The impact of the COVID-19 pandemic has turned British Columbia’s budget forecast from black to red.
The government’s final budget numbers show a deficit of $321 million – down from a projected surplus of $274 million for the 2019-20 budget.
During a press conference on Monday, Finance Minister Carole James said that while the first three quarters of the fiscal year saw steady economic growth, the province’s financial picture dimmed because of the pandemic.
The B.C. government responded to the fallout from the COVID-19 crisis with millions of dollars worth of emergency spending in an effort to help residences stay afloat over the last several months.
In addition to the emergency spending, James states that declines in tax revenues and losses at the Insurance Corporation of British Columbia also contributed to the plunge into deficit.
“Nobody could have imagined the impact of COVID, arriving late in the fiscal year, which exceeded our prudence and had an impact on our financial results,” said James during her press conference.
The figures, part of B.C.’s public accounts released Monday, show only a small portion of the impact from the COVID-19 crisis on the province’s finances as the report centres around the year-end accounting for the last fiscal year, running from April 1, 2019 to March 31, 2020.
With the projected surplus being $274 million in February, the data shows that the province experienced nearly $600 million in losses in just a matter of weeks before the year-end.
This means the majority of the financial impact felt from COVID-19 will be reflected on this year’s budget, running April 1, 2020 to March 31, 2021.
“The final quarter of the fiscal year brought many challenges,” said James. “B.C. isn’t alone in facing these challenges, but we are in a strong position to weather them.”
In a fiscal update last month, James reported B.C.’s budget had been shattered by the pandemic, projecting a deficit of $12.5 billion for 2020-21.
She says the numbers are staggering with job losses of 235,000 since February and a predicted economic decline of 6.8 per cent by the end of this year.
B.C.’s next financial update that will focus on its first-quarter with COVID-19, will be released next month.
With files to the Canadian Press.