COVID-19 pushes B.C. to $321 million deficit

Aug 31, 2020 | 2:50 PM Pete McIntyre

ICBC continues to hemorrhage money and COVID-19 resulted declines in tax revenues, as the province ended the fiscal year with a $321 million dollar deficit, which is $595 million lower than the surplus projected in the 2019 budget.

“While the first three quarters of 2019-20 reflected a modest surplus and steady economic growth, COVID-19 led to lower tax revenues and losses at ICBC in the fourth quarter,” Carole James, the province’s minister of finance said. “Despite the impacts of COVID-19, I am encouraged that B.C. continues to show positive signs, including improving employment numbers, robust capital spending and the best debt affordability in Canada.”

The province indicates there were three main causes of the deficit:

costs related to B.C.’s initial COVID-19 response, such as public health measures;
lower taxation revenue; COVID-19 led to an estimated loss of $397 million in personal income tax revenue and $171 million in property tax revenue.
a $298-million ICBC investment loss due to market conditions from COVID-19.

“The final quarter of the fiscal year brought many challenges,” James said. “B.C. isn’t alone in facing these challenges, but we are in a strong position to weather them. The investments we made in 2019-20, such as eliminating MSP premiums and investing in child care and housing, will make life more affordable and support people through COVID-19 as the province develops a strong economic recovery plan.”

Public accounts 2019-20 confirm there was $3.4 billion increase in investments in health, community supports, education and social services, and a historic $4.8 billion in capital spending for hospitals, schools and highways.

B.C. is the only “AAA” accredited province when it comes to debt and also posted the lowest unemployment numbers in the country with an annualized rate of 4.7 per cent.