B.C.’s surplus vanishes due to pandemic

VICTORIA — The first few weeks of the COVID-19 pandemic pushed B.C.’s last fiscal year into into a $321 million deficit, according to new provincial figures.

Finance Minister Carole James said the start of the pandemic in March caused government to lose $397 million in personal income tax, $171 million in property tax and $298 million at the Insurance Corp. of B.C. before the 2019-20 fiscal year ended March 31.

The heavy losses were due to the closure of businesses and schools, and the layoffs of hundreds of thousands of people, as the pandemic accelerated in early March.

That meant B.C.’s budget surplus, estimated in February 2019 to be $274 million, vanished as it was hit by almost $600 million in losses in just a few weeks.

“Nobody could have imagined the impact of COVID, arriving late in the fiscal year, which exceeded our prudence and had an impact on our financial results,” said James.

The province also increased spending by health authorities by $35 million at the onset of the pandemic, said James.

The figures, part of B.C.’s public accounts released Monday, show only part of the impact of COVID-19 on the provincial treasury.

The report is the year-end accounting of the last fiscal year, running from April 1, 2019 to March 31, 2020.

Most of the impact of COVID-19 will be felt by the province in the current fiscal year, running April 1, 2020 to March 31, 2021. James has already projected a $13.5 billion deficit for that year.

James said prior to COVID-19 B.C. was seeing higher than expected economic growth. However, the pandemic now represents the worst economic crisis in the province’s history.

B.C.’s next financial update, on its first quarter with COVID-19, will be released next month and the province’s plan to spend $1.5 billion on economic recovery is also due for release in the next few weeks, said James.