The financial impact of COVID-19 will be billions of dollars in B.C., minister confirms
VANCOUVER -- B.C. is predicting a deficit of $12.8 billion this fiscal year, primarily because of spending and loss connected to the COVID-19 pandemic.
Finance Minister Carole James gave the update by releasing the first quarterly report for 2020-21 fiscal year Thursday morning.
"Just as we're seeing globally and in Canada, B.C.'s economy and everyday lives for businesses and the people of our province have been seriously impacted," James said in the news conference.
"As we closed our businesses and our schools and our social circles, we came together but we stayed apart to stop the spread in our communities … these unprecedented times have called for unprecedented investments."
In a July economic scenario, James revealed for the first time that B.C. could face a deficit of about $12.5 billion. At the time, James described it as "the worst downtown experienced in our province in recent history," and Thursday's forecast shows that deficit is on track.
"We already know that COVID-19 has impacted almost all of B.C.'s revenue streams," James said. "The province's revenue forecast has declined, though less than we anticipated in the July scenario."
The updated deficit forecast includes a $1-billion allowance included in the government's plan to address "heightened uncertainty brought by COVID-19."
And, as part of the COVID-19 action plan, $1.5 billion has been set aside for economic recovery measures, which will be announced this month.
"Being a realist, we have a long road ahead of us," James said Thursday.
In August, James released financial results from the last fiscal year, revealing the unexpected costs associated with the pandemic led the province to a $321 million deficit, which was $595 million lower than the surplus originally projected in the 2019 budget.
"While the first three quarters of 2019-20 reflected a modest surplus and steady economic growth, COVID-19 led to lower tax revenues and losses at ICBC in the fourth quarter," James said at the time.
James said the costs associated with the pandemic – like public health measures – along with lower tax revenue were some of the reasons for the deficit.
"The final quarter of the fiscal year brought many challenges," James said. "B.C. isn't alone in facing these challenges, but we are in a strong position to weather them."