B.C. Finance Minister Carole James updates B.C.’s employment situation under COVID-19 restrictions, B.C. legislature, July 10, 2020. (B.C. government)

B.C. Finance Minister Carole James updates B.C.’s employment situation under COVID-19 restrictions, B.C. legislature, July 10, 2020. (B.C. government)

B.C.’s potential deficit $12.5 billion as spending spikes, taxes drop

Finance Minister Carole James gives COVID-19 outlook

A combination of emergency pandemic spending and a steep drop in expected provincial taxes has B.C. projecting a potential deficit of $12.5 billion this year, Finance Minister Carole James says.

In an economic update July 14, James released projections of a $6.3 billion drop in sales and income taxes, natural resource revenues and Crown corporation income. Spending adds the rest to what started 2020 as a balanced budget with a $227 million surplus, adding a $6 billion more to the deficit.

James said the remaining $1.5 billion of the $5 billion emergency fund voted by the B.C. legislature will be allocated for economic recovery in September, after the government completes a public survey and continues meeting with business sectors on how to proceed.

Beyond the emergency spending for business and personal financial relief, more than $1 billion of the additional spending is in health care, including lab testing, supports for long-term care facilities, health prevention and contact tracing for COVID-19, and mental health supports. Another $250 million has been directed to maintain child care services.

Nearly $90 million has been directed to temporary housing, meal and health supports, in addition to $110 million to buy hotels to move people living in encampments.

Crown corporation income is projected to be down $882 million from the February budget forecast, which James said is mostly due to the shutdown of B.C. Lottery Corp. casinos due to the pandemic. ICBC costs have declined in the early part of the 2020-21 fiscal year due to a reduction in travel, but that could change as pandemic restrictions on travel are lifted and more people return to work, she said.

B.C. Liberal leader Andrew Wilkinson warned of the impact of B.C. tax deferrals that are expected to run out this fall.

“Back in May we suggested a 90-day break on employer health tax, sales tax and hotel tax to get the economy rolling again,” Wilkinson told reporters after the update. “And instead what we saw the NDP do is say, no, they’re just going to let it pile up until September, October and send a huge bill to all these businesses when they’re least able to pay it.”

RELATED: Canada, U.S. expected to extend border travel ban to late August

RELATED: Hotel rooms for homeless too hasty, NDP government told


@tomfletcherbc
tfletcher@blackpress.ca

Like us on Facebook and follow us on Twitter.

BC legislatureCoronavirus

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Interior Health update. File photo.
86 new COVID-19 cases, two more deaths in Interior Health

The new deaths are from Heritage Square, a long-term care facility in Vernon

Keremeos Village town hall. (File photo)
Second electronic public meeting for Official Community Plan update Feb. 1

The first virtual public meeting was scheduled for Nov. 18

Sickle Point as seen from the air. (Kaleden Community Association - David Mai)
Second town hall for Sickle Point on Jan. 27

The first town hall was cut short due to technical issues

Caroline McKay
COLUMN: Bring books out of hibernation for the new year

Plenty of lesser-known works from famous authors available from the library

President Donald Trump speaks to the media before boarding Marine One on the South Lawn of the White House, Tuesday, Jan. 12, 2021 in Washington. The President is traveling to Texas. (AP Photo/Gerald Herbert)
Black Press Weekly Roundup: Top headlines this week

In case you missed it, here’s what made waves throughout the week

Seasonal influenza vaccine is administered starting each fall in B.C. and around the world. (Langley Advance Times)
After 30,000 tests, influenza virually nowhere to be found in B.C.

COVID-19 precautions have eliminated seasonal infection

Prime Minister Justin Trudeau listens to a question during a news conference outside Rideau cottage in Ottawa, Friday, January 8, 2021. THE CANADIAN PRESS/Adrian Wyld
Trudeau says Canada’s COVID vaccine plan on track despite Pfizer cutting back deliveries

Canadian officials say country will still likely receive four million doses by the end of March

Jobs Minister Ravi Kahlon shared a handwritten note his son received on Jan. 13, 2021. (Ravi Kahlon/Twitter)
Proud dad moment: B.C. minister’s son, 10, receives handwritten note for act of kindness

North Delta MLA took to Twitter to share a letter his son received from a new kid at school

Lilly and Poppy, two cats owned by Kalmar Cat Hotel ownder Donna Goodenough, both have cerebellAr hypoplasia, a genetic neurological condition that affects their ability to control their muscles and bones. Photo by Alistair Taylor – Campbell River Mirror
VIDEO: Wobbly Cats a riot of flailing legs and paws but bundles of love and joy to their owner

Woman urges others to not fear adopting cats with disabilities

A COVID-19 outbreak at Vernon's Heritage Square long-term care home has claimed seven people. (Jennifer Smith - Morning Star)
Two more COVID-19 deaths at Vernon care home

Heritage Square has now lost seven people due to the outbreak

Chief public health officer Dr. Theresa Tam provides an update on the COVID-19 pandemic in Ottawa on Friday, Jan. 8, 2021. THE CANADIAN PRESS/Sean Kilpatrick
Canada’s top doctor says to avoid non-essential travel as B.C. explores legal options

Premier John Horgan says he is seeking legal advice on whether it can limit interprovincial travel

(Big White Ski Resort photo)
13 more cases of COVID-19 tied to Big White Mountain cluster

This brings the total case count to 175, of which 32 cases are active

RCMP on scene at a home on Sylvania Cres. (Phil McLachlan /Capital News/FILE)
Two Kelowna men arrested after Rutland home invasion

Two Kelowna men, including a prolific offender, facing slew of potential charges

Most Read