D. MITCHELL
Assistant Deputy Secretary, Justice and
Regulatory Services
I G.HALKETT
Assistant Deputy Secretary, Natural Resource
and Economic Development
W. H. BELL
Senior Advisor, Personnel Resources
K. M. LIGHTBODY
Assistant Deputy Minister
A. B. CARVER
Acting Director, Income Taxation
C. E. HOLDER
Acting Surveyor of Taxes, Real Property Taxati
E. J. TURNER
Executive Director, Consumer Taxation
N. MOGENSEN
Director, Revenue Administration and Collectio
D. R. ALEXANDER
Comptroller General
D. B. MARSON
Deputy Comptroller General
R. L. RUTHERFORD
Executive Director, Financial Policy
Implementation
D. M. HENDERSON
Director, Professional Support
R. C. CORBEIL
Acting Executive Director, Financial Policy I
Development
M. A. PETRIE
Executive Director, Financial Analysis and«
Reporting
J. R. COATES
Administrative Coordinator
FG. HEPBURN
Executive Director, Internal Audit
rsury and
ciinistration
u.hasing Commission
'nincial Capital
"omission
W. E. EVANS
Director, Financial Disbursement Operations
G. L. TOMALTY
Director, Establishment Control
A. C. PICKERING
Director, Central Accounting
A. R. HORNER
Director, Government Payroll and Personnel
H. G. FERGUSON
^Assistant Deputy Minister
R M. O'NEILL (resigned November 30,1981)
Director of Investments
A. D. THOM
Investment Officer, Long Term Investment
R. W. VIPOND
Investment Officer, Short Term Investment
D. G. PEARCE
Acting Director, Cash Management
T E. SUMNER
Acting Director, Central Borrowing
K. E. LITTLER
Director, Securities and Administration
K. PROWSE
Special Assignment
C. C. BARMAN
Acting Controller, Management Services
R W.WILKINSON
Director, Data Processing
G. I BRODIE
Director, Government Agencies
T F CUTHBERT
Director, Personnel and Payroll
A. W. CHARLTON
Chairman
K. PLANT
Administrator
G. L. GILES
Chief Executive Officer
INTRODUCTION
The Annual Report of the Ministry of Financ ai
intended as a review of the ministry's activiW
during the calendar year 1981. It is not intende|l
be a financial statement but rather it is a repor jja
the functions and achievements of the various cm
sions within the ministry.
Quarterly Reports on the finances of the ProviiU
are published separately throughout the fiscal y fill
A detailed look at the Province's finances itfcH
provided in the Budget, the Public Accounts, }\
Estimates, and the Financial and Econoin
Review.
This Annual Report reflects a numberfl
organizational changes that have taken pi;;
within the ministry as a result, in part, of the pJ
sage of the Financial Administration Act in 19,1
There are five divisions in the ministry, e;i|
headed by an Assistant Deputy Minister report;
to the Deputy Minister who in turn reports to i
Minister of Finance.
The five divisions are:
• Economics and Policy
• Treasury Board Staff
• Revenue
• Office of the Comptroller General
• Treasury and Administration
Operating outside the divisional structure but <
porting on administrative matters to the Depn
Minister are:
• Purchasing Commission
• Provincial Capital Commission
Both the Purchasing Commission and the Prov
cial Capital Commission are responsible to |
legislature of British Columbia through the Minis
of Finance.
The Executive Coordinator for the ministry and t
Director of Information Services also report direc
to the Deputy Minister.
aw
UTY MINISTER'S
ESAGE
If the year 1980 can be described as one of examination, then 1981 can quite rightly be looked upon
as one of accomplishment. Reorganization of the
ministry is complete, and a system for measuring
the effectiveness and efficiency of all ministry
branches was instituted. In addition, the long and
complex process of documenting procedures and
policies was initiated. This activity has provided the
basis for launching an active program to increase
efficiency and effectiveness through the examination of existing procedures.
Lengthy negotiations with the federal government
on the Established Programs Financing Act were
concluded. Further important work remains with
respect to the Tax Collection Agreement.
The Financial Administration Act was proclaimed
and implementation of administrative policies and
procedures governing financial operations
throughout government commenced. This task will
take at least three years. A new accounting policy
was developed, which will see a significant improvement in the format of the Public Accounts.
Major reforms were undertaken to automate the
budget process and simplify the Estimates. Further simplification and refinement is required for
Treasury Board directives and the budget process.
A major challenge in the future will be the integration of both the capital and operating budgets.
Revenue Division commenced work on a very
complex, but important task of compiling all fees
and licence charges throughout government. It is
anticipated that this task will take two to three years
to complete. An education program to improve tax
compliance was initiated.
Investment management continued to obtain real
returns significantly above inflation. In addition, improvements to our banking procedures and cash
management reduced costs and increased
revenues.
The Government Agency system continued to increase its level of service despite constraints on
manpower resources. As well as serving the internal requirements of the ministry, the Data Processing Branch continued to keypunch and transmit to
British Columbia Systems Corporation on the request of 18 ministries. The ministry was well served
by its support staff in Personnel and the Controller's Office.
All these tasks and many more required a significant degree of dedication and sacrifice by a highly
skilled and motivated staff.
1
ECONOMICS AND
POLICY DIVISION
Social Policy and
Federal-Provincial
Relations Branch
Economics and
Statistics Branch
As a strategic policy and planning unit, the £.
nomics and Policy Division advised the govs:
ment on fiscal, financial and economic matters iji
provided a framework for the government's eval.
tion of policies and priorities throughout 1981.
Early in the year, the division was reorganizecfl
meet increased government needs for medii.
term fiscal planning, and analyses and forecast! f
financial and economic affairs.
The division's major policy objectives in 1981 we:
• to contribute to the maintenance of a sou
fiscal position for the Province through tp{
sis and advice;
• to recommend timely implementation of &
nomic policies appropriate to emerging!)
tional and international conditions;
• to improve the provincial fiscal position duri
renegotiation of the Federal-Provincial Fis
Arrangements and Established Programs
nanclng Act, 1977;
• to review the provincial tax system with t
aim of ensuring the equitable distribution
tax burden;
• to assist in the development of policy on i
proved financial planning and financial
trols in the Financial Administration Act, a
• to assist in preparation of the 1982 Provinc
Budget Speech and to produce the assp
ated Background Papers.
In 1981, the Social Policy and Federal-Provmc
Relations Branch helped develop and coordinE
British Columbia's position on the renegotiate
the Federal-Provincial Fiscal Arrangements a
Established Programs Financing Act, 1977. Tl
branch prepared the brief presented to the Parli
mentary Task Force on Fiscal Arrangement
June 1981 and carried out a major study of
federal-provincial fiscal programs.
The branch also completed fiscal analyses of
social program and policy proposals made to cal
net during 1981.
The Economics and Statistics Branch provided i
economic context to fiscal planning for tl
Province through periodic medium-term econorr
and fiscal forecasts and through the monitorii
and analysis of the British Columbia and intern
incial Policy and
to lysis Branch
fa and Fiscal
'ccy Branch
tional economies. The branch played a major role
in coordinating the fiscal and economic review of
cabinet submissions, and was responsible for
preparation of the 1981 Financial and Economic
Review. A major initiative of the branch in 1981 was
development of a new computer hardware and
software system for the division. An econometric
model for forecasting major Province revenues was
put in place, as were systems for accessing data
bases on Canadian and foreign economies.
The Financial Policy and Analysis Branch
monitored the fiscal position of the government
during 1981. Through its short-term planning and
analysis section it also provided advice on methods of meeting budgetary objectives. The branch's
financial analysis section analysed the capital investment of the Province and its Crown corporations. The branch also prepared the government's
Quarterly Financial Reports, and played a substantial role in the drafting of the Financial Administration Act.
The Tax and Fiscal Policy Branch was responsible
for the evaluation of all proposals concerning taxation policy, fiscal policy and provincial-municipal
fiscal relations. The branch collaborated with the
Ministry of Education to prepare the 1981 School
Taxation Report—Report of the Committee to Examine the Effects of Rapid Rises in Home Owner
Real Estate Values on School Taxation. The
branch contributed to the federal-provincial fiscal
arrangements negotiations with a review of the
Province's Income Tax Collection Agreement with
the Government of Canada.
The revenue measures contained in the 7982
Provincial Budget were developed by the Tax and
Fiscal Policy Branch which also prepared the biannual fiscal framework, an internal document
used for budget planning purposes.
The efficiency and effectiveness of the Economics
and Policy Division were measured beginning in
May 1981, chiefly according to timeliness and accuracy of the division's various outputs. From May
to December 1981, the division completed 591
assignments of which 6 per cent were recorded as
overdue and .2 per cent as unsatisfactory. Over the
same period, 2 per cent of the major routine outputs for which the division was responsible (e.g.,
economic and fiscal forecasts, financial and eco-
1
nomic reports, fiscal planning documents) vi/i
recorded as unsatisfactory. Comparison wiffll
staff and budget required by Alber
Saskatchewan and Ontario for similar fungll
were also taken into consideration. The resafsfl
the comparison for 1981-82 are shown below;!
