BC Government Debt Could be Countered by Infrastructure and Workforce Investments Says Surrey Board of Trade

A BC Election is taking place at the time of composing this newspaper. No matter what the outcome, whoever forms government will have to tackle the financial challenges presented by the pandemic and the responsibility to support businesses and British Columbians.

In July, BC’S outgoing Finance Minister provided a provincial deficit snapshot. This operating deficit was estimated to be $12.524 billion CAD as a result of reduced revenues due to the economic shut down and stimulus spending via the BC Temporary Rental Supplement (BC-TRS) Program, BC Emergency Benefit for Workers, child care for essential service workers, provincial payment deferrals of the employer health tax until September 2020, among many others.

“Many jobs that Canadians held are not coming back including travel, retail, restaurants, and other small businesses. It is time we pivot and commit to infrastructure – transportation, energy, resources – and workforce investments, collaborating with educational institutions across the province to instigate economic activity,” said Anita Huberman, CEO of the Surrey Board of Trade. “Many industries such as manufacturing, technology, and health have indicated a skills gap for years, and it is time for structured, sustainable, and ongoing investment into upskilling and reskilling.”

“When examining the overall debt-to-gdp ratio, we are on par or better off than many other provinces affected by the pandemic (ranked fourth). Government has been doing a phenomenal job of protecting and providing for British Columbians. There needs to be a path forward – forecasting, moving forward and moving on is necessary.”

BC’S most likely economic scenario:

Under this scenario, the taxpayer-supported debt level (which excludes the debt of commercial Crown corporations) is $61.9 billion at the end of 2020/21. The projection in Budget 2020 was $49.2 billion at the end of 2020/21. Flowing from the changes to debt levels, the taxpayer-supported debt-to-gdp ratio increases in 2020/21 under this scenario to 22%. This increase from 15.5% forecast in Budget 2020 is due to higher debt levels and lower GDP assumed under the scenario. Highlights of the snapshot included: