Thursday, September 28, 2023

BC Wildfires among expenses to burn through Government financials on way to $6.7 Billion deficit

The Province of British Columbia delivered a Quarterly report on Wednesday that provided a glimpse at the state of the finances for the province, as well as some of the challenges that have come this year to hit the bottom line.

The Report from Katrine Conroy noting as to how the devastation of the wildfire season, the current level of high interest rates and a slowing global economy have all been challenges for the province to tackle this summer and now into the fall.

“With a diverse economy and strong financial planning, B.C. is in a good position to weather global uncertainties as well as keep people safe through this wildfire season and drought. Through challenges like the pandemic, global inflation and high interest rates, we have led the country in making smart investments in people and the services and infrastructure they depend on.” -- Katrine Conroy, Minister of Finance.

Once the number crunching was done by the Finance Department, the update to the year end deficit projection was set at $6.7 Billion an increase of $2.5 Billion from the Budget released earlier this year.

The months ahead are still ones of uncertainty the Finance Minister noted in her review, though observing  that the government plans to keep to its plans and continue to support communities. 

Conroy used the report release to also highlight the different approaches the Current government takes compared to the previous BC Liberal one.  A familiar theme of late for the NDP government, which has been the government of the province since 2017. 

“Supporting people and communities has made our economy stronger and better able to withstand challenges, and we will continue to have people’s back now and for the long term.  

During hard times and slower economic growth, the old government chose to cut services and increase fees, which was the wrong approach. 

No matter what, we’re putting people first and making decisions that support the services and infrastructure they depend on to build a good life”

Of note from the review, is the list of areas where the economic outlook is at risk

The Report highlights the still strong credit rating that BC enjoys as well as how capital spending has been increased in 2023.

British Columbia has among the best credit ratings of all provinces and one of the lowest debt-to-GDP ratios in the country, which translates into low debt servicing costs for B.C. Projected capital spending increased by $413 million, mostly to support improvements to health-care facilities and housing projects. 

The update also includes several projects approved for construction since Budget 2023, including Phase 2 of the Burnaby Hospital redevelopment.  

Included in her list of capital spending is the recent announcement for a new middle school in Prince Rupert, which so far has no firm date for construction or a location announcement.

The Finance Minister's statement towards the Quarterly report also notes of the challenges ahead for 2024 and what 'levels of prudence' the Government has put in place towards them.

The longer-term outlook in the financial plan forecasts that global economic headwinds will affect B.C. and the rest of Canada in 2024, with slower economic growth and higher unemployment. 

Levels of prudence are built into the fiscal plan, including $5.5 billion in contingencies and a $700-million forecast allowance this year to respond to unanticipated changes or expenses.

The Finance Minister's information release can be read here, the full report can be reviewed here.

BC United Opposition Leader Kevin Falcon used his social media stream to offer a short synopsis of the statement

BC Green leader Sonia Furstenau put her party's focus on the government's reliance on fossil fuels for revenue generation.

So far the BC Conservative Party which has seen some success in recent polling mostly at the expense of Falcon's BC United party, has yet to comment on the Quarterly report.

A review of some of the media coverage of the Quarterly report can be explored through our political blog D'Arcy McGee.

More notes from the Legislature can be reviewed from our archive page.

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