COMPARISON OF DIVISION TO FUNCTION J
COUNTERPARTS IN OTHER PROVINCfel
1981-82
Division or Functional Counter
Budget as
of ProaB
Budget
.0216 I
Province
British Columbia..
Saskatchewan
Ontario
Alberta
Number
of
Staff
451
35
127
28
.0546
.0286
.0165
1 Including 27 permanent and 18 auxiliary positions.!
Treasury Board Staff, throughout 1981, continued
in its role of providing support to the Treasury
Board. The principal objectives of the Treasury
Board Staff Division throughout the year have
been:
• to monitor and improve administrative efficiency in government,
• to advise on and implement expenditure restraint as necessary, and
• to provide advice and information to assist
Treasury Board in establishing government
spending priorities.
In addition, Treasury Board Staff was responsible
for:
• coordinating and administering the resource
allocation program throughout government,
• preparation of the annual estimates of expenditure, and
• formulating Treasury Board's decisions affecting government ministries and communicating them in the form of policy directives, procedures and guidelines.
During 1981, Treasury Board Staff provided the
following major services:
• extension of zero-base budgeting principles to
all ministries. During the 1982/83 budget process, the Ministries of Health, Education,
Human Resources, Intergovernmental Relations, and Transportation and Highways
adopted zero-base budgeting principles,
bringing to 19 the number of ministries now
following the zero-base budgeting system.
• preparation of an integrated Budget and Administrative Policy Manual tor use by all ministries. This is the first such government manual
prepared in Canada to combine budget and
administrative policy and procedures.
Treasury Board Staff also advised on the management of government resources, and on government organizational structures in a corporate context under the Financial Administration Act.
The public service hiring freeze and accompanying
restraints on consulting contracts and on staff
travel were implemented in August 1981 by the
Chairman of Treasury Board following preparatory
studies by Treasury Board Staff.
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10
ilget and Administrative
[icy Branch
A Treasury Board directive to all government ministries concerning user fees and licences was issued
in June 1981, prepared by Treasury Board Staff. A
study of the fee and licence structure of the provincial government by the Finance Ministry's Revenue
Administration Branch continues.
The Budget and Administrative Policy Branch of
Treasury Board Staff undertook several projects to
improve the resource allocation process in government during 1981.
These included:
• development of a detailed budget timetable
and introduction of a computerized budget
preparation system used by government ministries in preparation of the 1982/83 Provincial
Budget. This Interactive Estimates System
has produced marked improvement in the
quality and speed of budget preparation and
review.
• creation of a monthly budget monitoring and
reporting process, introduced in 1981, applicable to all ministries, and to be further
developed in 1982.
• development of a new structure for the
Province's estimates of expenditure, with the
aim of improving disclosure to the public and
increasing the ministries' flexibility and accountability. Publication of the 1982/83 Estimates will reflect the revised structure.
• development of a computerized, multi-year
forecasting system to estimate the longer-
term funding requirements of all government
ministries.
• development and introduction of risk management service to safeguard the assets of government. The service received approval from
Treasury Board late in 1981 for implementation in 1982.
Administration of the government-wide Suggestion
Awards Program which began operation January
1, 1981, is carried out by the Budget and Administrative Policy Branch. Government employees at
all levels are invited to submit suggestions which
would streamline government procedures, lower
costs or otherwise increase the efficiency of government operations. Awards take the form of cash
and certificates. In November 1981 the Minister of
11
1
Policy Field Branches
12
Finance announced an increase in the maxim!
award that can be made under the Suggefl
Awards Program from $500 to $10,000, based i
the cost-saving value of a suggestion to the gc
ernment. A total of 339 suggestions were receivi
in 1981 and reviewed by the inter-ministr9§
judication committee. Eight suggestions have i
suited in cash awards, totalling $2,550, while thn
merit certificates were issued under the progra
The five Policy Field Branches of Treasury Boa
Staff provided advice and analysis to Trealsii
Board at the time of budget presentations ar
when requested, on ministry submissions for |
terations or additions to resource allocafjo
throughout the year.
The branches are:
• Services to Government
• Social and Health Services
• Education and Training Services
• Justice and Regulatory Services
• Natural Resources and Economic
Development.
In each branch, analysts from Treasury Board St
are assigned responsibility for individual minim
As well, the Policy Field Branches provided tech
cal advice, and advice on policy interpretation
all ministries on issues related to resource alloc
tion in general and on budget preparation
particular.
Major initiatives of the branches included:H
• development and implementation of thej
phase of a Capital Budgeting Program fort
four major capital spending ministK
Health; Education; Universities, Science a
Communications; and Attorney General
• major independent analyses of governrru
program thrusts and resources requngg
effect government initiatives including a ft
year operational plan for the Ministry of F
ests, and the examination of financing optic
for B.C. Place, North East coal developme
the B.C. Ferry Corporation and the Min3y
Municipal Affairs Revenue-Sharing Fund
study of public schools and post-second;
education for the Ministry of Education n
r
carried out to provide control and flexibility in
managing manpower resources.
• development in 1981 of a business case
methodology for the 1982/83 budget year to
identify the total costs and benefits associated
with specific new systems projects.
The branches also analysed the financial implications of federal-provincial agreements and their
impact on government services, with specific reference to the provisions of the Financial Administration Act. These agreements included the Canada
Assistance Plan involving the provincial Human
Resources Ministry, and the Canada-British Columbia Industrial Development Sub-Agreement'm-
volving the provincial Ministry of Industry and
Small Business Development.
The Policy Field Branches also analysed the financial impact of public sector wage negotiations in cooperation with the Government Employee Relations Bureau.
The efficiency and effectiveness of the division is
measured by adherence to the approved budget
timetable, the general satisfaction of Treasury
Board and the cabinet, and production of the Estimates of Revenue and Expenditure (the Blue
Book) before budget day.
In 1981 Treasury Board Staff was able to meet
these guidelines. During the year 70.3 per cent of
the 1,573 Treasury Board submissions received
from ministries were dealt with within 10 working
days of receipt; 15.7 per cent within 20 working
days, and 15 per cent within 50 working days. By
year end 1,476 submissions had been vetted; 97
remained for consideration and forwarding to
Treasury Board, at that time.
The estimated average cost of processing a Treasury Board submission is $300. This is comparable
with several other Canadian governments:
Processing Cost
per Submission
Federal Government $550
Alberta„ 300
Manitoba 200-250
British Columbia 300
13
REVENUE DIVISION
Consumer
Taxation Branch
14
1\
During 1981, the four branches of the Revent
Division administered the taxation statutes that a I
the responsibility of the Minister of Finance. Tf
statutes include those covering property taxation
rural areas of the province, taxation of consffij
goods, and taxation of personal and corpora)
income.
The specific aims of the Revenue Division durir
the year included:
• collecting taxes in an efficient, effective ar
equitable manner;
• enhancing compliance with taxation statute
• improving audit and inspection performanc
within the branch, and
• improving tax collection and administratic
through development *of more effectk
systems, procedures and organizatic
structures.
It was also the division's goal in 1981 to reduce tf
amount of litigation and the number of public cor
plaints centered on provincial tax levies and
increase compliance with taxation statutes ar
regulations through taxpayer education.
A major step towards these goals was the estal
lishment of the Revenue Administration Branci
part of a general reorganization of the division;
Total revenues collected by the division in 196
were $4,006,749,710, up 25% over 1980 collei
tions of $3,189,851,764. See Table on page 2
The activities of the Consumer Taxation Brant
included the registration of taxpayers and the auc
and
inspection of taxpayers' records under the fc
lowing seven statues:
•
Social Service Tax Act
•
Hotel Room Tax Act
•
Tobacco Tax Act
•
Gasoline Tax Act
•
Gasoline (Coloured) Tax Act
•
Motive Fuel Use Tax Act
•
Horse Racing Tax Act
Revenue collected under these statutes in 1981
rose significantly overthat collected in the previous
I Percentage
1980* 1981 Increase
$1,020,814,637 $1,478,876,918 44.9%
* Revenue collected in 1980 included $774,343 collected under
the Fuel Oil Tax Act which was repealed in March 1980. All heating
fuels were taxed at VzQ per gallon under this Act. Now only heating
fuels used for commercial purposes are taxed under the Social Service Tax Act.
The branch's success in ensuring compliance with
the seven taxation statutes during 1981 was measured by the administrative cost of collections, the
length of time required to process new vendor registrations and to recognize delinquent accounts,
and by the proportion of vendor accounts overdue.
