B.C. to provide financial update in mid-July on impact of coronavirus

The B.C. government will provide a financial update on July 14 as the province grapples with the economic impact of the COVID-19 crisis.

Finance Minister Carole James told reporters on Monday the province wants to wait until July to give an update in order to get another month of job and financial numbers.

“There is no question COVID-19 has had a huge impact on the budget and a huge impact on the economy in British Columbia,” James said. “There is no question we have been hit in every sector.”

The provincial budget tabled in February projected a surplus of $227 million in 2020-21, $179 million in 2021-22 and $374 million in 2022-23.

Those surpluses have been wiped out by the COVID-19 pandemic with no clear picture of how badly the province’s bottom line has been impacted.

The province has earmarked $5 billion for COVID-19 relief, including $1.5 billion for economic recovery.

Government ministers will still be expected to provide budget estimates as part of the new-look B.C. legislature.

“Each of the ministers who have programs will be accountable for those programs,” James said. “I will be talking about the broad dollars we have and how we have allocated them.”

The Business Council of British Columbia (BCBC) issued its latest B.C. Economic Review and Outlook, which shows the province’s economy slipping into a deep recession.

The business council is now forecasting a 7.8 per cent contraction in the province’s 2020 gross domestic product.

This is down from the “better case” scenario from March, which projected a 7.3 per cent decline, but the business council no longer believes the 10-per-cent to 12-per-cent contraction that was postulated under a “worse case” scenario is likely.

The organization is also concerned about B.C.’s workforce numbers. Since February, the number of people working in the province has plummeted by approximately 350,000, with 95 per cent of lost jobs in the private sector.

Young people have also been disproportionately affected by layoffs. Total employment is currently down 14 per cent since February, and the number of jobs for people aged 15 to 24 has plummeted by 34 per cent.

“As the shutdown is lifted, employment will rebound significantly,” BCBC Chief Economist and Vice President Ken Peacock said.

“But the process will be uneven and slow. Many businesses will not reopen, while others will pivot toward digital business models with more automation, and we expect that tens of thousands of jobs will be permanently lost. The recovery will be furthered hampered by partial reopenings, physical distancing rules that reduce demand and raise operating costs, and probable changes in consumer preferences and behaviour.”

The business council is also projecting the domestic economy will struggle to regain its footing and the B.C. export sector will be slammed by a steep global recession.

Weaker demand and commodity prices for most of the province’s key export products are weighing heavily on this year’s growth, but export prospects are expected to broadly improve next year.