British Columbia’s projected deficit rises to $ 13.6 billion thanks to additional support for COVID-19

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VICTORIA (NEWS 1130) – British Columbia’s projected deficit for fiscal year 2020-21 has increased by almost $ 1 billion to $ 13.6 billion since the last update.
The province forecast a budget deficit of $ 12.8 billion in September.

The new figure includes the stimulus spot checks through the BC Recovery Benefit and Recovery Supplement that many British Columbians will receive. This comes with a price tag of $ 2 billion.

The financial update shows that the province is recording more revenue than it anticipated in its first quarterly update.

The financial update shows that while we haven’t returned to where we were before the pandemic, British Columbia isn’t doing too badly.

“While there is still a long way to go, this update offers encouraging signs for all of us,” Finance Minister Selina Robinson said Thursday. “Our debt is still affordable, even after the budget deficit and increasing borrowing, and our expected decline in GDP is smaller than in the first quarter, with a partial economic recovery on the horizon next year.”

Robinson notes that debt “remains affordable” due to low interest rates, although the province has increased its borrowing forecast.

Despite the positive outlook for 2021, the province notes that British Columbia will not have returned to where it was likely until late 2022 or early 2023.

Overall, this is a picture of what is going well and the balancing of what is not, such as the increase in personal spending balancing spending year over year. for things like clothing, furnishings, gasoline and vehicles.

As has been the case for many months, jobs are still on the decline in sectors such as construction, tourism and catering, but are on the increase in scientific and technical services, health and public administration.

Sectors like tourism, hospitality, entertainment and retail are not expected to fully recover until travel is widely permitted again.

Job gains and remaining struggles

“Real GDP forecasts for 2020 have improved since the first quarterly report. British Columbia’s record capital investments continue to fund new projects across the province, ”said Robinson.

Despite huge job losses and impacts on the economy in the spring, at the start of lockdowns related to COVID-19, the minister noted an improvement in the labor market.

She said British Columbia lost almost 400,000 jobs in March and April. Since the worst of lockdowns, she pointed to “substantial job growth for seven consecutive months, bringing our total employment to 98.5 percent of pre-pandemic levels.”

“This is the highest resumption rate of any of Canada’s four largest provinces,” said Robinson.

Although there have been job gains, Robinson said some sectors – such as retail and services, which have been hit hard by social distancing measures and travel restrictions – continue to shrink. discuss.

“Notable declines were recorded in wholesale and retail trade, transport and warehousing, accommodation and food services, as well as the information culture and leisure sectors”, a- she explained, adding that youth and young adults have been hit hard, mainly because these demographics “dominate restaurant and retail.” ”

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