The responsibility for the collection of seriously
delinquent tax revenues under the seven consumer tax statutes shifted in early 1981 to the
newly created Revenue Administration Branch.
The cost of administering the taxing statutes was
held to less than $.41 per $100 collected
throughout 1981, which compares favourably to
costs of collection in other provincial jurisdictions.
The interruption of federal postal service in 1981
interfered with the prompt registration of new vendors and with the early recognition of delinquent
accounts.
The efficiency of the Consumer Taxation Branch in
carrying out its audit function during 1981 was
measured by the amount of revenue raised by each
of the branch's 60 auditors and by the relation of the
audit payroll to the total amount of revenue recovered. The amount raised by each addition is as
follows:
Recovery per Auditor
1980 $219,588
1981 $266,715
Per Cent Increase 21.5%
Audit payroll was to be no more than 12 per cent of
total recoveries resulting from the audit efforts of
the branch during 1981.
Ratio of Audit payroll to audit related
revenue recovery
1978 11 per cent
1979 10.7 per cent
1980 11.6 per cent
1981 10.02 per cent
15
The effectiveness of the Consumer Taxat
Branch in carrying out the audit function duij
1981 was hindered by difficulty in recruiting ai|
staff. Ideally, each large vendor should be audi)
once every 10 years to check for compliance un
the taxation statutes; a total of 2,800 audits she)
be performed each year at current staff levelS]
95 per cent of completed audits should be forjjil
assessed within 10 days of completion. In 1981 >
number of audits completed both in total and i
auditor were the highest ever, as was the totaBJ
of taxes assessed as a result of this effort. S
table on page 18.
A total of 68,052 tax collectors were registered;
the Consumer Taxation Branch at the end of 19
up 5 per cent from the 1980 level of 63,8401
tered collectors. Of the 1981 total, 63,853 »
registered under the Social Service Tax Act u
per cent from 1980.
There are 13 Consumer Tax Field Offic
throughout the province, as well as the one in \
toria. Both auditors and inspectors are locatec
each of these offices. (See map on page 17).
NSUMER TAXATION BRANCH OFFICES
% -Hjl
• Dawson Creek
Prince Rupert •
9 Prince George
\ *:
• Williams Lake
0 Kamloops
• Vernon
Campbell River* Penticton
Vancouver 9 9
Nanaimo* * • Nelson
ChilliwacK^
@ Cranbrook
Victoria 0
17
Real Property
Taxation Branch
CONSUMER TAXATION BRANCH—AUDITS
lncre.8 £
Total audits completed 1981
1978 2,573 °veM98°
1979 2,368
1980 2,721
1981 2,944 8.2%
Average number of audits per auditor
1978 47
1979 47
1980 48.2
1981 49.2 2.1%
Total taxes assessed as a result of audits ]
1978 $11,019,224
1979 11,101,827
1980 12,400,162
1981 15,944,219 28.6%
Taxes assessed per audit
1978 $4,282
1979 4,688
1980 4,557
1981 5,416 18.8%
The Real Property Taxation Branch collected i\
administered taxes and special levies on taxa*
real property lying outside incorporated mun-
palities in British Columbia. In 1981 as in 1980, t;
rural area made up more than 98 per cent oh
land area of the province as well as 20 per centoli
net taxable values and approximately 20 per ol
of its population.
The 1981 rural taxation roll contained 285,000;
accounts, covering net taxable values'
$2,569,000,000 under the Taxation (Rural At)
Act and $3,476,000,000 under the School Act(v.
table page 20).
The branch administers the Taxation (Rural Art
Actthe Land Tax Deferment Act and, in rural are.
the Home Owner Grant Act. The branch also lev;
taxes on rural properties under the follow I
statutes:
18
• School Act
• Municipal Act
• Hospital District Act
• Assessment Authority Act
• Municipal Finance Authority Act
• Local Services Act
• Library Act
• Esquimalt and Nanaimo Railway Belt Tax Act
• University Endowment Lands Administration
Act
• Agriculture Land Development Act
• Grasshopper Control Act
• Mobile Home Tax Act
• Farm Distress Assistance Act
• Highway Scenic Improvement Act
• Riverbank Protection Act
• Weed Control Act
• Islands Trust Act.
The Land Tax Deferment Program enables certain
owners including seniors and some disabled property owners to defer, or delay, payment of taxes on
their homes until the property is either sold or
passed on. The deferred taxes carry a compound
interest of eight per cent per annum.
In 1981, there was a significant increase in the tax
deferrals under this act, resulting from significant
increases in market value assessments of
property.
No. of
Cumulative
Year
Property
Taxes
Full Tax
Deferment
Partial
Tax
Deferment
Total-
Property
Taxes
Agreements
Agreements
Deferred
1974$
460,000
610
1072
$ 388,000
1975
481,000
515
456
755,000
1976
452,000
600
240
1,042,000
1977
447,000
659
168
1,425,000
1978
656,000
885
129
2,027,000
1979
646,000
981
94
2,526,000
1980
792,000
1073
79
3,202,000
1981
2,235,000
1985
64
5,511,000
19
REAL PROPERTY TAXATION BRANCH
Year
Number of
Rural Tax
Accounts
1977 256,000
1978 266,000
1979 272,000
1980 278,000
1981 285,000
Total Rural
Property
Taxes
Collected
(in Millions)
1977 20.7
1978 19.1
1979 21.8
1980 25.4
1981 29.2
Net Taxable
Value,
Taxation
(Rural Area)
Act
(in Millions)
1,587
1,589
1,847
2,175
2,569
Local
NelT^r
Value
School,
(in Millio
2,211
2,mi
2,7011
2,94!
3,47f
Total
School Government cE
Taxes
Collected
(in Millions)
101.0
120.5
133.6
153.1
197.3
Taxes
Collected*
(in Millions)
21.5
24.7
27.1
32.2
38.9
Taxes
Collect
1.5
1.7
1.8
2.0
2.5
*This includes Improvement District, Regional District, HospitattBis
Library District and similar levies.
Home Owner Grants in Rural AreCT
1981
1980
Applications
86,352
80,489
75,412
72,408
.... 69,620
Total
Grants
$33,900,000
33,000,000
29,800,000
23,200,000
21,500,000
Increas
10.3°/
11.1°/
1979
12§°/
1978
10.8°/
1977
11.2°/
The branch's success in carrying out tax collecti
in rural areas was measured by the administrati
cost for each tax account. In 1981, the costw
$3.12 per account, below the target cost figure
$3.24 per account and comparable to the coa
incurred by the municipalities of Surrey aj
Saanich. In administration of the Home Owr
Grant to rural area property owners, the bran
was deemed efficient when the cost for each a
proved application was $1.30 or less. Cost f
approved application in 1981 was held to $1.2
The efficiency measure for the branch's rolel
administering the Land Tax Deferment Progra
was a cost of $11 or less per tax deferment i
count. The branch's servicing cost per accognt
1981 was $10.94.
In each of the branch's three functions—real property tax collection, Home Owner Grant administration and the Land Tax Deferment Program—the
branch's effectiveness was measured by adherence to the annual work cycle, which was
sucessfully met throughout 1981.
The Income Taxation Branch was responsible for
administration of the following statutes in 1981:
• Corporation Capital Tax Act
• Mining Tax Act
• Logging Tax Act
• Insurance Premium Tax Act
• Income Tax Act.
Under the Tax Collection Agreement between the
provincial and federal governments, the federal
government collects personal and corporate income taxes on British Columbia's behalf.
The Income Taxation Branch has statutory responsibility for the British Columbia Income Tax Act and
assists Revenue Canada in the compliance and
informational aspects of the taxing statute.
The branch is also responsible under the provincial
Fire Services Act for collection of tax from insurance companies which sell fire insurance.
As well, during 1981, the Income Taxation Branch
continued the administration of certain provincial
legislation which has been repealed, but for which
tax revenue for the period prior to repeal is still
being collected. These statutes are:
Date of Repeal
January 24, 1977
January 24, 1977
March 11, 1980
Succession Duty Act
Gift Tax Act
Probate Fee Act
British Columbia Payment
to Canada of Federal Income Tax on Behalf of
Natural Gas Producer Act December 31, 1976
A tax roll totalling 15,925 individuals and corporations was maintained by the Income Taxation
Branch, made up as follows:
14,150 Corporation Capital Tax
1,100 Logging Tax
125 Mining Tax
550 Insurance Premium Tax.
21
Three of the branch's 15 audit positions remai j
vacant throughout 1981, as a result of confflj
difficulties in recruiting qualified audit staff.
The branch was responsible for registration of p
ical parties and their signing authorities under
Income Tax Act, and for auditing political dorialj
claimed under this legislation. Seven politicM
ties were registered by the branch in 1981.H
Liberal Party in British Columbia
British Columbia Social Credit Party
New Democratic Party of British ColuU
Progressive Conservative Party of Brill
Columbia
Western Canada Concept
Western National Party
Taxpayers and Voters Party of Britisl
Columbia.
