VICTORIA — British Columbia is expected to battle budget deficits for the next year and likely longer as the COVID-19 pandemic rattles economies provincially and globally, Finance Minister Carole James said Monday.
The pandemic turned B.C.'s 2019-20 budget forecast from black to red in less than three months, and this year's budget numbers are pointing to a 2020-21 deficit of $12.5 billion, she said.
James said the government's final budget numbers for the fiscal year which ended March 31 show a deficit of $321 million from a projected surplus of $274 million for the 2019-20 budget.
She 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.
"COVID-19 has ravaged economies across the world and B.C.'s not immune to those impacts," James said at a news conference. "The effects started for B.C. as they did for other jurisdictions during the final quarter of the last fiscal year."
She said declines in tax revenues, losses at the Insurance Corporation of British Columbia and early measures to tackle the pandemic plunged the fiscal year into deficit.
In a fiscal update last month, James said B.C.'s budget had been shattered by the COVID-19 pandemic, with a projected deficit of $12.5 billion for 2020-21. She said Monday more budget tracking details will be available during quarterly reports in the coming weeks, but July's numbers remain firm.
The July update predicted an economic decline of 6.8 per cent by the end of this year.
"There's no question it will be a challenging year and a few challenging years ahead when it comes to the finances," James said.
The public accounts showed B.C.'s economy grew by 2.8 per cent in 2019-20, above the national average of 1.7 per cent.
James said the government will release details shortly of its $1.5-billion economic recovery plan to help employers and employees rebuild during the pandemic.
The funding is part of the B.C. government's $5-billion pandemic plan introduced in spring that included tax deferral incentives for businesses and a $1,000 tax-free emergency benefit to workers whose ability to work was affected by the pandemic.
B.C. Opposition Liberal Leader Andrew Wilkinson said the recovery fund failed to include tourism operators whose businesses have been particularly hard hit by the pandemic.
This report was first published by The Canadian Press on Aug. 31, 2020.
Note to readers: This is a corrected story. A previous version said the projected surplus was $227 million.