B.C. Finance Minister Carole James updates B.C.’s employment situation under COVID-19 restrictions, B.C. legislature, July 10, 2020. (B.C. government)

B.C. deficit forecast $12.8 billion after first three months of COVID-19

Taxes, resource revenues fell less than expected in pandemic

The impact of COVID-19 on the B.C. government’s finances has been as devastating as expected, but there have been signs of a stronger recovery in employment, real estate and retail sales.

Finance Minister Carole James released the province’s first quarter financial report Thursday (Sept. 10), projecting a $12.8 billion deficit for the fiscal year that ends in March 2021. That’s similar to the economic scenario released in July, based on the actual results for April, May and June.

The forecast went as high as $13.5 billion after the B.C. government authorized an additional $1 billion in borrowing to match new federal funds to B.C. and other provinces for transit, municipalities and other supports in the pandemic. The latest forecast includes a $1 billion contingency fund to reflect that, as the B.C. and federal governments finalize how the latest relief fund is allocated.

“Since the province’s July fiscal and economic scenario, we have seen stronger than expected consumer spending, housing activity and employment gains,” James said.

Since July, the province has seen better than expected employment gains, which slowed in the latest Statistics Canada report. B.C. Business Council chief economist Ken Peacock warned in his latest analysis that the job gains for August were less than June and July, indicating the “low-hanging fruit in terms of rehiring has been accomplished.”

RELATED: New B.C. jobs ‘won’t be enough’ when CERB ends

Much of B.C.’s unexpected revenue has come from property tax and property transfer tax revenues, real estate sales volumes recovering quickly and housing prices holding firm and rebounding by July.

James noted that B.C.’s economy depends on many factors outside its control, such as a potential second wave of COVID-19. That has prompted the province to boost health care spending by $1.6 billion for the current year, to add thousands of staff for senior care and double the capacity for COVID-19 testing and contact tracing.

RELATED: B.C. to expand COVID-19 testing, hospital capacity

Another big factor is the international economy, where B.C. is doing better than some other jurisdictions.

“In the April to June period, the Canadian economy saw the largest contraction on record,” James said. “Our neighbour to the east, Alberta, is forecasting a $24 billion deficit for this year. And the U.S. economy and the Eurozone saw their largest economic declines on record in this April to June period. Economic data suggest that the global economy could face its largest contraction ever.”


@tomfletcherbc
tfletcher@blackpress.ca

Like us on Facebook and follow us on Twitter.

BC legislatureCoronavirus

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Protesters in Parksville demand change to current B.C. forest practices

Approximately 50 people march along Island Highway

Qualicum Beach roundabout project would cost nearly $2M

Town to apply for funds to cover $1.79M of the total

Town of Qualicum Beach defers discussions with preservation society regarding wetlands

CAO says registered covenant will protect land in perpetuity

Qualicum Beach seek funds for $4.5M community field project

Turf surface would allow for new sporting activities

Parksville homeowner must clean up property or face penalties

If deadline not met, city crews will do the job and a bill will be sent out

3 new deaths due to COVID-19 in B.C., 139 new cases

B.C. confirms 40 ‘historic cases,’ as well

Emaciated grizzly found dead on central B.C. coast as low salmon count sparks concern

Grizzly was found on Gwa’sala-‘Nakwaxda’xw territory in Smith Inlet, 60K north of Port Hardy

VIDEO: B.C. to launch mouth-rinse COVID-19 test for kids

Test involves swishing and gargling saline in mouth and no deep-nasal swab

Young Canadians have curtailed vaping during pandemic, survey finds

The survey funded by Heart & Stroke also found the decrease in vaping frequency is most notable in British Columbia and Ontario

B.C. teachers file Labour Relations Board application over COVID-19 classroom concerns

The application comes as B.C.’s second week of the new school year comes to a close

CHARTS: Beyond Metro Vancouver, COVID-19 cases in B.C. haven’t increased much recently

COVID-19 case counts outside of Metro Vancouver have been level since July

70-year-old punched in the head in dispute over disability parking space in Nanaimo

Senior’s turban knocked off in incident at mall parking lot

Thousands of child care spaces coming to 35 B.C. communities

Province announces milestone in Childcare BC plan

Most Read