During 1981, the branch collected a to
$149,609,000 of revenue, up only 4 per cent fn
the amount collected in 1980 of $144,250,349. T
marginal increase is accounted for by the four
pealed statutes listed earlier and by factors affe
ing the forestry and mining sectors of the provinc
economy. 1981 revenue was, however, 10.5 [
cent higher than the expected revenue total
$135,400,000.
The branch's success in 1981 in ensuring co
pliance with the taxation statutes for whicHit
responsible was measured by the admini'sllti
cost within the branch, by the proportion of
active tax roll filing tax returns voluntarily, and
the margin of planned revenue within which acti
revenue fell. The compliance cost was held
$.005 per dollar of revenue generated, well witi
the guideline of $.27 per dollar generated. T
Income Taxation Branch was considered effecti
in ensuring compliance if 70 percent or more of f
active tax roll filed tax returns voluntarily, and
actual compliance revenue from those filing volu
tarily came within 10 per cent of what was |
pected. In 1981, 76.3 per cent of the branch's t
roll filed voluntarily, and compliance revenue
$1,133,000 was 14.7 per cent higher than thee
pected $965,000.
The efficiency of the Income Taxation Branch
carrying out its audit function in 1981 wi
measured by the audit cost, intended to be 15 p
tnr
cent or less of total audit recovery. In fact, the
branch's total audit cost throughout the year of
$579,000 was 6.24 per cent of the $9,274,695 total
audit recovery. Difficulty in obtaining audit staff in
1981 caused the branch to fall short of its target of
8,500 audits; 7,964 audits were completed by the
branch's 12 auditors throughout the year. Audit
revenue in 1981 totalled $9,274,695 or 7 per cent
higher than the planned audit revenue figure of
$8,750,000.
Branch costs of $585,000 were .39 per cent of
branch revenue of $149,609,000 for the year, well
within the target of .75 per cent or less. Further,
while the actual branch cost figure was 6.6 per cent
higher than the planned cost figure for 1981 of
$552,000, it was within the 10 per cent target set for
branch effectiveness.
/enue
ninistration
nch
The Revenue Administration Branch was established in 1981 to provide administrative, tax accounting and collection services for the three preceding sections of the Revenue Division. The new
branch assumed general administrative, tax record-keeping and collection functions from the Consumer Tax Branch early in the year; similar functions for the two remaining branches will be
assumed in 1982. The Revenue Administration
Branch recruited staff during the summer and fall of
1981 in preparation for full operation in 1982. The
branch is scheduled to assume revenue-collecting
functions for all assessed and seriously overdue
taxes for the Real Property Taxation Branch in
early 1982, and for the Income Taxation Branch in
the fall of 1982. The new branch provides a higher
profile in the field of tax collection and is expected
to reinforce compliance with the provincial tax statutes. When fully in operation in 1982, the Revenue
Administration Branch will be responsible for receiving more than one million tax returns annually.
Special initiatives taken by the Revenue Administration Branch in 1981 included:
• a study of all fees and licences levied by the
provincial government. More than 1,400 individual fees and licences were listed in an
inventory by the end of 1981. The branch's
involvement in the project will continue in
1982. The aim is re-evaluation of government-
23
imposed fees and licences in terms of i
1981 Treasury Board directive which e*
lished the objective of basic cost recovffll
the provision of many of these serviceM
• planning and development of a collecti
system for all taxation statutes for whidffil
ministry's Revenue Division is responslbl
The system was implemented in 1981 on t
following consumer taxation statutes: I
—Social Service Tax Act
—Hotel Room Tax Act
—Tobacco Tax Act
—Gasoline Tax Act
—Gasoline (Coloured) Tax Act
—Motive Fuel Use Tax Act
—Horse Racing Tax Act.
• development of a collection system for tl
Income Taxation Branch was begun and 5|
continue in 1982.
• a continuing project to design systen
capabilities for provincial income taxation ai
property taxation records was undertake
The Revenue Administration Branch was succes
ful in fulfilling the functions of collections and a
ministration (mostly relating to the Consumer Tax
tion Branch) set for it in 1981. These functions vJ
be expanded to include the areas of provinc
income taxation and real property taxation in 196]
with specific efficiency and effectiveness me
sures set for the branch's operation.
REVENUE BY STATUTE—REVENUE DIVISION
Statute
3dal Service tax Act
lei Room Tax Act
bjcco Tax Act
Jidline Tax Act
Sne (Coloured) Tax Act
* ve Fuel Use Tax Act „,...;.
I(3e Racing Tax Act
I1 Oil Tax Act1
nme Tax Act (Federal)—
^onal Income Tax2
Borate Income Tax2
cging Tax Act
ling Tax Act
ooration Capital Tax Act
urance Premium Tax Act
ii Services Tax Act
'riate Fee Act1
ii Tax Act1
IfSssion Duty Act1
Wmh (Rural'Area) Act
ool Act
©^Services
I^roperty Taxes and Fees I
Calendar 1980
Revenue
$701 pJaPPPl
14,725,936
71,027,089
161,459,747
33,725,154
27,857,140
9,269,589
774,343
1,287,000,000
526,000,000
58,039,393
18,460,981
52,000,000
15,763,926
1,758,943
417,065
10,394
2,336,425
23,100,000
151,300,000
32,000,000
850,000
Total $3,189,851,764
rlepealed.
i Province of British Columbia Estimates.
Calendar 1981
Revenue
$1,037,505,422
22,012,363
95,709,817
216,948,579
67,180,581
35,378,266
4,141,890
1,578,000,000
532,000,000
21,450,000
15,750,000
80,400,000
28,850,000
2,725,000
57,252
6,540
434,000
29,300,000
197,400,000
39,000,000
2,500,000
$4,006,749,710
Percentage
Increase
Over 1980
47.8
49.5
34.8
34.4
99.2
27.0
(55.3)
(100.0)
22.6
1.1
37.0
(14.7)
54.6
83.0
54.9
(86.3)
(37.1)
(81.4)
26.8
30.5
21.9
194.1
25.6
25
OFFICE OF THE
COMPTROLLER
GENERAL
Deputy Comptroller
General
T
The Office of the Comptroller General verified gc
ernment expenditures, and maintained centra!i
counting, reporting and payment systems for tl
government. This division also provided an intfr
audit function for the independent review cm
efficiency and effectiveness of financial coJSi
systems in the government. The Response to t
1980 Report of the Auditor General and the tv
volume Public Accounts 1979-80 were publish
and the three volume Public Accounts 1980-i
were prepared by the Office of the Comptroll
General.
The objectives of this division in 1981 inclffi
• advising Treasury Board on government a
counting and financial administration poM
• enhancing public understanding of tt
Province's financial operations and poMJc
through government financial reports ifflp
ing the Public Accounts;
• increasing the effectiveness of the goven
ment's internal audit function; and
• ensuring timely payments to governmentsu|
pliers and employees.
During 1981, the Deputy Comptroller Generl
completed his duties as a member of the task ford
appointed by the Minister of Finance to review tl
Financial Administration Act. Prior to its passage
the legislature in June 1981, he coordinated tl
activities of various ministry and inter-mirWt
working groups associated with the developmel
of the act.
Under his direction, regulations required by the a
were developed and presented to Treasury Boaj
and subsequently approved by cabinet in Noveij
ber 1981. A comprehensive set of governme
financial administration policies required by the a
was developed and prepared for publication intl
Treasury Board Financial Administration Polk
Manual.
Staff of the Deputy Comptroller General also
• assisted ministries in implementing new pc
icies for financial signing authorities,
• evaluated and incorporated necessary final
cial controls in 17 developing financial
terns throughout government, and
• prepared the government's official response!
the 1980 Report of the Auditor Genera^
26
Throughout 1981, the Deputy Comptroller General
maintained communication with other ministries on
financial policy, systems, controls and other related
matters through regular meetings of the council of
ministry executive financial officers and the council
of ministry senior financial officers.
The Financial Administration Act and the Financial
Administration Policy Manual were developed during the year and approved on schedule. The policy
development operation did not formally exist before
1981 so cost comparisons are not possible.
In 1981, 64 policy implementation projects were
established of which 60 were completed on schedule. This resulted in an effectiveness rate of 93.8
per cent, exceeding the branch's target of 90 per
cent. The cost per policy implementation project
declined from a starting average of $1,530 to
$1,275 at the end of the year. This represented a
16.7 per cent improvement in efficiency.
During the year, the branch addressed itself to 87
outstanding recommendations made by the Auditor General in her 1980 report. At December 31,
1981, 31 of the issues had been satisfactorily resolved and a further 50 had progressed toward a
satisfactory resolution. This resulted in an actual
93.1 per cent effectiveness rate, exceeding the
branch's target of 80 per cent. The cost per response to the recommendations declined from an
opening monthly average of $70 to $66 at year end.
