B.C.'s deficit projected at $13.6B, with partial economic recovery anticipated for 2021

A fiscal update provided by the B.C. government on Thursday confirms the province's deficit is projected to be $13.6 billion, including $2 billion in additional spending on financial supports during the COVID-19 pandemic.

Minister of Finance Selina Robinson said there are some indications that B.C.'s economy is recovering more quickly than previously anticipated, but it may not bounce back fully until late 2022 or early 2023. 

"There is hope on the horizon," said Robinson, adding projections are based on a "large-scale global immunization campaign."

"It is, however, going to be a while before I stand here with an update like the pre-pandemic province we knew."

In September the province predicted it would end the year with a $12.8-billion deficit. 

Some sectors may not recover fully until pandemic is over

Real gross domestic product has improved compared to original forecasts, with a projected decline of 6.2 per cent in 2020 and partial economic recovery expected in 2021.

Provincial revenues were also not hit as hard as anticipated, with significant gains made in employment, retail sales and housing activity. 

Retail sales have surpassed pre-pandemic levels, and residential sales are expected to bring in over $500 million more in revenue than last projected.

However, some sectors — including transportation, accommodation and food services, information and culture — are not expected to recover fully until pandemic restrictions are lifted.

An unprecedented 400,000 jobs were lost in March and April, with women and young people hit the hardest. But Robinson said after seven months of consecutive growth, B.C. has the highest job recovery rate of Canada's four biggest provincial economies.

Data shows 359,100 jobs were regained between May and November.

B.C.'s unemployment rate is projected to average 9.3 per cent in 2021. Unemployment for people aged 15-24 still sits at 14.1 per cent, but is trending downward.

Robinson said projections are dependent on the speed at which widespread immunization can be achieved and the severity of COVID-19 outbreaks in the new year.

She said the government will table its budget on April 20 after legislation was passed on Wednesday night allowing the government to delay its introduction from the traditional date in February.

Documents released by the Ministry of Finance show that more than $10 billion has been spent by B.C. on measures related to COVID-19, including almost $2 billion in pandemic relief funds.

Legislation is expected to pass on Thursday that allows for payments of $1,000 to eligible families and $500 to individuals. Premier John Horgan promised to the pandemic recovery funding during October's election.