B.C.’s deficit is expected to grow to $13.6 billion by the end of the fiscal year next spring, almost a billion dollars higher than was forecast in September, according to an update delivered this morning.
Continuing COVID-19 response measures will add another $851 million in debt to the tally posted in the previous quarterly report.
“2020 has been a tough year for families, communities and our economy,” said Finance Minister Selina Robinson. “I am encouraged by the economic improvement we’re seeing, but I know not everyone has been similarly affected. We will continue to support people and businesses through this pandemic and into a brighter year.”
While the unprecedented operating deficit is growing, the update shows slight improvements in some indicators from estimates earlier this year.
Provincial revenues are not expected to drop as much as was forecast in September, as there have been gains in some tax areas and Crown corporation revenues.
A partial recovery is expected next year, but “it’s going to be a while before a fiscal update for B.C. resembles anything like the pre-pandemic province we knew,” Robinson said.
The government says the pandemic response costs now stand at $10 billion, including worker benefits, rent supplements, income supports and recovery funding. That total includes the $2 billion in additional spending now before the legislature, mostly for the recovery benefit that will soon be delivered directly to most citizens.
The update assumes that some sectors such as tourism, recreation and retail are not expected to be operating at full capacity for some time.
It forecasts that B.C. Crown corporations will be $298 million better off than was expected earlier in the year, due mostly to improved revenues at ICBC and the B.C. Liquor Distribution Branch.
ICBC’s net income is expected to be $410 million, a $324 million improvement due to lower claims costs because of fewer accidents and a recovery on earlier investment losses. That’s offset by losses at the B.C. Lottery Corp. due to casino closures.
