Minister of Finance Hon. Kevin Flacon has projected that the province may suffer a more than $200-million hit to revenues this year as a result of decreasing natural gas prices.

The government had originally forecasted $2.52 per average unit price for 2012-13 for natural gas based on industry estimates. The unit price for natural gas is currently about $1 below that original estimate.

At the same time, however, Minister Falcon stated that he believed that the province would still hit its financial targets.

Minister Falcon projected that economic growth and price increases in other commodities could offset potential natural gas losses. Further, he cited significant cushions in the budget, such as underestimating the province's estimated GDP growth and including a $200-million forecast allowance, could level out potential revenue losses. The Minister also indicated that based on recent estimates, the province could potentially stand to gain as much as $500 million more than expected in regard to the GDP forecast.

Finance Minister Jim Flaherty has urged provinces to remain focused on eliminating deficits. Flaherty held a conference call with his provincial and territorial counterparts last Wednesday to discuss last month's G20 summit in Mexico on the European economic situation.

Despite provincial and federal focus on controlling expenditures and reducing deficits, Minister Flaherty maintained that the economy is still fragile and vulnerable to shock, and warned that the European crisis will impact Canada if not dealt with effectively.

BC Finance Minister Hon. Kevin Falcon responded to Minister Flaherty's news by saying that it re-confirms the BC government's position that governments should be implementing strict austerity measures rather than spending and borrowing.

BC is ranked second in Canada for job gains since June 2011. Over the last year, BC has added 53,000 jobs and was ranked below only Alberta, which added 55,400 jobs.

Currently, BC's unemployment rate is 6.6 per cent, below the national average of 7.2 per cent.

The strongest gains in jobs have been seen in manufacturing. Other areas, however, such as business; building and other support services; health care and social assistance; and educa-tional services have also seen growth.

Also significant have been the gains made in youth employment, as the unemployment rate for the 15-24 age category has decreased by 2.3 per cent since May.

This weekly report produced for the BC Chamber of Commerce by Fleishman-Hillard.  While every effort has been made to ensure the accuracy of the information included in this publication as of the date of issue, events and government policies are subject to frequent change.  Therefore, the BC Chamber of Commerce and Fleishman-Hillard cannot assume any responsibility for actions taken solely or principally on the basis on the information contained herein.