This represented an improvement of 5.7 per cent in
efficiency.
The 1980/81 Public Accounts, which included consolidated financial statements and information under both the old cash basis and the new modified
accrual basis of accounting, were prepared and
transmitted to Treasury Board and the Auditor
General by the September 30 statutory deadline.
Adjusted for inflation, the Public Accounts, which
included additional schedules and financial information not previously published, were produced at
approximately the same cost as the year before.
In 1981, monthly statements were completed on
average by the fifth working day of each month.
Average costs for producing them was the same as
for the previous year.
27
Pay and Personnel
Accounting Branch
The Pay and Personnel Accounting Branch v
responsible for the payment and control of persi
nel costs to government in 1981.
Throughout the year, this branch:
• maintained employee records of more th
60,000 persons employed by the prowc
government in 1981;
• managed the provincial government payn
valued at an average of $80 million moltl
(see chart);
• paid on average 45,000 provincial govei
ment employees per month, and
• processed 80,000 pay-related and tra\
vouchers per month, including, on aveta
15,000 employee travel expense vou«
Major improvements were introduced to redu
processing costs in the handling of 21,000 Ca^a
Savings Bonds, valued at more than $7 rSc
Improvements were also made to the handling
provincial government employee absencajii
sickness cost records the value of which totall<
more than $210 million in 1981.
The Pay and Personnel Accounting Brani
developed a system to permit ministries on-lii
access to personnel management data during tl
year. By the end of 1981, six ministries—Enviro
ment, Health, Attorney General, Transportatk
and Highways, Provincial Secretary, and F
nance—had adopted this system which providi
more timely dissemination of personnel manag
ment information.
The branch also began an extensive review of tl
provincial government payroll systems to mal
them more responsive to the needs of manag
ment and to the requirements of labour agre
ments and government personnel manageme
policies.
In 1981 payroll processing and personnel manag
ment edits were cleared and the systems balanct
by established cut-off dates. Unit processing cos
were not maintained during the year. However, tf
total operating cost for both functions was appro
imately $930,000 in the fiscal year 1980/81, whk
was approximately 15 per cent lower than tl
1979/80 cost of $1.1 million.
28
Government Payroll
as a Proportion of
Total Government
Expenditure
JAN-DEC 1981
1981 Government Employee Payroll
(monthlyaverage S80million)
Smillions
89
88
87
86
85
84
83
8?
81
80
79
78
77
76
75
74
73
7?
71
70
Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec
29
Vouchers Received in 1981
in 000's
65
60
55
50
45 _§j I_,
40.
35.
30
Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec
30
i icial Disbursement
Hffions Branch
Pay and personnel accounting systems integration
and maintenance were effective if existing systems
were planned, specified, implemented and tested,
and met stated system release dates. They were
efficient if operating cost savings, improved functions, and reporting or information requirements
were within the systems release budget.
Four systems releases were planned, specified,
implemented and tested in 1981 by the stated system release dates. In addition to the improvements
that were made in payroll processing and the personnel management systems, policy changes relating to unemployment insurance and Canada
Savings Bond employee deductions resulted in
savings to government of approximately $100,000
in 1981. Systems releases were developed within
budget.
The Financial Disbursement Operations Branch
was responsible for:
• processing all non-personnel disbursements,
and
• issuing all government cheques, as well as
documentation and control of all transactions
processed through the government's central
accounting system, and the pre-audit of all
non-personnel payment vouchers.
In 1981, the branch:
• processed 580,000 payment vouchers valued
at more than $6.5 billion.
• rejected 13,000 incomplete or inaccurate
vouchers valued at $171.1 million. The percentage of vouchers rejected dropped from an
average of 2.3 per cent at the beginning of
1981, to an average of 1.6 per cent by year
end, indicating an improvement in voucher
processing by ministries.
• issued more than three million cheques.
• processed receipts for a total transaction
value of more than $26 billion, including $19.5
billion in investment transactions and interest
earnings.
The branch's pre-audit operation was considered
effective if the average time from receipt of vouchers to the submission for processing was five working days. The operation was efficient if the unit cost
of documents verified was lower than for the previous year.
31
32
Percentage of Vouchers in Error in 1981
%
? =; A
r-tn L
m ^
?.o ^
1.5
1.0
0.5 |
0
Jan Feb Mar Apr May June July Aug Sept Oct
Processing Cost per Voucher in 1981
in $
2.-55
Nov Dec
2.50
9.45
2.40
2.35
2.30
2.25
2.20
2.15
2.10
2.05
2.00
1.95
1.90
1 85
1.80
1 75
1.70 I
1.65 ■
1.60
1 5.=.
Jan Feb Mar Apr May June July Aug Sept Oct
Nov Dec
rnal Audit Branch
i ral Accounting
sen
While the average processing time during 1981 did
not meet the standard, indications for the first quarter of 1982 show an average processing time of five
days. Since unit processing costs were not maintained in 1980, a target of $2.04 per voucher was
established in 1981. At the end of the year, the unit
cost was $1.98 per voucher.
The Internal Audit Branch conducted appraisals
during 1981 of government financial controls and
management systems.
The branch also audited major financial systems
"under development" and audited and certified
more than 1,400 claims, valued at more than $270
million, made by British Columbia under federal-
provincial cost-sharing agreements.
During 1981, the branch conducted throughout
government:
• 35 regular audits,
• 8 special audits, and
• 4 systems development audits.
A major initiative of the branch was the development of internal audit policies and of a five-year
internal audit master plan covering the fiscal years
1982-83 to 1986-87. The plan provides a coordinated and comprehensive approach to the internal audit of government operations. It also ensures that each audit unit is reviewed at least once
every five years.
During 1981, the operations of the Vancouver office of the Internal Audit Branch were consolidated
with those of the Victoria office as an economy
measure.
Generally, audits were completed on time and in
accordance with an established plan. The audit
reports took an average 28 working days to prepare
after completion of the audit. The productive hourly
cost in 1980 was $38.90, while in 1981 the average
cost rose to $41.63. This small increase in cost per
productive hour of $2.73, or 7 per cent, was due to
the significant temporary reduction in staff resulting from the Vancouver office closure in June.
The Central Accounting Branch maintains the general ledger of the Province of British Columbia,
including a central record of revenue, expenditures, assets, liabilities and trusts.
33
Suitors' Fund
Estate Administration..
The branch also maintains the records and ,
proves payments related to funds held in trust
the government. These include funds paid tc
court pending the outcome of a suit, estates whi
there is no next of kin or named trustee, and fur
held on behalf of infants or those unable to ham:
their own affairs.
Trust funds maintained by Cental Accounting gn
from $119.4 million at the beginning of the year,
$161 million at year end. The breakdown follow
January 1 December
1981 1981
($ million)
39.6 59.4
. 79.8 1TJL6
119.4 161.0
Central Accounting verifies all expenditures ps
through Government Agents on behalf of tl
Comptroller General. By means of auditing ai
reconciling, the branch also controls revenue fro
courts, the Government Agents and other relati
bank transfers.
In 1981 Central Accounting set out to improve i
performance in a number of areas. The branc
worked to improve revenue classification and n
porting, and tightened accounts receivable contr
by arranging for a number of ministries to age the
receivables.
By redesigning systems, Central Accounting al;
eliminated or condensed approximately 25 pi
cent of financial management and control repor
for responsibility centre managers. To speed i
report distribution the branch arranged to trgKr
the information electronically to printing centre
around the province.
The branch also made significant progress in er
suring that all collections and expenditures (
monies held in trust by the government were ident
tied, classified and reported.
In 1981, there was, on average, no significantback
log at the month end cut-off in either the gener;
ledger or Government Agent verification operatior
Since 1980 costs were maintained on a differer
basis from those of the subsequent year, a $1 pe
unit transaction benchmark was set for 1981. Th>
average cost of processing documents during th
year was $.95, while the unit cost of verifying docu
ments averaged $.62.
In the trust fund operation, funds were disbursed
within four working days on average in 1981. Since
unit costs per client serviced were not maintained
in the previous year, a target of $1 per client was
established for 1981. The average unit cost for the
year was $.77.
35
Tl
TREASURY AND
ADMINISTRATION
Treasury Branch
36
Treasury and Administration manages the Conm
dated Revenue Fund and trustee funds, whiojl
1981 totalled $8 billion, and provides adminiil
tive and technical services to the Ministfflfo
Finance, other government ministries, Crown coi
porations and the public. There are five branches!
the division:
• Treasury Branch
• Controller's Office
• Personnel and Payroll
• Systems and Data Processing
• Government Agencies
Treasury Branch manages the Province's majc
financial assets and liabilities and is also responsi
ble for non-budgetary financial activities. TR
include banking and cash management, Crowi
corporation capital funding, investment operations
and securities and administration. The branch
responsible as fiscal agent for the managemen
and arrangement of Crown corporation borrow
ings, for the administration and financial aspects c
advances and guaranteed loans, and for the de
velopment of a broad range of government IjBi
cial arrangements.
