B.C. budget balanced, faces risk from ICBC
VICTORIA -- VICTORIA -- The B.C. government is forecasting a surplus of $148 million-- $31 million lower than projected last quarter-- but ICBC’s finances present a risk to the province's bottom line.
In presenting the province's second quarterly report, Finance Minister Carole James insisted the economy was resilient, pointing to B.C.'s Triple A credit rating, the lowest unemployment rate in the country, and wage growth.
Ready to crash those expectations is ICBC.
ICBC lost more than $1 billion last year. It was supposed to essentially break even with a $50 million loss. That loss is now pegged at $91 million, but it doesn't account for the hit the public insurer took after a recent court decision. ICBC wanted to limit the number of expert reports in auto insurance court claims as a way to reduce costs by about $400 million in this budget year, but a B.C. Supreme Court decision found that restriction was unconstitutional.
"We have $500 million in the forecast allowance. We projected this court case could have an impact of $400 million, but ICBC is looking at options to be able to mitigate the court decision,” said James in a press conference in Victoria Tuesday.
James didn’t say whether those numbers would be available prior to February’s budget.
Six months into the current budget, the government is forecasting a surplus that is $100 million less than at the beginning of the fiscal year. There’s also $1 billion in contingencies and forecast allowances.
The B.C. Liberals are critical of the NDP government, insisting there is no way it can make good on several election promises, including the $400 renters’ rebate.
"We've got projects or promises like the elimination of portables, like $10 a day daycare, things they aren’t going to be able to deliver on in the time they promised," said Liberal finance co-critic Stephanie Cadieux.
The Liberals have calculated $800 million worth of capital projects, including schools, roads, and hospitals, as being delayed. They say that’s evidence of bad fiscal management.
ICBC isn't the only area seeing a decline in revenue. The B.C. Lottery Corporation is seeing a drop due to less activity in casinos, and B.C.'s Liquor Distribution Branch is also seeing a dip as cannabis sales have been slow.
The forestry sector is also losing money, with two companies announcing temporary closures due to market conditions just in the last week, affecting thousands of employees.
Global economic uncertainty is also a risk to the province's bottom line.
After taking several steps to mitigate pressure on the housing sector and address speculation, revenue from property transfer taxes is up by $35 million, as the housing market starts to show signs of improvement.