B.C. forecasts $12.5-billion deficit in 2020-21

By Ian Burns

Law360 Canada (July 15, 2020, 3:09 PM EDT) -- B.C. has released its economic and fiscal update for the 2020-21 fiscal year, showing an estimated deficit of over $12.5 billion as the province deals with the fallout of the COVID-19 pandemic.

Finance Minister Carole James presented the update July 14. She noted the government has brought in $6.26 billion in COVID-19 supports to date, which includes $5 billion in supplementary spending for B.C.’s COVID-19 action plan supports, such as workers benefits, rent supplements, income and disability assistance supports and economic recovery funding. These are in addition to $1.26 billion in other tax and relief measures for people and businesses, including the one-time increase to the climate action tax credit and property tax reductions for businesses.

“B.C. has made extraordinary investments in people and businesses through B.C.’s COVID-19 Action Plan and we will continue to provide the supports people need as the pandemic and the economic impacts evolve,” said James. “B.C.’s safe restart plan is creating signs of hope for our economy as consumer confidence increases. These results have only been possible because of our strong public health measures. As we continue our work to create a strong recovery, we also have an opportunity to build a stronger B.C. that works for everyone in our province.”

More than 600,000 British Columbians have received the one-time $1,000 B.C. emergency benefit for workers, with more than 80 per cent of families in the province receiving an enhanced climate action tax credit in July. Over 200,000 people have received disability and income assistance crisis supplements, with more than 81,000 applications approved for the temporary rent relief supplement.

The government said private sector forecasters expect B.C.’s real gross domestic product (GDP) to decline by 5.4 per cent in 2020, which is better than the decline of 6.6 per cent on average across Canada. But James said the pandemic “has exposed underlying gaps in our economy and society.”

“We have been reminded of the need for strong public services and supports, workplace safety and our collective responsibility to take care of each other, and I’m looking forward to putting people’s input into action as we move forward with the economic recovery of our province,” she said.

British Columbia’s progress in flattening the curve of COVID-19 has been noted, with the province managing to keep the number of confirmed cases per one million below the rest of Canada and most other countries.

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