The B.C. Government has released its first quarterly report for 2020-2021, revealing an adjusted deficit forecast of $12.8 billion amid COVID-19.
The growing deficit is in large part due to increased spending during the global pandemic, as well as losses experienced as a result of preventative measures, the Ministry of Finance said on Thursday.
Minister of Finance, Carole James, says this $12.8 billion mark is on track with the Province’s July fiscal and economic projections – when a historic $12.5 billion deficit was predicted.
“The pandemic has threatened lives and livelihoods, and our government responded with one of the most supportive, comprehensive action plans in the country,” said Carole James, Minister of Finance. “Since the Province’s July fiscal and economic scenario, we have seen stronger than expected consumer spending, housing activity and employment gains. These gains are offset by increased prudence to help B.C. weather the long road ahead.”
During a press conference on Thursday, James said the numbers confirmed revenue declines in taxation, natural resources and other sources that were anticipated in July, however, the overall impacts on revenues and expenses are lower. James said the data is indicating a $5.7-billion decline from Budget 2020, compared to a $6.3-billion decline shown in the July scenario.
When comparing with the previous projections in July, September’s report shows better than expected employment gains, retail sales and housing activity, resulting in revenue gains in provincial sales tax, personal income tax and property transfer tax.
“The updated deficit forecast includes a $1 billion forecast allowance as part of government’s commitment to economic prudence in response to the heightened uncertainty brought by COVID-19,” reads a statement from the Ministry.
In an update last week, James revealed the British Columbia’s overall unemployment rate for the month of August was 10.7 per cent – this is up from 5 per cent back in February, prior to the pandemic.
Included in the first quarterly report was an update on B.C.’s employment landscape, broken down by sector, as well.
As far as individual sectors for employment, wholesale & retail trade was hit the hardest, while jobs in utilities saw the biggest increase in employment.
The first quarterly report also includes a summary of COVID-19 investments to date, with details of the $7.61 billion in COVID-19 response measures that the government deployed in an effort to support people and businesses since the beginning of the fiscal year.
The COVID-19 Action Plan has included supports such as workers benefits, rent supplements, income and disability assistance supports, and economic recovery funding.
As part of the COVID-19 Action Plan, $1.5 billion has been earmarked for economic recovery measures to be announced in September.
James admits that the first quarter has presented many challenges for the province, however, believes that B.C. is in a “strong position to weather them.”
B.C.’s full First Quarterly Report can be found at: www2.gov.bc.ca/gov/content/
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