The strength of B.C.’s economy and the resilience of British Columbians has helped to keep provincial finances on more stable ground during one of the most challenging times in the province’s history.
As the provincial government responded to people’s need for income support, business grants, tax breaks and crucial services during the pandemic, British Columbia ended the 2020-21 fiscal year with continued strong credit ratings and a lower-than-projected deficit of $5.5 billion.
“We are on solid fiscal ground because British Columbians have done the right thing – protecting all of us by getting vaccinated and practising safe distancing throughout the pandemic,” said Selina Robinson, Minister of Finance. “People’s diligence around the provincial health officer’s guidance has meant we were able to keep much of our economy open. Strong recovery in many sectors has allowed us to shift from the broad-based support provided during the uncertainties of last year to a more targeted approach for those suffering the greatest effects as the pandemic progressed.”
The year-end deficit is $2.7 billion lower than projected in Budget 2021. This is attributed to some sectors of the economy faring better than worst-case scenarios, which resulted in lower-than-expected spending and higher-than-expected revenues.
Spending on COVID-19 support and recovery programs reached $10.1 billion by the end of March 2021.
Overall, the Province’s expenses increased by $8.6 billion over fiscal 2019-20, with increased investments in health, community supports, K- 12 education and social services. Revenue increased by $3.5 billion over revenues in 2019-20. Much of the higher revenues can be attributed to some sectors proving resilient during the pandemic, federal contributions for COVID-19 support and more savings and higher earnings at ICBC.
While a provincial deficit is expected for the next several years due to the severity of the pandemic’s impacts and the need to support people and businesses to seize the opportunities that recovery will offer, the ministry is forecasting declining deficits over the next three years.
Public Accounts 2020-21 show B.C. is in good financial standing, with affordable debt levels at the end of the fiscal year. British Columbia continues to lead the country in credit ratings from the major international ratings agencies.
Public Accounts on the previous fiscal year are a vital part of ensuring transparency and accountability within government’s finances. The next report on provincial finances will be the first quarterly report in September.
Written and released by BC Government