B.C. lowers budget deficit forecast, but points to uneven, uncertain pandemic recovery

The health and economic risks posed by the COVID-19 pandemic cast uncertainty on the financial horizon in British Columbia despite signs of recovery, says Finance Minister Selina Robinson.

B.C.'s financial statement for the first three months of the 2021-22 fiscal year projects a deficit of $4.8 billion, about half the $9.7 billion originally forecast in the budget, Robinson told a news conference on Monday.

The province also projects economic growth slightly higher than previously forecast, with six per cent in 2021 and four per cent in 2022, but the pandemic adds variables to the province's bottom line, Robinson said.

"Despite the progress we have made, there is still much risk and uncertainty related to our fiscal plan,'' she said.

"The recent increase in COVID-19 case numbers and changes to how we progress with the B.C. restart plan may impact our current and ongoing forecasts.''

The rise in B.C.'s COVID-19 cases over the past month prompted Provincial Health Officer Dr. Bonnie Henry to put a hold on B.C.'s plan to remove most pandemic restriction measures on Sept. 7.

Robinson said increased COVID-19 immunization rates will continue to build a stronger economic recovery.

"We are seeing many sectors reopen and stay open, and employment is above pre-pandemic levels,'' she said.

"But as we've seen over the last year, the last 18 months, things can change quickly, and that remains the most significant risk to our projections.''

In a statement, B.C. Liberal finance critic Mike Bernier accused the NDP government of reacting too slowly to the pandemic in its support programs for individuals and businesses.

"With problems like the growing labour shortage, debt and other pressures caused by the fourth wave of COVID-19 facing the province, this is simply unacceptable,'' he said.

"It's clearer than ever that B.C. needs a real economic plan.''

The lower deficit projection is the result of an improved job market along with higher revenues from natural resources and federal transfers, Robinson said.

She expects B.C.'s tourism and recreation sectors, hit hard during the pandemic, will continue to endure an uneven recovery.

Statistics Canada said B.C.'s jobless rate in August was 6.2 per cent, which was below the national average of 7.1 per cent. Robinson said at the outset of the pandemic in early 2020, B.C.'s jobless rate hit 13 per cent.

She said the cost of fighting this summer's wildfires, now forecast at almost $900 million, will also put pressure on the
budget.

Robinson said she will introduce an updated recovery plan in the fall.