Photo Courtesy: Province of British Columbia, Flickr

By CKPG Today

Pandemic adds to provincial deficit

$12.8 billion deficit for 2020-21 fiscal year, pandemic to blame

Sep 10, 2020 | 10:43 AM

VICTORIA—According to B.C.’s Finance Minister the COVID-19 pandemic’s impact on provincial revenues and unprecedented government spending on supports for British Columbians has led to an updated provincial deficit forecast of $12.8 billion for the 2020-21 fiscal year.

The Province says that the deficit is on track with the Province’s July fiscal and economic scenario.

“Since the Province’s July fiscal and economic scenario, we have seen stronger than expected consumer spending, housing activity and employment gains. These gains are offset by increased prudence to help B.C. weather the long road ahead.”—Carole James, Minister of Finance

The Province’s first quarterly report confirms revenue declines in taxation, natural resources and other sources that were anticipated in July.

However, the overall impacts on revenues and expenses are lower, with a $5.7-billion decline from Budget 2020, compared to a $6.3-billion decline shown in the July scenario. Improvements from July’s update include better than expected employment gains, retail sales and housing activity, resulting in revenue gains in provincial sales tax, personal income tax and property transfer tax.

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The updated deficit forecast includes a $1-billion forecast allowance as part of government’s commitment to economic prudence in response to the heightened uncertainty brought by COVID-19. The first quarterly report also includes a summary of COVID-19 investments to date, with details of the $7.6 billion in COVID-19 response measures that have supported people and businesses since the beginning of the fiscal year.

Photo Courtesy: Province of British Columbia
, Flickr.