B.C.’s current COVID-19-driven deficit is coming in at $8.1 billion, not the $13.6 billion that was projected, but the province has much more borrowing ahead to recover from the pandemic.
Finance Minister Selina Robinson laid out the NDP government’s three-year budget Tuesday, calling for a further $19 billion in borrowing to build up the health care system and carry on support programs for individuals and businesses. Income and property purchase taxes have pushed provincial revenues higher than forecast.
“The swift development of effective vaccines, together with stronger than expected economic activity in 2020 has improved the outlook,” Robinson told reporters in a virtual budget presentation from Victoria April 20.
Overall spending is increased by $8.7 billion over the three years of the budget, including “permanent funding increases” for health care, education, justice and public safety services and opioid and substance abuse prevention. Deficits are forecast to be $9.7 billion in the fiscal year just beginning, declining to $5.5 billion in 2022-23 and $4.3 billion in 2023-24.
Among those permanent increases is an additional $175-per-month in income and disability assistance payments, on top of $150 from previous NDP budgets, and a $50 increase in the seniors’ supplement.
Spending commitments also include another $100 million to continue B.C. Recovery Benefit payments of up to $1,000 per family and $500 for individuals, announced before last fall’s election. The program has paid out $1.2 billion without requirement to show pandemic income loss, and remains open for applications until June 30.
Uncertainty over B.C.’s recovery from the COVID-19 pandemic continues to weigh on the province’s forecasts. The finance ministry has included pandemic and recovery contingency funds of $3.25 billion in 2021-22, $1 billion in the following fiscal year and $800 million in 2023-24.
In health care, contingency funds of $1.5 billion for 2022-23 and $2 billion for 2023-24 are included “for caseload pressures and priority initiatives that may require funding in future budgets.” Health Minister Adrian Dix said this week that rising numbers of COVID-19 patients coming into hospitals have already resulted in some patient transfers and scheduled surgery delays, and bed capacity is nearing its limits as coronavirus cases have been running at close to 1,000 per day.
After the B.C. economy shrank by 5.5 per cent in 2020, the budget predicts it will expand by 4.4 per cent in 2021, and then grow by 3.8 per cent in 2022. From 2023 to 2025, the growth forecast is 2.1 to 2.5 per cent per year, below the government’s private sector forecast council except for 2025, when the province expects to see LNG Canada’s natural gas exports begin.