Scary BC budget numbers … hardly a shock
Finance Minister Carole James delivered the big scary numbers that no one wanted to hear but we all knew were coming. The Fiscal Update began with the admission that the impacts of COVID-19 will shape generations.
The Province has spent $6.26 billion to steer our corner of the world through this part of the pandemic with supports for people and businesses.
The NDP government tabled a budget in February with zero operating debt, Triple AAA credit ratings and one of the lowest unemployment rates in the country.
In the months that followed, BC lost 235,000 jobs, youth unemployment rose to 29 per cent and women are still more likely to be out of work than men.
The deficit projection for 2020-21 is $12.5 billion. It’s a number that doesn’t register as real.
Projections put the province in a deficit position for many years. Impacts are still strictly best guesses because we are still in the midst of the pandemic.
Unemployment numbers reached their highest count since 1987, and they are falling now. Young people and women are over-represented in these numbers as they often work in hospitality and tourism. In addition, more women remain at home to provide care for children or sick family.
Retail sales were 20.7 per cent lower in April over March, the largest single decline on record.
Home sales were down month over month and remain at 12 year lows.
The numbers reported reflect the months of April and May, changes in June and July are not yet reflected. There are positive increases in jobs, sales and more for June and July that won’t show up until the next update.
Revenues will be down $6.3 billion in 2021 over the original 2020 forecast.
Tax revenues are down $4.2 billion; natural resources revenues are down by $300 million; and, net revenues from Crown agencies and corporations will be down about $1.8 billion.
Household income has fallen 3.9 per cent compared to the 2020 budget assumption.
The government’s release includes private sector forecasters’ projections. They expect BC’s real gross domestic product to decline by 5.4 per cent in 2020 – better than the decline of 6.6 per cent on average across Canada.
The province was in a good financial position to provide supports:
- To date, 600,000 British Columbians have received the one-time, tax-free $1,000 BC Emergency Benefit for Workers.
- It doubled the Climate Action Support Credit for over 80 per cent of British Columbians.
- Pandemic pay was provided to about 250,000 front line workers – $4 more an hour for 16 weeks in a lump sum payment.
- It provided and extended the $300 disability and income assistance supplements which included low-income seniors.
- Businesses got a $700 million tax cut with property tax cuts and deferred payments. Hydro rates have been reduced, rent relief has been introduced and protection from evictions is in place.
- So far, more than 81,000 applications have been approved for the temporary rent relief supplement.
Families and students can expect more breaks in the fall. These were in the budget before COVID-19 changed our world and fiscal outlook.
Dr. Bonnie Henry’s mantra continues to apply. Be kind, be calm and be safe.