B.C. deficit on track to be half of Budget 2021 estimate

Editor’s note: A previous version of this article incorrectly stated the NDP government plans to return to a balanced budget in 2022.

This article has been corrected to state that the government says it will lay out a plan to return to a balanced budget.

VANCOUVER (NEWS 1130) – Despite projecting a record $9.7 billion deficit in its 2021 budget, B.C. is on track to see a figure that’s actually closer to half that sum.

The province is now looking at a deficit of about $4.8 billion. The substantially lower figure comes after increased tax revenues — both personal and corporate — and recovery in many sectors.

According to the B.C. government, the province’ first quarterly report saw $6.2 billion in provincial revenue. That includes $360 million in property transfer tax, as well as an influx in federal pandemic support dollars.

BC looking at a substantially lower deficit than forecast in this year's budget.
4.8 b down from projected 9.6.
Inreased tax revenue & recovery in many sectors helped. ($360 mil in property transfer tax).
Lack of intl travel still v hard on hospitality#bcpoli #covid19 @NEWS1130 pic.twitter.com/blNFqYoRaE

— LizaYuzda (@LizaYuzda) September 13, 2021

This is not to say certain industries were not deeply affected by the COVID-19 pandemic. The latest quarterly budget shows what we already knew — a lack of international tourism was extremely hard on the hospitality sector.

“International travel to B.C. was down 94.7 per cent in June compared to pre-pandemic levels in February of 2020. And despite some offset from regional travellers, B.C.’s tourism industry remains, generally, weak,” Finance Minister Selina Robinson said Monday.

Robinson says because of COVID-19, the situation remains very uncertain, so this could all change. While many sectors are moving quickly to pre-pandemic operations, she notes this isn’t the case across the board.

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Read more: 

• B.C. projects record deficit as budget builds on pandemic promises for recovery

• Amid record deficit, B.C. doesn’t expect to balance budget for years

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“There does continue to be a high degree of uncertainty regarding the evolution of the pandemic and the path to economic recovery, which contributes to the potential volatility of the future fiscal outlook,” she said Monday.

“Since Budget 2021 was introduced five months ago, we’ve seen significant shifts in projections for B.C., Canada and around the world as the pandemic evolves, and we know we will see more changes as we move through recovery,” Robinson added.

BC Budget 2021 - First Quarterly - September 2021

Changes to revenue were also partially offset by higher expenses, mainly because of this year’s wildfires and additional spending on services.

In Budget 2021, the BC NDP set aside $3.25 billion for pandemic and recovery contingencies. That was on top of last year’s spending of more than $10 billion.

When the budget was presented in April, the NDP touted it as one that would build on previous spending. It was a direct response to the pandemic that forced many out of work, shut down businesses, and put British Columbians in uncertain times.

The NDP government says it will also lay out a plan to return to a balanced budget.