The B.C. government says that a projected surplus of over $200 million has been wiped out by severe losses in the fourth quarter of the 2019-20 fiscal year.
In a statement released Monday, the Ministry of Finance says that strong fiscal results from the first three quarters were overshadowed by a fourth quarter dogged by declining tax revenues, ICBC losses and expenditures on early pandemic measures.
“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,” said Carole James, Minister of Finance.
The fiscal year ended with a deficit of $321 million, a large reversal from February 2020 when James had announced an estimated surplus of $274 million.
In July, the Ministry of Finance projected a “staggering” $12.5 billion budget deficit in the 2020-21 fiscal year.
The government downplayed the situation in their release on Monday, saying that the province is in good shape to weather the accumulated debt.
“B.C. is in good financial standing with affordable debt levels at the end of the fiscal year and continues to lead the country as the only “AAA” accredited province,” the government said in their release.
The BC Liberal Party alleged in a statement that the province’s financial position was already worsening prior to COVID-19.
“The NDP government’s response to COVID-19 started mid-March, 92 per cent of the way through the fiscal year,” said MLA Stephanie Cadieux, BC Liberal Finance Co-Critic.
“In the third quarter update, the finance minister promised a $203 million surplus. So to blame the $524 million swing to a $321 million deficit on the pandemic is opportunistic.”
The BC Liberals also said that the NDP government has yet to announce an economic recovery plan, while Alberta, Ontario and Quebec have all done so.
Several provinces are reporting larger projected deficits for 2020-21 fiscal year than B.C., as COVID-19 spending and revenue losses impact government coffers.
In Alberta, the UCP government is projecting a $24.2 billion deficit for 2020-21, while Quebec Premier Francois Legault’s CAQ government is projecting $14.9 billion.
Ontario’s Conservative government is projecting a $38.5 billion budget deficit for 2020-21.
