B.C.’s projected deficit soars to $320M due to COVID-19 pandemic

[News 1130 – August 31, 2020]

VICTORIA (NEWS 1130) – The province is looking at a $320 million deficit instead of the $200 million surplus forecast just six months ago, according to the latest financials from the B.C. government.

The COVID-19 pandemic has forced the province into millions of dollars worth of emergency spending to help British Columbians weather the health crisis, all while revenue from taxation, Crown corporations, and natural resources has been down.

“The pandemic led to lower tax revenues, a bigger loss at ICBC in the fourth quarter, and unexpected government spending and health authority costs in response to COVID-19. Because of this, fiscal 19-20 ended in a deficit.”

The province says the COVID-19 pandemic is hitting the already-struggling ICBC, with the corporation seeing a nearly $300-million hit on investments.

The upside, however, is that B.C.’s solid financial rating remains stable. B.C. continues to retain one of Canada’s only triple-A ratings.

“There’s no question that it will be a challenging year and … a few challenging years ahead when it comes to the finances,” James says.

“We’re going to have deficits, no question, just as every other jurisdiction is going to. We need to spend every dollar wisely. We need to be fiscally responsible and we will do that with every dollar that we spend but we will also ensure those supports are in place for the people of British Columbia.”

However, James says B.C. went into the pandemic strong noting it retains high credit ratings. She says the focus remains on getting and keeping people on their feet.

“The important message in all of this is that the government has your back.”

James says the plan for the $1.5 billion recovery fund will be laid out in the next few weeks.

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