Government of BC forecasts all-time record budget deficit of $7.9 billion

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The provincial government of British Columbia will be running in the red territory with its finances for the foreseeable future.

BC Ministry of Finance Katrine Conway’s 2024 budget announcement shows the provincial government is forecasting a $7.91 billion deficit for the 2024/2025 fiscal year — an all-time record high for this province.

This deficit, representing the BC NDP’s eighth budget, is higher than the fiscal years that spanned the peak of the pandemic impacts.

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It is also up from $5.91 billion in 2023/2024, and it would represent the peak of a deficit cycle, with Conway noting that the current forecast is for an incremental falling deficit trend to $7.77 billion in 2025/2026 and $6.29 billion in 2026/2027.

For the 2022/2023 fiscal year, the provincial government at one point expected a $5.5 billion surplus driven by new changes in the federal government’s personal and corporate income tax results, but this figure was later revised to the previous forecast of $700 million after the rollout of major new last-minute spending measures, such as the one-time $1 billion Growing Communities Fund for municipal and regional governments.

“Some look at the challenges ahead and say the government should respond with deep cuts, leaving people to fend for themselves. This would only weaken the services we all rely on and drive up costs with added fees and fares,” said Conway during her budget speech today.

“It would leave people at risk to those who take unfair advantage by putting profits ahead of people. We see this in the current housing crisis.”

Although new spending measures were outlined in the budget announcement, they may not reflect the full suite of initiatives and projects as part of the BC NDP’s forthcoming campaign promises ahead of the general provincial election later in 2024.

The taxpayer-supported debt-to-revenue ratio will climb from 95% in 2023/2024 to 112% in 2024/2025 before escalating further to 136% in 2025/2026 and 151% in 2026/2027. Over the same period, the taxpayer-supported debt-to-GDP ratio will grow from 17.6% in 2023/2024 to 27.5% in 2026/2027.

In real values, the taxpayer-supported debt per person will grow from $8,540 in 2016/2017 — just before the BC NDP became the governing party — to $21,542 in 2026/2027.

“Some would choose to cut services and raise fees. But our government won’t leave people behind to fend for themselves. We have your back,” continued Conroy.

The 2024 budget includes the introduction of new additional Property Transfer Tax exemptions, a one-time increase to the BC Family Benefit payments, a new exemption threshold for the BC Employer Health Tax, a new BC affordability electricity bill credit, and various housing supply measures, especially the new BC Builds strategy.

In reaction to today’s budget announcement, BC United party leader Kevin Falcon says this is a decision to “maintain a status quo that is simply not working for people across this province.

“As British Columbians struggle to put food on the table and pay rent every month, David Eby’s NDP government has introduced a budget that spends more money than ever before while failing to improve life for everyday people. After seven years of NDP government, life in BC is less affordable and less safe than ever. All I see in this budget is more of the same tax-and-spend approach that has never delivered results,” continued Falcon.

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