One-time contributions from the federal government’s vast deficit spending brightened B.C.’s financial picture for the year dominated by the COVID-19 emergency, the province’s annual public accounts report shows.
In the midst of the pandemic last fall, with businesses forced to close and unemployment rising, B.C. Finance Minister Selina Robinson forecast a deficit of more than $13 billion. But a surging real estate market and job recovery delivered higher-than-expected income and property transfer taxes, contributing to an operating deficit of $5.5 billion when the books were closed for 2020-21. That’s an improvement of $2.7 billion since April, when Robinson’s first budget was presented, two months later than usual.
“While provincial expenses significantly increased and provincial tax revenue dropped as government delivered pandemic response and recovery programs, provincial revenues were higher than expected due to federal government one-time pandemic contributions,” Robinson announced July 28.
— Tom Fletcher (@tomfletcherbc) July 28, 2021
As of March 31, B.C.’s total provincial debt stood at $87.1 billion, up $14.9 billion during 2020-21. About 31 per cent of that debt is accumulated by commercial Crown corporations such as B.C. Hydro and the Insurance Corp. of B.C., and is considered self-supporting debt, to be financed by the corporations.
The audited public accounts show that ICBC made it back into the black, with net income of $1.5 billion, up from a $376 million loss in 2019-20. ICBC recently paid out small rebates to customers to share savings from reduced accident claims during travel restrictions and workplace closures during the pandemic.
Pandemic response and recovery programs totalled $10.1 billion for the year, with $2.57 billion of that going to health, child care, temporary housing and essential services, and $1.3 billion for recovery efforts such as job creation and training, community infrastructure and social supports.
Another $2.9 billion went to financial support, including pandemic recovery benefits of $1,000 per family and $500 for individuals, announced before last fall’s snap election without requirement to show pandemic income loss. Other pandemic spending included temporary rent supplements for individuals and businesses, and an emergency benefit for workers to supplement the Canada Emergency Response Benefit for people who lost income.
Robinson’s April budget forecast more than $19 billion in deficits over three years, with much of the new spending built in permanently for health care, education, public safety and other program expansions.