B.C. slashes deficit projection to $4.8 billion, citing higher-than-expected revenues
B.C. Finance Minister Selina Robinson has revised the province's deficit projection to $4.8 billion, down from an initial forecast of $9.7 billion, citing higher-than-expected revenues.
The minister cited higher-than-expected revenues from personal and corporate income taxes, natural resources and federal funding for the improved outlook.
In a first quarterly update, which shows revenues and expenses from April to June 2021, Robinson added higher retail sales, exports and housing sales have helped the economy rebound at a faster rate than expected just five months ago when the budget was tabled.
“The recent increase in COVID 19 case numbers and changes to how we progress in the B.C. restart plan may impact our current and ongoing forecasts,” she said during a news conference Monday morning.
Still, she noted the recovery has been uneven. Some businesses are reporting difficulty in attracting and keeping workers, spending on services such as travel and recreation are down and there are lingering impacts to youth, women and people of colour who were disproportionately affected by the COVID-19 pandemic.
As of August, the province’s unemployment rate was 6.2 per cent, higher than pre-pandemic levels, but lower than the national average of 7.1 per cent.
Retail sales were 13 per cent higher than pre-pandemic levels, with spending on autos and parts, building supplies and gardening both up by more than 35 per cent.
Workers looking for more space for a home office also propelled spending on housing. The projection for property transfer tax revenue this year is now $360 million higher. To the end of June the province had collected nearly a billion dollars. While Robinson said housing activity has slowed in recent months, it’s still at near record levels and house prices are also continuing an upward trajectory.
The province notes significant risks to the budget primarily from the ongoing pandemic. While $3.25 billion has been allocated as of June 30, $317 million were out the door. There’s still more than $600m left to deal with any other impacts.
The opposition Liberals slammed the government for a lack of planning, and pushed for more supports, especially for those dealing with the impact of the vaccine card.
“My phone in my email is just lighting up from businesses saying ‘My lunchtime rush was dead today,’” finance critic Peace River South MLA Mike Bernier told CTV News.
“People are refusing to come in. What's that going to mean going forward and where's the supports from governments who, in essence are putting these criteria in place.”
Robinson said the province would work on further supports with Ottawa but didn’t provide further details.