$4.2 billion deficit forecast as B.C. budget keeps spending to tackle affordability crisis
Tax credits for renters and increased family, carbon tax benefits as finance minister pledges to stay course
A host of new spending measures and tax credits to renters, families, and everyone in between was announced by the B.C. government in Tuesday's budget — while also forecasting a $4.2 billion deficit in the upcoming year.
"People are facing real challenges," said Finance Minister Katrine Conroy in announcing a series of new spending measures the province will launch this year, which include:
- The creation, six years after a promised $400 renters' rebate, of a renters' tax credit of up to $400 for renter households making under $80,000 a year.
- Increasing the monthly shelter rate for income and disability clients by $125/month.
- Increasing the B.C. Family Benefit between $75 and $750 a year, including a new supplement of up to $500 a year for single parent families.
- Increasing the maximum Climate Action Tax Credit for an adult from $193.50 to $447.
In addition, the province announced $586 million in services for people with substance use issues — mostly towards treatment and recovery beds — $214 million over three years more for K-12 school food programs, $119 million over three years for free prescription contraception, and $264 million more over three years for foster families.
"I know some people are feeling vulnerable right now," said Conroy.
"This budget provides new targeted support to those facing increased costs."
Record capital spending
The government also projected additional deficits of $3.7 billion in 2024/25 and $3 billion in 2025/26 — partly due to new spending and partly due to forecasts of lower revenues as economists forecast lower growth and higher interest rates over the next few years.
"The province can't control global forces, but we can make choices that protect British Columbians," said Conroy, whose budget sees forecasted revenues decrease from $83 billion in 2022/2023 to $78 billion in 2023/2024.
"When times are tough, you need government in your corner."
In addition, the province's yearly capital spending on one-time infrastructure projects — such as the $16-billion Site C dam and $2.2 billion for the new St. Paul's Hospital — will increase from a record $8 billion this year to $12 billion in 2023/24 and $13 billion the following two years.
As a result, the province's total debt is forecast to go from $93 billion to $134 billion by 2026.
Conroy defended the approach by saying the province's taxpayer-supported debt "remains relatively low" and said it was important to continue investing in key services.
"I wouldn't say we don't care about deficits, but I will say we've proven during the pandemic that … we can support people, but we still have a strong economy," she said.
More spending to come?
The government also highlighted a number of spending announcements it had made in recent months, $230 million for 256 new RCMP officers, a billion-dollar infrastructure fund for municipalities and $500 million to B.C. Ferries.
Some of those funding announcements were immediate spending from the current fiscal year, and as a result, the projected surplus for 2022/2023 has decreased from $5.7 billion to $3.6 billion.
When asked if more one-time spending could take place before the fiscal year ends or if the remaining surplus will be used to pay down the debt, Conroy hinted more spending was on the way.
"We're going to continue to use the surplus to support people in the province, to do the things we can do," she said.
"We can't put the surplus on ongoing costs. You can't depend on a surplus like that … but we will be looking at ways to support people in this province."
Opposition B.C. Liberal Leader Kevin Falcon said the budget is a "massive disappointment. There's nothing in this budget that talks about growing the economy.
"Do you feel better off than you were six years ago?" he said. "I'm struggling to find anything that feels like it's gotten better.''
Green Leader Sonia Furstenau said the budget acknowledges challenges facing B.C., but fails to shape a better future for the province.
"It takes courage to make lasting changes that support people over the long-term, not just cheque by cheque,'' she said in a statement.
"Premier Eby seems to be sprinkling money around to a lot of existing programs and spending big on affordability cheques, but we're not going to solve the underlying issues that are driving big problems.''
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With files from The Canadian Press