The Treasury Branch undertook a far-reaching ex
amination of its operations during 1981 am
brought about changes to reflect more effectivi
delivery of service. This was necessitated by
significantly increased demand for banking are
money market activities on the part of the Crowi
corporations, and in recognition of the need fo
more efficient operations generally.
The Banking and Cash Management Section o
the branch performs banking, cash flow forecas
and accounting duties. In 1981 the section con
ducted a cash management study which resultei
in cash savings and an improved cash manage
ment program. The section also designed and be
gan work on a cash management monitorinaffs
tern. All revenue accounts were included in ai
accelerated transfer program which improved uti
lization of provincial funds.
In 1981, banking operations were efficienjpi
effective since all deposits were made on time will
zero-error performance. The section maintajm-i
more than 800 bank accounts and accepted ai
average 3,500 deposits per month from all g(ffin
ment ministries.
r
All reports for the cash flow forecasting operation
were timely and accurate and bank account credit
balances averaged 1.7 per cent during the year.
The Capital Funding Section assisted in accessing
the public capital markets for British Columbia
Hydro and Power Authority bond issues totalling
$1.3 billion. Of these bonds, $250 million were
floated in the Canadian market, $950 million in the
American, and $100 million (payable in U.S. dollars) in the European market. The section helped
arrange the Province's first bond issue in the United
States private placement market on behalf of five
Crown corporations. The issue totalled $53.3
million.
Capital Funding also arranged short-term financing for a number of Crown corporations through
provincial trusteed accounts totalling
$488,500,000 in 1981. The section coordinated
Canada Pension Plan financing for hospitals;
schools; colleges and universities, and other
Crown corporations totalling $340,798,000.
As well, the section coordinated the preparation of
documentation for all borrowing, including prospectus preparation for three public issues and one
private placement.
In 1981, reports and issue documentation for public, short-term and Canada Pension Plan borrowing operations were timely and accurate. The cost
ratio to amount borrowed for this section was 1.7 to
3.8 times lower than for three other provincial
borrowers.
Treasury Branch's Investment Operations Section
is sub-divided into short- and long-term investment
management groups. Short-term investments as
of December 31,1981 were approximately 35 per
cent of total investments, up from 10 per cent at
December 1980.
In 1981, the short-term investment group managed $3 billion, up from $2 billion in 1980, and
consisting of sinking funds, pension funds, consolidated revenue funds and special purpose funds.
These funds were re-invested approximately four
times throughout the year for a total volume of $12
billion invested. Active management of all portfolios increased dramatically in 1981. Not only were
terms varied, but switches were made involving
differences in yield spreads and marketability of
investments. There were 8,200 transactions in the
37
year with an average size per transactidSi
$1,500,000.
Short-term investments were effective if they di
not adversely affect the market and efficient if the
were an average of five basis points above th
market. In 1981, investment operations metbot
these criteria. The group's short-term market pe
formance was 34 basis points (.34 per cent) abov
the market average during the year.
In 1981, the long-term investment group manage
$4.2 billion consisting of sinking funds, pensio
funds and special purpose funds. There were 38
transactions of which the average size wa
$187,000. At December 31, 1981, long-ternfir.
vestments made up approximately 65 per cent c
the total investment pool, down from 90 per cent ii
December 1980. Investments for the B.C. Sefpc
Districts Capital Financing Authority sinking fund!
were realigned to provide a better match to thi
issue due dates. Activity in the Canadian are
American public bond markets was continueaii
1981, in order to maintain liquidity for outstandin;
B.C. debt issues and to meet sinking fund require
ments. Finally, the group executed extenavt
trades in long-term securities where the term tt
maturity of the purchased bond was either reduce*
or remained unchanged. In all cases an increase ir
yield to maturity was obtained.
To be efficient, the long-term investment group hac
to achieve an average yield on purchases of 3 pei
cent above the inflation rate; execute trades with e
shortening of term and a 25 basis points (.2a|ei
cent) improvement in yield; and maintain theyielc
spread between British Columbia Hydro and On
tario Hydro. Efficiency was achieved in 1981 wttna
3.10 per cent real return on purchases, a shorten
ing of term and an average improvement in yiel&ol
37 basis points, and a reduction in the yield splgd
between Ontario Hydro and British Columbia
Hydro of 4 basis points (.04 per cent) over the year.
The Securities and Administration Section en
hanced the existing accounting and inventory system and developed a computer program for debt
servicing of the Capital Financing Authorities^
1981, these debt servicing payments totalled more
than $230 million. Total securities held in safekeeping by the section were in excess of $12.5 billion.
Securities also assumed control of shares and as-
IIBer's Office
sets of companies in voluntary liquidation, which in
1981 totalled approximately $2 million.
During the year the section maintained a 59 per
cent saving over commercial rates for the same
services, and carried out its activities in a timely
and accurate fashion.
In 1981, the Treasury Branch had responsibilities
under the following acts:
Financial Administration Act
Pension (Public Service) Act
Pension (Municipal) Act
Pension (Teachers) Act
Hydro and Power Authority Act
Pension (College) Act
B.C. Railway Act
B.C. Railway Finance Act
Funds Control Act
Special Funds Act
Resource Investment Corporation Act
Hospital District Finance Act
School Districts Capital Financing Act
Municipal Act
Greater Vancouver Regional Water and Sewer
District Act
Educational Institutions Capital Finance Act.
During 1981 the Controller's Office continued to
assist the ministry with advice and information on
the budget process. The office also provided facilities and office services management. Two new
sections were added to the Controller's Office during the year to provide procedures and forms management, and word processing services. The office also coordinated the development of an
efficiency and effectiveness reporting system
across all divisions and branches of the ministry to
ensure that operations continually responded to
measurable objectives. As well, the office administered the Transmission Line (Underground) Act
which provided grants to municipalities and public
utilities for underground installation of power, telephone and other transmission lines. In 1981, five
projects were funded for a total of $362,400.
The Facilities and Office Services Section was responsible for ministry space occupancy. In 1981,
the section arranged for new premises for Revenue
Division's 180 staff members, for 39 members of
Treasury Board Staff, and for the 47 members of
Internal Audit. The section also assisted in relocating one Government Agency office, and upgrading
39
II
three others. In 1981, this section producec*
work on time and within budget. The cost per.
ployee per month was $4.29.
The Procedures and Forms Section began opi.
tion in September 1981. The section providec.
search, editorial and production assistance fo |
ministry policy and procedures manuals. Irj1:|
these included the Financial AdministratiorWt
Manual and Digest, the Budget and Admini§m\
Policy Manual, and the Central Services Polm,
Procedures Manual. The section also managei
forms generated in the ministry, which in n
numbered approximately 500.
This section produced timely and accurate m
uals and forms recommendations in 1981. f
scribed turnaround times were met and anr
savings from forms redesign were document
Redesign proposals made by the section are
pected to save the ministry more than $7O,O0(
1982.
The Office Automation Centre was another sect
which began operation in 1981. It was develop
mid-year to provide the ministry with advara
word processing capability. The centre facilita
routine document file applications and correspi
dence production while allowing clients to avoid
need for overtime and added staff.
In 1981, the Automation Centre met its implems
tation plan targets, achieved less than oneerroi
10 pages 75 per cent of the time, and produc
documents up to five pages long in one day, 75 f
cent of the time. The cost per page was apprc
imately 50 per cent below the $3.50 bencfm*
figure established for the operation.
The Budget and Expenditure Control Secti
provided advice and information on the zero-ba
budgeting process, and coordinated preparation
the ministry's 1982/83 budget estimates. These
tion also accounted for all 1981/82 Ministry of
nance expenditures.
Efficiency and effectiveness measures were put
place to monitor the vouchering and budget!
aspects of the section.
In 1981, the error rate for the section was lessth:
two per cent and the staff cost per voucher w
$4.63 at the end of the year.
Effectiveness in budgeting was measured by adherence to the budget cycle schedule. Efficiency
was achieved if a staff cost of $71 per person per
month was met or bettered. In 1981, the section
met the budget cycle schedule and had a staff cost
of $39.
The Transmission Line (Underground) Act and the
Capital Commission Act were administered by the
Controller's Office in 1981, while the Municipal Aid
Actwas a shared responsibility with the Ministry of
Municipal Affairs.
inel and
Branch
During 1981 the Personnel and Payroll Branch
continued to provide the ministry with organizational analysis, job position analysis, staffing services, labour relations representation and formalized ministry training and development programs. On April 1, as a result of the ministry
reorganization, Personnel became responsible for
the ministry payroll services.
