Skip to content
Join our Newsletter

Sombre fiscal update foretells gloomy outlook

The release Monday of the provincial financial results for 2019-20 feels from more like 2008-09, when the wheels were coming off the economy—the difference then being, the wheels later were reattached. We can take in the conclusion of the B.C.
kirk_lapointe_new

The release Monday of the provincial financial results for 2019-20 feels from more like 2008-09, when the wheels were coming off the economy—the difference then being, the wheels later were reattached.

We can take in the conclusion of the B.C. Finance Minister, Carole James, about a $321 million deficit in the fiscal year ending March 31—a $548 million swing from the projected surplus—and realize it is not a conclusion. It is but the starting line of that miserable marathon in which we inevitably hit the wall.

The results Monday tallied only the first few days as the pandemic struck the economy with Category 5 force, razing most everything in the path: income tax revenue, property tax revenue, and the performance of the Insurance Corp. of British Columbia (ICBC). Health costs rose, deferrals took hold, and the bright future was made murky overnight.

What James portrayed Monday was the closing of one book of business as another book lay open with a new narrative. The plot line is largely improvisational and the ending is anyone’s guess. To propose a reliable budget in these circumstances is to validate sheer speculation or bank on a Ouija board.

We will get the new outlook in a few weeks when James presents first-quarter results and an economic recovery plan, and the latest forecast for a $13.5 billion deficit in 2020-21 is day by day looking more optimistic than not.

For the time being, B.C. is officially hoping against the evidence that the U.S. economy will continue to roll, that the inept response to the pandemic there won’t eventually generate an inert consumer demand. But it must see the madness stateside like all of us are seeing and wonder just how long confidence can continue in the mecca of the almighty dollar. 

It must see the particular impact on tourism and hospitality and wonder what kind of protracted hole will be carved out of the provincial coffers. 

And it must see that the needs of business to recover will be much, much, much larger than the $1.5 billion so far earmarked. Yes, the federal government will lead the way with the recovery blueprint, but the province cannot be socially distant.

The advice from the triumvirate of business groups—the Business Council of British Columbia, the B.C. Chamber of Commerce and the Greater Vancouver Board of Trade—all point to a substantial need for stimulus and a step back from a revenue grab in order to reset a climate of competitiveness.

And the signals from Ottawa are of imminent programs to accelerate the green economy, something the province will want to join, not fight. The pen will move toward the cheque for that.

Moreover, the pandemic is teaching us some pretty clear lessons about the connections between childcare, education and workplace participation, and the ancillary effects on our physical and mental health—and, of course, our prosperity.

One of James’ challenges is to determine just how much the province can expend in better infrastructure for daycare and the school system in the face of faltering revenue. The pandemic is an inflection point for both needs, and it feels certain that teachers are not done expressing their concerns about returning to classes in the days ahead.

There are, too, the twin perils of the opioid and housing crises, and in both cases there is a helplessness about the application of effort to the mission.

An election federally doesn’t feel in the cards. The NDP doesn’t appear ready to join the Conservatives and Bloc Québécois to send Justin Trudeau to see Julie Payette to start the campaign. 

But a provincial call this fall or early in the new year? A little more likely. The worst of the economic results will be tumbling in by spring. A mandate soon for a recovery plan is a better political platform for a four-year term than a defence in late 2021 of an economy that has not rebounded. 

Kirk LaPointe is publisher and editor-in-chief of BIV and vice-president, editorial, of Glacier Media.