British Columbia’s deficit has increased by $429 million, now totaling $9.4 billion, as revealed in the latest fiscal update.
British Columbia: The province’s financial outlook isn’t looking great. The latest update shows a record deficit of $9.4 billion, which is up by $429 million from before.
This update is the first one from the new Finance Minister, Brenda Bailey. She mentioned that B.C.’s debt is expected to hit $130 billion by the end of the fiscal year, which is a bit higher than what was predicted back in September.
Bailey also shared that the province is looking at a modest economic growth of 0.9% for 2024, with a slight bump to 1.9% the following year. But there are some clouds on the horizon, like potential tariffs from the incoming U.S. president.
She emphasized that the NDP government plans to tackle this deficit carefully, focusing on growing the economy instead of slashing services. They have a hefty $13.2 billion earmarked for infrastructure this year.
Back in September, before the election, the previous finance minister had already warned of a record $8.9 billion deficit, mainly due to lower corporate taxes and costs from wildfires.
Looking ahead, the NDP’s election platform projected next year’s deficit could rise to $9.6 billion, driven by promises like a grocery rebate and tax cuts for middle-class families.
Premier David Eby mentioned that these campaign promises were made to help as many people as possible with affordability issues.
In her last update, Conroy noted that while economic growth is expected to improve over the next few years, it would be up to her successor to figure out when the budget could be balanced again.
Recently, the province announced a temporary hiring freeze for the public service, except for critical roles, due to the tight fiscal situation.
In April, S&P Global Ratings downgraded B.C.’s credit score, citing high government spending and the risk of large deficits. This was the third downgrade since 2021.
While Moody’s kept B.C.’s AAA rating, they did change their outlook to negative, indicating that the province’s financial path could lead to more challenges ahead.
This report was first published by The Canadian Press on December 17, 2024.
Chuck Chiang, The Canadian Press
