B.C.’s projected deficit soars to $320M due to COVID-19 pandemic

VICTORIA (NEWS 1130) – The province is looking at a $320-million deficit instead of the $200-million surplus forecast just six months ago, according to the latest financials from the B.C. government.

The COVID-19 pandemic has forced the province into millions of dollars worth of emergency spending to help British Columbians weather the health crisis, all while revenue from taxation, Crown corporations, and natural resources has been down.

RELATED: B.C. expecting $12.5B deficit due to coronavirus

Finance Minister Carole James says COVID-19 has ravaged economies across the world, and B.C. is not immune to those impacts.

“The pandemic led to lower tax revenues, a bigger loss at ICBC in the fourth quarter, and unexpected government spending and health authority costs in response to COVID-19. Because of this, fiscal 19-20 ended in a deficit.”

The province says the COVID-19 pandemic is hitting the already-struggling ICBC, with the corporation seeing a nearly $300-million hit on investments.

Finance Min @carolejames says the pandemic has ravaged budgets and BC is no different
lower tax revenues
bigger loss at @icbc
unexpected $ response to COVID.
But she says BC is in good position to recover while being responsive to prov's needs.#bcpoli #covid19 @NEWS1130

— LizaYuzda (@LizaYuzda) August 31, 2020

The upside, however, is that B.C.’s solid financial rating remains stable. B.C. continues to retain one of Canada’s only triple-A ratings.

“There’s no question that it will be a challenging year and … a few challenging years ahead when it comes to the finances,” James says.

“We’re going to have deficits, no question, just as every other jurisdiction is going to. We need to spend every dollar wisely. We need to be fiscally responsible and we will do that with every dollar that we spend but we will also ensure those supports are in place for the people of British Columbia.”

Will this fiscal update and what is down the road shift what is planned for the 1.5billion recovery plan.@carolejames says no. Not at this point.
Plan out in next few weeks.#bcpoli #covid19 @NEWS1130

— LizaYuzda (@LizaYuzda) August 31, 2020

However, James says B.C. went into the pandemic strong noting it retains high credit ratings. She says the focus remains on getting and keeping people on their feet.

“The important message in all of this is that the government has your back.”

James says the plan for the $1.5 billion recovery fund will be laid out in the next few weeks.

The Liberal Party says the deficit is worrying for the future of British Columbia’s economy, with no recovery plan in sight.

“The NDP government’s response to COVID-19 started mid-March, 92 per cent of the way through the fiscal year. In the third quarter update, the finance minister promised a $203 million surplus. So to blame the $524-million swing to a $321-million deficit on the pandemic is opportunistic,” says Stephanie Cadieux, BC Liberal finance co-critic.

“Today’s public accounts showed that revenues were slowing well before the pandemic. This is entirely due to the NDP’s lack of economic vision and continued reliance on increasing taxes to fulfill their plans.”

Cadieux added Premier John Horgan and the NDP continue to avoid proposing an economic recovery plan.

“At a time when people deserve leadership and a plan to get our economy back on track, all they’e getting from the NDP government, which endangered our economy before this pandemic and depleted the billions in surplus left by the BC Liberal government, are delays and inaction,” she said.

“Alberta, Ontario, and Quebec have all announced economic recovery plans while British Columbia is the largest province in the country without one.”