The B.C. Ministry of Finance is forecasting a $12.5 billion budget deficit in the 2020-21 fiscal year due to impacts of the COVID-19 pandemic. Overall, the federal government is projecting a deficit of $343 billion.
Back in February 2020, the B.C. government tabled a balanced budget reflecting a small surplus—right before the pandemic reached the province.
“Mere weeks after budget 2020 was tabled, our entire world changed,” said Minister of Finance Carole James on Tuesday.
Since February, the province has lost over 235,000 jobs, with the highest impact reflected on the youth unemployment level which currently stands at 29 per cent.
Women are also more likely to have lost jobs than men, with the female unemployment rate rising from 4.8 per cent in February to 13.4 per cent in June.
Data shows that these are the highest rates of unemployment in B.C. since 1987.
“This could be the worst downturn experienced by our province in recent history,” said James.
The $12.5 billion deficit scenario is based on current estimates and could change dramatically based on how successful the province and country is in mitigating COVID-19 transmission.
James adds that there is hope for the future, as B.C. has seen a slight uptick in employment rates in June which indicated a 5.4 per cent increase last month.
The overall gains in employment in May and June brings back about 40 per cent of total job losses in the province since February.
The snapshot presented today indicates that while B.C.’s real gross domestic product (GDP) could decline by 6.8% in 2020, the economy could grow by 3.1% in 2021 as recovery continues.
A full presentation of the 2020-21 fiscal update can be viewed here.