The branch recruited 474 employees for regular
positions and 448 auxiliaries for variable terms in
1981. Vacancies and positions during the year resulted from:
Promotions 136
Resignations 171
New Positions 65
Transfers to other ministries 46
Retirements 20
Other Reasons 36
At December 31 the Ministry of Finance had 1,282
employees of whom 60 per cent were female and
40 per cent male. The number of handicapped
persons employed by the ministry was increased
from 27 to 32. The branch also completed 250
classification and job analysis studies related to the
ministry reorganization and established a training
centre in October. At year end the training centre
was delivering on-going multi-media programs to
ministry employees and had organized two three-
day management training courses and two one-
day supervisory techniques programs. Personnel
and Payroll also resolved 17 grievances without
recourse to arbitration in 1981. An orientation brochure for new employees was distributed and 26
ministry employees received 25-or 35-year service
awards.
41
Tl
Systems and
Data Processing
Branch
In 1981 ministry employee recruitment increai
15.6 per cent for regular positions and 16 per ct
for auxiliary over 1980 figures. Recruitment co
averaged $110 per capita during the year."!
recruitment operation was considered effe<§vf
95 per cent of positions were encumbered witfiiri
days of being advertised. In 1981 Personnel u
Payroll was able to meet this requirement: ']>
training centre provided 84 employees rnVrmt-
tional training in the three months of its existefL
1981.
The Payroll section, with only two fulltirtSe.
ployees, met all payroll deadlines while map;,
ing an error rate of less than one-half of one
cent.
In 1981 Personnel and Payroll had responsSlJ
under the following acts:
• Public Service Act
• Public Service Labour Relations Act 1
• Workers Compensation Act
• Maturity Protection Act
• Human Rights Code
• Ombudsman Act
• Labour Code
• Employment Standards Act
• Financial Administration Act
• Unemployment Insurance Act
• Income Taxation Act
• Public Service Superannuation Act.
The Systems and Data Processing Branch is i
sponsible for coordinating the development of re
computer systems for the ministry as well as tl
operational management of all ministry productii
systems in the financial area. This includes i
sponsibility for system coordination betwei
BCSC and users, data control of all input and oi
put of the system, and remote job entry for
outside ministries, several Crown corporations ai
the Ministry of Finance.
During 1981, developmental and operational a
plications within the Ministry of Finance in#df
the following systems:
General Accounts
Bank Reconciliation
Estimates
42
Revenue Taxation
Corporation Capital Tax
Motor Fuel Use Tax
Government Agents Cash Registers
Real Property Tax Levy
Real Property Tax Accounts Receivable
Public Service Payroll
Miscellaneous Pay
Leave Management
Securities Investment
Securities Authorities Billing
Securities Sinking Fund Analysis
Securities Liabilities
Supplies
Trust Accounts
Corporation Capital Tax Investment Payments
Transmission Line (Underground) Act System
VM/CBS Timesharing Applications and Management Systems
In addition some aspects of the GAIN and Social
Assistance programs were produced for the Ministry of Human Resources.
In 1981 the Systems Management Section of the
branch acted as the intermediary between service
users and B.C. Systems Corporation design and
programming staff. The section monitored hardware and systems costs for new and existing projects thus keeping branch expenditures well within
budget. By using various software packages, Systems Management was able to respond effectively
to an increased demand for ad hoc reports in 1981.
The section also coordinated developmental projects including the automation of Consumer Taxation's accounts receivable system, the enhancement of Real Property Taxation's levy system, the
Securities Authorities billing system and completion of phase one of the Government Agents cash
register project. During the year Systems Management performed a feasibility and functional analysis for a cash management system, installation of
which was on time and within budget. The section
also began a feasibility study for an integrated cash
flow forecasting system. Finally, Systems Management provided the branch director with monthly
expenditure reports for development and production systems, assisted the Purchasing Commission with word processing file management and
gave advice on Administration's IBM 5520 system
in the Automation Centre.
43
<i_
1
The Data Control Section scheduled and prepM
production jobs for presentation to the Cotjnpji
Operations Section. The section managed qu
control, bursting, decollating and distributionoe
printed output. By eliminating the use of punc(
cards in favour of computer terminals and
cedures libraries, the section reduced the §m\
of errors in job submissions by 80 per cent in 1
The Computer Operations Section mainBI
computer interface system with BCSC's rn
frame computer 24 hours a day, five days aw<
This interface system processed 2,000 jobs
month during the year, with 20 million lines of pi
ing per month on average.
The Finance Data Entry Section keyed iiiffisil
lion records per month for virtually all branchia
the ministry, for the B.C. Ferry Corporation, an)
the Ministries of Education and Human Resouis
The Central Services Data Section acted as a i
vice bureau for key entry and work from almon
government ministries and some Crown corps
tions. The section also provided a back-up sei>
to the Finance Data Entry section. An averati
2.5 million records a month were keyed in for
• B.C. Buildings Corporation
• B.C. Systems Corporation
• Liquor Distribution Branch
• Ministry of Agriculture and Food
• Ministry of Attorney General
• Ministry of Consumer and Corporate Ad
• Ministry of Economic Development™
• Ministry of Education
• Ministry of Energy, Mines and Petroli
Resources
• Ministry of Environment
• Ministry of Forests
• Ministry of Health
• Ministry of Human Resources
• Ministry of Labour
• Ministry of Lands, Parks and Housing
• Ministry of Municipal Affairs
• Ministry of Transportation and Highway;
• Ministry of the Provincial Secretary and j
ernment Services
The Administration Section performed a number of
duties in 1981. The section ensured that TBS 100
forms were kept up to date; processed invoices and
cheque vouchers; handled staff requisitions; maintained the branch policy and procedure manuals,
and processed mail for the entire branch.
The data entry function of the branch was considered effective if it met predetermined work schedules, which it did in 1981. It was also efficient since
the 1981 cost per thousand strokes per capita was
less than the 1980 average of $.00081.
The branch's production operations were considered effective if more lines were printed in-house
than for the previous year. In 1981, the branch was
able to meet this target. Lines printed in-house
amounted to 87.2 per cent of total lines, an increase of 7.2 per cent from 1980.
Production operations were efficient when the cost
per 1,000 lines printed in-house per capita was
less than that for the previous year and lower than
the cost to print at BCSC (after in-house operation
and equipment costs are deducted). In 1981, the
branch was able to achieve both these targets with
an in-house cost of $.00039.
inent
is
The Government Agencies Branch provides a
broad range of government services to citizens
throughout British Columbia. Statutory functions
performed by the branch include those of water
recorder; provincial collector; gold commissioner;
marriage commissioner; registrar of births, deaths
and marriages; official administrator; registrar of
voters, and issuer of Autoplan Insurance and motor
vehicle licences. During 1981, the Government
Agents collected $281,000,000 in revenue for the
Province, and accepted payment of certain accounts, such as provincial medical insurance premiums. In 1981, the branch had a total staff of 396
with offices in 62 British Columbia communities
plus the Victoria headquarters.
The organization of the branch was revamped during the year with the creation of a deputy directorship and eight regional directorships. All agencies
in the province report to one of the eight regional
Government Agents who in turn report to the director in Victoria.
45
GOVERNMENT AGENCIES
Chetwynd
Mackenzie •
Fort St. John
® Dawson Creek
■fJ'-Eiince Rupert (5)
Queen Charlotte City
t #Smitl
Terrace # •
^LaaaaaM
Bella Coola •
• Quesnel • Valemoun
• Williams Lake
100 Mile House
• Clinton
*«u „aa __^J • Golden
Ashcrott m
Ullooet * ® Kamloops • Revelstoke
• Salmon Arrr
|
Regional Headquarters
Port rffirdy* , lnvtrm,
Merritt ®Vernon . Nakusp
Campbell River. Powell River • #Kelowna ftBlo |r>
Courtenay. Sechelt. Squamish . ^ ,
PoAerni. Nanaimo.Vancouver . *C ,,
m
v^c
46
Office operations were improved during the year
with the introduction of automated accounting system cash registers to 24 Government Agencies.
Targeted completion of the automation plan is set
for December 1982. Agency offices at Stewart,
Atlin and Fort Nelson were upgraded, with renovations planned for a number of other agency offices
over the next few years.
One new agency office was opened in May 1981 at
Cassiar. Another, at lljjj.ooet, moved to new quarters in December. A new agency logo, and standardized decor, which will be adapted to all future
agency renovations, were introduced in the Lillooet
office.
As the representatives of all government ministries
in the field, agency staff members continued to
provide a broad range of services to the public in
1981. The staff also acted as government appointed observers at 471 strike votes throughout
the province and coordinated the movement of mail
for all ministries during the federal post office
labour dispute. As well, Government Agencies
staff assisted the Ministry of Intergovernmental Relations in coordinating travel arrangements and
providing transportation for three cabinet tours.
