B.C. budget: $4.2B deficit forecast as province spends on health care, housing, affordability
The BC NDP government is spending amid an expected recession, with a projected surplus of $3.6 billion in 2022 and a deficit of $4.2 billion in fiscal 2023.
life of the economic plan from 2022 to 2025, Spending will increase by more than $13 billionmost of which has been allocated to areas that Prime Minister David Evey has designated as priorities such as health care, housing, affordability, public safety and a sustainable and clean economy.
In a presentation, Finance Minister Catherine Conroy said the three-year increase in spending included $6.4 billion in healthcare, $4.2 billion in housing and $1.3 billion in addressing affordability. .
New measures include:
- $3 billion in tax credits, including new income-tested tenant tax credit
- Free prescription contraception is estimated to cost $39 million in 2023.
- People with disability assistance receive an additional $125 monthly increase in shelter costs and an additional $100 monthly tax deduction.
- $230 million over three years to strengthen police
- $40 million program to help companies transition to vehicle electrification
This is Evey’s first budget as prime minister and Conroy’s first as treasury secretary.
tax credit
Despite all the spending, there are no new significant taxes. According to the law, the carbon tax will go up.
However, there are substantial tax deductions.
BC Family Benefit will be permanently increased by 10% starting July 1st. Single parents are also eligible for $500.
The long-promised renter’s rebate is now a renter’s tax credit and income is screened. Households with incomes below $60,000 receive the full amount, then partial amounts, and after $80,000 he drops to $0.
mental health and addiction
The state is investing $585 million over three years to expand treatment and recovery beds.
“We are making the largest investment in health and mental health in BC’s history,” said Conroy.
Conroy said charges have been removed for new treatment and recovery beds and will continue to be charged for current beds.
An additional $154 million is needed over three years to increase access to safer supplies and alternatives. More than $250 million will help build and operate complex care facilities.
2022 Budget Update
The 2022 budget year is expected to end in the black despite $4 billion in new spending. This includes funding already announced to help local governments build infrastructure and mitigate expected fare increases at BC Ferries.
Here are the amounts listed in the budget but not yet announced:
- $450 Million Significant Community Infrastructure Fund
- Food Security Initiative $160 million
- Next Generation 911 Preparedness Funds for Local Governments $150 Million
- Watershed Security Fund $100 million
- Highway and community cellular connectivity $85 million
- Accelerating funding for First Nations Agreement $75 million
- Public Libraries $45 million
In its final accounting update for 2022, the state projected a surplus of $5.7 billion. The Finance Minister said it had shrunk to $3.6 billion due to increased spending. These include BC Affordability Credits, BC Family Benefits and Rental Guarantee Fund.
Conroy said additional spending could change the surplus.
By law, surplus funds must be disbursed by the end of the fiscal year, March 31st.
Forecast beyond 2023
Governments are preparing for a fiscal slowdown while ensuring that what they call major investments are made.
Economic growth is expected to slow from 2.8% to 0.4% in 2023. Then GDP will rise to 1.5 he in 2024 and 2.4 in 2025.
After a deficit of $4.2 billion in 2023, it is projected to reach a deficit of $3.7 billion in 2024 and $3 billion in 2025.
