Amid record deficit, B.C. doesn’t expect to balance budget for years
Posted April 20, 2021 2:01 pm.
Last Updated April 20, 2021 7:17 pm.
VANCOUVER (NEWS 1130) – B.C.’s projected deficit for the 2020/21 fiscal year may be lower than was initially forecast, but with another record deficit expected in the year to come, we’re finding out it could take seven to nine years to get back in the black.
The projected deficit for the coming 2021/22 fiscal year is $9.7 billion. If that is indeed what we hit, it will be the biggest deficit in B.C.’s history.
But Finance Minister Selina Robinson says we need to incur some debt now to help B.C.’s economy recover.
“Debt is expected to increase to finance the operating and capital investment needs of the province,” Robinson said Tuesday. “Taxpayer-supported debt at the end of the three-year fiscal plan in 2023/24 is forecast to be $92.7 billion.”
BC's budget – first in the pandemic, and with @bcndp majority coming with what could be the biggest deficit yet – estimated at $9.7B.
There is a few billion in contingency too though for what the pandemic could throw at us.#bcpoli #covid19 @news1130https://t.co/wSqWSrCXKB— LizaYuzda (@LizaYuzda) April 20, 2021
She notes B.C.’s debt burden “remains manageable for a province our size, with taxpayer-debt-to-GDP-ratio remaining below 30 per cent across the fiscal plan.”
“This compares favourably with other jurisdictions that are also having to deal with the impacts of the pandemic,” Robinson said at the unveiling of her first budget as finance minister, and B.C.’s first since the COVID-19 pandemic took hold.
With no word on when this health crisis will end, uncertainty remains. Robinson says this budget builds in contingencies if we face any hiccups down the line.
BALANCING THE BUDGET IN SEVEN TO NINE YEARS
The B.C. NDP forecasts that the province’s deficit will drop from $9.7 billion in 2021/22 to $4.3 billion in 2023/24.
Estimates based off other provinces’ budgets suggest B.C. won’t return to a balanced budget before 2028/29 to 2030/31.
Read more: B.C. projects record deficit as budget builds on pandemic promises for recovery
“While the analysis incorporates economic growth scenarios and other assumptions, the Province will be working over the coming months to finalize a specific timeline to return to balance,” Budget 2021 notes, adding decisions to hit the timeline and how to get there will be guided by indicators based on economic, community, and business health.
The province says it will provide a specific timeline, as well as its approach and plan, in Budget 2022 “when there will be greater certainty about the path and pace of economic recovery.”
THE DIFFERENCE A PANDEMIC CAN MAKE
In 2020, the province’s proposed budget suggested there would be surpluses in the three years ahead. The province had forecast a “modest surplus” of more than $200 million for the 2019/2020 fiscal year.
However, then came COVID-19. The coronavirus shuttered businesses, forced people to self-isolate, and put many out of work. The province began emergency spending, as did other jurisdictions, to help British Columbians stay afloat.
As a result, the COVID-19 pandemic turned the projected surplus into a deficit of $321 million for 2019-20.
Read the full document:
2021 BC Budget and Fiscal Plan
