The B.C. government will go deep into the red again this year as it ramps up spending on health, seniors and businesses to help people survive the COVID-19 pandemic while laying the groundwork for economic recovery.
Finance Minister Selina Robinson, delivering her first budget speech as a third wave of the virus swept across the province, pledged to leave no one behind as her government bolsters services that people depend on most.
“From day one, our government has had people’s backs,” she said. “That will never change. We will continue to protect people’s health and livelihoods until the pandemic has passed.”
The government now expects the past year’s deficit to come in at $8.1 billion instead of the previous forecast of $13.6 billion. That’s largely due to higher-than-anticipated revenues, lower spending and the improved performance of ICBC and other agencies, Robinson said.
Still, the government expects to run an even higher deficit of $9.7 billion in the coming year before the fiscal picture begins to improve. It’s unclear when the province will return to balanced budgets.
“Preliminary Ministry of Finance analysis suggests that this can happen in seven to nine years, which is consistent with timelines presented by other provinces’ budget 2021 projections,” Robinson told reporters.
“But I must stress that there is significant uncertainty.”
In the meantime, she said, the government’s top priority is protecting people’s health and it plans to spend $3.1 billion over the next three years to strengthen long-term and home care for seniors, accelerate surgeries, and expand the number of urgent and primary care centres.
There will be renewed focus on mental health and addictions, with more money for school programs and an increase from 11 to 23 in the number of Foundry centres, where young people receive health and wellness supports in their communities.
In addition, $900 million in new money will pay for COVID-19 testing, contact tracing, personal protective equipment and the rollout of vaccines.
Robinson said the government will continue to support businesses through recovery grants for small- and medium-sized business, and provide $120 million for the tourism sector.
“This includes funding our community tourism infrastructure, supports for anchor attractions that bring tourists to British Columbia, and marketing our province to domestic and international markets once it is safe to welcome visitors back,” she said.
Despite that, Walt Judas, chief executive of the Tourism Industry Association of B.C., said the picture remains “very grim” for the sector, given already heavy losses.
“The amount allocated today to help tourism will not be enough to save some businesses,” he said, adding that his organization will continue to advocate for more support.
Other budget highlights include:
• A new PST exemption on electric bikes that will cost about $7 million a year.
• Free public transit for children 12 and under, which is expected to save families up to $672 a year per child beginning in September. The City of Victoria already provides free transit for youth 18 and under.
• Expanded child-care options that will double the number of $10-a-day spaces, while boosting wage enhancements to $4 an hour for 11,000 early childhood educators.
• Help for 80,000 low-income seniors by increasing the seniors’ supplement by $50 for the first time since it was introduced in 1987.
• A $175-a-month increase to income- and disability-assistance rates
• A total of $265 million this year to continue supporting 3,000 temporary shelters and hotel spaces for people without homes and 650 urgent shelter spaces.
• More than $290 million over three years to support reconciliation with Indigenous peoples, including money for skills training and child care as well as for engaging on legislation, policy and programs.
The government also increased its budget for building roads, schools and bridges by $3.5 billion to $26.4 billion over the next three years and expects that capital spending will create more than 85,000 jobs.
Robinson said the rollout of vaccines and the province’s stronger-than-expected performance in 2020 have improved the economic outlook. It’s projected that B.C.’s economy will grow by 4.4 per cent in 2021 after contracting by 5.3 per cent in 2020.
The B.C. Federation of Labour welcomed the budget’s investments in health and child care, but expressed disappointment that it failed to ensure paid sick days for workers so they don’t have to choose between staying at home when ill and paying the bills.
“In this time of deadly variants and rising cases, ensuring worker safety with paid sick leave is imperative,” president Laird Cronk said in a statement. “Paid sick leave saves lives. We will continue to advocate for the over half of B.C. workers, and nearly 90% of low-wage workers, that don’t have paid leave and are at higher risk of exposure.”
Business groups voiced concerns, as well.
Samantha Howard, director of the Canadian Federation of Independent Business in B.C., said her members had been hoping for more of a focus on the economy.
“I don’t know that we really see that,” she said. “We have seen that they are extending and keeping their commitment to maintaining programs that were announced in the fall, but we didn’t really see — other than tourism money — any new funding.”
Iglika Ivanova, a senior economist with the Canadian Centre for Policy Alternatives, described the budget as “surprisingly status quo” and said the government missed an opportunity.
“I would have liked to see a lot more ongoing investment in speeding up some of those programs on affordable housing, on child care and on addressing the urgent climate emergency,” she said. “But that wasn’t in the budget.”
Victoria Mayor Lisa Helps welcomed the ongoing support for housing and “historic investments” in mental health. She was also glad to see the NDP pick up the idea of free transit for youth — something her city began providing in late 2019.
“It’s great to see the province doing that for 12 and unders and we’ll continue to do 13 to 18 years here,” she said. “It’s the kind of feature that we want. We want bus-riding citizens in British Columbia … and the provincial budget today sets that in motion.”
— With a file from Carla Wilson