B.C. Finance Minister Carole James updates B.C.’s employment situation under COVID-19 restrictions, B.C. legislature, July 10, 2020. (B.C. government)

B.C.’s potential deficit $12.5 billion as spending spikes, taxes drop

Finance Minister Carole James gives COVID-19 outlook

A combination of emergency pandemic spending and a steep drop in expected provincial taxes has B.C. projecting a potential deficit of $12.5 billion this year, Finance Minister Carole James says.

In an economic update July 14, James released projections of a $6.3 billion drop in sales and income taxes, natural resource revenues and Crown corporation income. Spending adds the rest to what started 2020 as a balanced budget with a $227 million surplus, adding a $6 billion more to the deficit.

James said the remaining $1.5 billion of the $5 billion emergency fund voted by the B.C. legislature will be allocated for economic recovery in September, after the government completes a public survey and continues meeting with business sectors on how to proceed.

Beyond the emergency spending for business and personal financial relief, more than $1 billion of the additional spending is in health care, including lab testing, supports for long-term care facilities, health prevention and contact tracing for COVID-19, and mental health supports. Another $250 million has been directed to maintain child care services.

Nearly $90 million has been directed to temporary housing, meal and health supports, in addition to $110 million to buy hotels to move people living in encampments.

Crown corporation income is projected to be down $882 million from the February budget forecast, which James said is mostly due to the shutdown of B.C. Lottery Corp. casinos due to the pandemic. ICBC costs have declined in the early part of the 2020-21 fiscal year due to a reduction in travel, but that could change as pandemic restrictions on travel are lifted and more people return to work, she said.

B.C. Liberal leader Andrew Wilkinson warned of the impact of B.C. tax deferrals that are expected to run out this fall.

“Back in May we suggested a 90-day break on employer health tax, sales tax and hotel tax to get the economy rolling again,” Wilkinson told reporters after the update. “And instead what we saw the NDP do is say, no, they’re just going to let it pile up until September, October and send a huge bill to all these businesses when they’re least able to pay it.”

RELATED: Canada, U.S. expected to extend border travel ban to late August

RELATED: Hotel rooms for homeless too hasty, NDP government told


@tomfletcherbc
tfletcher@blackpress.ca

Like us on Facebook and follow us on Twitter.

BC legislatureCoronavirus

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Former students’ mural showcasing Delta elementary school’s new logo on hold, for now

Ashriya and Karam Purewal painted the spirit logo last spring; formal logo mural delayed due to COVID

Delta Foundation grants Big Sisters over $5,000 for academic mentoring program

Funding made available through the Government of Canada’s Emergency Community Support Fund

Surrey man found guilty in West Kelowna killing of common-law spouse

Tejwant Danjou was convicted of second-degree murder in the July 2018 death of Rama Gauravarapu in West Kelowna

Surrey monitoring traffic as vehicles again clog city streets

Compared with city’s 2019 weekly average, deepest volume reduction was in late March with up to 46 per cent less vehicles

New collective debuts with Crescent Beach show

Nela Hallwas and Lyn Verra-Lay team for ‘Flow’

578 British Columbians currently infected with COVID-19

Seventy-eight new cases confirmed in past 24 hours

Conservation seizes fawn illegally kept captive in Vancouver Island home

A Comox Valley resident charged and fined under the Wildlife Act

Pandemic could be driving more parents to get on board with flu shot: study

University of B.C. study gauges willingness for parents to vaccinate children for influenza

Watchdog clears Okanagan RCMP in death of man after arrest over alleged stolen pizzas

The man died in hospital after having difficulty breathing and broken ribs

35,000 doses of fentanyl part of huge Maple Ridge bust

Largest seizure in RCMP detachment’s history included submachine gun, body armour

Have you seen Berleen? B.C. pig destined for sanctuary goes missing

Berleen was less than two weeks from travelling to Manitoba when she vanished

Health Canada says several kids hospitalized after eating edible pot products

People warned not to store cannabis products where children can find them

‘It’s not just about me’: McKenna cites need to protect politicians from threats

Police investigation was launched after someone yelled obscenities at a member of McKenna’s staff

Michigan plans dedicated road lanes for autonomous vehicles

First study of its kind in the U.S. to figure out whether existing lanes or shoulders could be used

Most Read