B.C.'s 2024 deficit under forecast at $7.3B, but taxpayer-supported debt nears $100B

British Columbia's final deficit for the fiscal year has come in at $7.3 billion, $564 million lower than the original projected number in Budget 2024.

The final deficit unveiled Thursday by Finance Minister Brenda Bailey is also about $1.8 billion lower than the most recent third-quarter forecast.

But the province's public accounts also show a $23.7-billion increase in taxpayer-supported provincial debt, bringing the figure to $99.1 billion. That's an increase of more than 31 per cent.

"We will continue to make the tough decisions necessary to make sure every dollar we spend has the greatest impact in the lives of British Columbians," Bailey said in a news release.

The ministry attributed the debt spike to the province having "supported people through climate emergencies and high costs."

It said that B.C.'s taxpayer-supported debt-to-GDP ratio was still lower than most other provinces at 23.2 per cent, compared with 41.6 per cent in Ontario, 41.9 per cent in Quebec and 22.1 per cent in Alberta.

So-called self-supported debt, incurred by revenue-generating Crown corporations and other entities, also rose from $32.1 billion to $34.8 billion. 

Total provincial debt reached $133.9 billion, up by $26.4 billion or 24.5 per cent.

Bailey said B.C. was able to report a lower-than-projected deficit largely due to revenue from the Insurance Corporation of British Columbia.

But the higher revenues from ICBC and elsewhere were offset by lower natural resource revenue, the ministry said.

Bailey added that the deficit coming in lower than projected does not offer her any comfort.

"Let's be clear, it's a $7.3 billion deficit, and I take that very seriously," she said. "We have a lot of work to do ahead of us to get back to a path to balance, and that's the work that we're engaged in now."

Total revenue was about $2.5 billion higher than expected in the budget, while GDP grew by 1.2 per cent, lower than the Canadian average of 1.6 per cent.

The ministry said the province spent a record $10.4 billion on infrastructure, including roads, hospitals and schools. 

Among the projects were the Mills Memorial Hospital replacement in Terrace, the Broadway Subway in Vancouver, and high schools and student housing throughout the province.

The unemployment rate was 5.6 per cent.

"While our work to improve our fiscal position is underway, it is clear that, despite challenging economic conditions, this government is making progress on the things that matter to British Columbians," Bailey said.

Economic downturn

The B.C. Conservatives' finance critic Peter Milobar said in a statement that the rising debt levels aren't being reflected in the level of support for the public, saying the government was "racking up record levels of debt while delivering the worst public services in a generation."

"This year alone, the NDP added $15.78 billion in new operating debt — and what do British Columbians have to show for it?" Milobar said. "ERs are still closing, schools are crumbling, and ferries can't run on time."

"David Eby isn't just borrowing more — he's making life more expensive for future generations while failing to fix anything today," he said of B.C.'s premier. 

University of British Columbia Sauder School of Business associate professor Thomas Davidoff said the public accounts match what's typically seen in an economic downturn where there's "more need and less revenue."

But that didn't mean cost savings can't be found if the province is willing to change tack on certain policies.

"I am confident that there are some inefficiencies, as there are in any budget," Davidoff said in an email. "If I were in charge, I would not spend money on trying to make brand new housing units affordable, for example."

Greater Vancouver Board of Trade president Bridgitte Anderson said she recently met Minister of Jobs and Economic Growth Ravi Kahlon to express concerns about the "dire" situation faced by businesses in light of tariffs and trade uncertainty.

The board launched a campaign in January to challenge to province to achieve three-per-cent annual economic growth.

"It is very clear that there needs to be an economic growth plan plus a sound fiscal plan to get us back in track, and the government has been talking about that and making some indications that they're going to do that," she said.

Province wants to increase revenue

Bailey says B.C. must increase revenue despite the current economic headwinds.

"There is no question that that challenge is more complex in the current trade environment," she said. "But British Columbia has everything we need to be successful." 

She pointed to the province's natural resources, skilled workforce and determined entrepreneurs as key assets. "Our task as government is to set those groups up for success," she said. "That's the work we're doing now."

"Our task as government is to set those groups up for success. That is the work we're doing now."