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

Irish folk supergroup Kíla set to perform on Saturday

Online concert will be available through Harrison Festival Society

Sprinkler system extinguishes fire in industrial building in Chilliwack

Progress Way building had only minor fire, smoke and water damage thanks to sprinkler system

UPDATE: Suspect who once killed a man in jail was arrested in Chilliwack after truck fire

Jordan Cole Burt was taken into RCMP custody while wanted on an outstanding warrant

Two Abbotsford elementary schools record COVID-19 exposures, according to Fraser Health

‘Exposures’ defined as 1 positive case at school, ‘clusters’ as 2 or more, ‘outbreaks’ as widespread

UPDATE: Fatal collision Sunday leaves Chilliwack father and five children with minor injuries

Driver who T-boned family after running stop sign on McGuire Road died at the scene

B.C. reports 96 new COVID-19 cases, one hospital outbreak

61 people in hospital as summer ends with election

Earthquake off coast of Washington recorded at 4.1 magnitude

The quake was recorded at a depth of 10 kilometres

B.C.’s top doctor says she’s received abuse, death threats during COVID-19 response

Henry has become a national figure during her time leading B.C.’s response to the COVID-19 pandemic

BC Liberals must change gears from election cynicism, focus on the issues: UBC professors

COVID-19 response and recovery is likely to dominate platforms

B.C. could be without a new leader for multiple weeks after Election Day: officials

More than 20K mail-in voting packages were requested within a day of B.C. election being called

Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Dozens of Canadian venues to light up red in support of entertainment workers

Local facilities among dozens across Canada to participate in Light Up Live

Vancouver Island sailor stranded in U.S. hospital after suffering massive stroke at sea

Oak Bay man was attempting to circumnavigate the world solo

Most Read