General revenue transactions were considered
effective if transaction volume increased from the
previous year and if there was an error factor of 2.5
per cent or less. This operation was efficient if staff
costs were $3.17 per transaction or less. In 1981,
the Government Agencies Branch met these criteria. The agencies processed 1,822,500 revenue
generating transactions during the year, a 6.7 per
cent increase over the 1,708,571 processed in
1980. Due principally to reduced forest revenues
the dollar value of these transactions fell 45.3 per
cent in 1981 from the previous year.
Autoplan transactions were considered effective if
transaction volume increased over the previous
year and if the error factor was 4 per cent or less. In
1981, the agencies processed 427,500 ICBC
transactions for a total value of $44,460,000. The
number of transactions increased 6.1 per cent in
1981.
The production of cheque vouchers and local
cheques was effective if an error-free rate of 98 per
cent was maintained, and efficient if staff costs per
47
1
local cheque produced were $5.75 or less.JM
the branch met these criteria.
Non-revenue customer transactions were em\
if individuals were served within 15 minuteaSI
cent of the time. In 1981, Government Ager
met this requirement. They handled 520,000 tr
actions of this type which was a 10.6 per
increase over the 470,000 of the year before.
The Government Agencies Branch had ad
istrative responsibility for the BusinessW®
Act. However, in providing the diverse services
are its responsibility, the Government Agen
also administered sections of the acts of all t
ministries.
MATION
Ies
During 1981, the Information Services Branch
provided information to the public and the news
media concerning the Ministry of Finance and the
financial and economic affairs of the government.
The branch also prepared and distributed 68 news
releases.
Information Services was responsible for coordinating responses to questions posed to the Minister of Finance by members of the legislative
assembly.
The branch prepared, produced and distributed all
major Ministry of Finance'publications as well as
editing and producing several ministry manuals.
At the request of the Deputy Minister and Assistant
Deputy Ministers the branch designed, prepared
and produced the Real Property Tax brochure, the
Purchasing Commission Audio Visual brochure
and an Orientation Package for new employees.
During 1981 the branch produced and distributed
six editions of the ministry newsletter, The Treasury. Management News, a newsletter aimed at all
managers in the government was introduced by
Information Services in 1981 and two issues were
published and distributed by the branch.
The efficiency and effectiveness of the branch was
measured in terms of timeliness and accuracy. This
means that publications and news releases prepared by Information Services had to be accurate
both in content and style and had to meet the
deadlines set by the Minister of Finance. During
1981 these requirements were met in the case of all
major publications and news releases.
There were 648 enquiries answered by Information
Services in 1981. The efficiency and effectiveness
measures of the branch stated that these queries
be responded to within four hours. With few exceptions, Information Services was able to supply accurate information within the deadline.
49
u_
1
EXECUTIVE
COORDINATOR
The Executive Coordinator maintained liaison
the Ministry of Attorney General for pro|§|
legal services to the Finance Ministry thrclt
1981. Responsibility for the preparation of H
amended legislation put forward by the Fin;
Ministry rested with the Executive CootHM
who also undertook special projects at the®
of the Deputy Minister. In 1981, these incJB
establishment and coordination of a timemol
the 1982 Provincial Budget, and the estaiHB
of a systems review committee to coorqB
existing and proposed data processing sysl
within the ministry. This committee was chaire
the Executive Coordinator.
50
IASING
SSION
The Purchasing Commission is an agency of the
legislature attached to the Ministry of Finance. It
purchases and disposes of supplies for government, maintains stock control and operates supply
depots and warehouses.
The total value of purchase orders placed in 1981
was $322 million, a 29 per cent increase from $250
million in 1980. This increase was partly due to
expanding programs and service in government,
and partly due to rising prices of the goods purchased by the commission. The number of purchase orders placed in 1981 increased by only 11
per cent, from 52,354 to 55,483, largely due to
continued efforts to consolidate orders.
The downturn in the Canadian economy and subsequent initiative of restraint imposed by government caused the commission to focus its policy
objectives and processes on maximizing the
provincial government's purchasing power. To this
end several studies and projects were undertaken
in 1981:
• a lease management study, critically examining leasing practices throughout government
and recommending future policy in this area,
• a bulk purchasing study directed at consolidating government purchase requirements
wherever possible, and
• preparation of product standardization specifications for office furnishings and government
vehicles.
In keeping with new financial control requirements,
the following internal projects were undertaken in
1981:
• preparation of a new commitment accounting
system,
• application of a new budget preparation system involving all commission supervisors, and
• revision of the policy and procedures manual
of the Purchasing Commission.
The commission also made progress in a number
of other areas during the year. Its warehouse operation moved to new premises at 3285 Oak Street,
Victoria, in March, allowing storage of more than
700 product lines. During 1981 the warehouse operation processed government supplies valued at
more than $1.4 million.
51
u_
1
The audio visual loan and repair service filled
equipment loan requests for government minisl
in 1981. The system has effected consioS
savings—more than $40,000 in 1981—oven
mates for rental of comparable equipment. Rep
to more than 215 units of audio visual equipn
were also carried out during the year, sa\
$18,850 in repair charges at equivalent out
costs.
The commission's surplus disposal service i
cated furniture and equipment no longer nee
by a ministry, to meet the requirements of o
government ministries. In 1981, more than 2,
surplus items of furniture and equipment were r
cated through this service.
When there is no further demand within govl
ment for surplus items, they are disposed ol
public sales, conducted according to the requ
ments of the Purchasing Commission Act. Sail
surplus equipment in 1981 totailed $3,981,9221
this, $1,376,137 was credited to individual gov!
ment ministries, and $1,410,884 was returtiej
Crown corporations. A further $19,518 was c
ited to Social Service Tax as a result of sur|
sales. The remaining proceeds of $1,175,385\|
deposited to the government's Consolidated R\
nue Fund.
A supply of basic office furniture is maintajnei
the Purchasing Commission for short-term loar
2 to 12 months to government ministries. In 1
this service saved $153,776 over the eOTi
cost of outside rentals.
The purchasing operation of the commissMti
efficient when the processing cost per pup
order was $33.75 or less. It was effective Whet
per cent of purchase orders were placed withii
days of receipt.
The business machine operation was effic
when cost per hour for servicing did not exc
$24.00. It was effective when 90 per cent of re
calls were responded to within 1.5 daysM
In 1981, the commission met all of the above
gets in more than 90 per cent of the cases in wl
a full staff complement was available.
Ey of finance
NATIONS
British Columbia Budget, March 1981
Background Papers to the 1981 Budget
Financial and Economic Review
Interim Statements for the Ten Months Ended
January 31, 1981
Estimates of Revenue and Expenditure, Fiscal
Year Ending March 31, 1982
Public Accounts 1979-80 (Vol. 1 and 2)
Quarterly Financial Reports, Fiscal Year 1981-82
Ministry of Finance Annual Report 1980
Thirty-eighth Annual Report of the Purchasing
Commission, January 1 to December 31, 1980
Response to the 1980 Report of the Auditor
General
Report of the Task Force on the Financial Administration Act
Real Property Taxation in Rural Areas of British
Columbia
Financial Administration Policy Manual and Digest
Budget and Administrative Policy Manual
53
legislation
administered by
the ministry of
finance
Assessment Act
Assessment Authority Act
Auditor General Act
Bonding Act
British Columbia Electric Company LimiWi
Acquisition Act
British Columbia Railway Finance Act
Business Licence Act
Capital Commission Act
Corporation Capital Tax Act
Deficit Repayment Act
Educational Institution Capital Finance Act
Esquimalt & Nanaimo Railway Belt Tax Act
Financial Administration Act
Financial Information Act
Funds Control Act
Gasoline (Coloured) Tax Act
Gasoline Tax Act
Horse Racing Tax Act
Hospital District Finance Act
Hotel Room Tax Act
Income Tax Act
Inflation Control Act
Inscribed Stock Act
Insurance Premium Tax Act
Land Tax Deferment Act
Law Stamp Act
Loan Authorization Cancellation Act
Logging Tax Act
Mining Tax Act
Motive Fuel Use Tax Act
Municipal Aid Act
Pacific North Coast Native Cooperative Act
Petroleum Sales Act
Power Development Act
Probate Fee Act
Public Service Bonding Act
Purchasing Commission Act
Social Service Tax Act
Special Funds Act, 1980
Supply Act—annual
System Act
Taxation (Rural Area) Act
Tobacco Tax Act
Toll Removal Act, 1964
Transmission Line (Underground) Act
Unclaimed Money Act
54
m
i
55
BC Sessional Papers
ANNUAL REPORT 1981 Ministry of Finance For the year ended December 31, 1981 British Columbia. Legislative Assembly 1983
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