British Columbia’s economy is bouncing back more quickly than expected from COVID-19, though pandemic uncertainty lingers.
In its first quarterly update of 2021-22, the province on Monday projected a $4.8-billion deficit, or roughly half of what was predicted in Budget 2021.
The province’s April budget forecasted a $9.7-billion deficit for the fiscal year.
The better-than-expected recovery includes increases to personal and corporate income-tax revenues, natural resource revenues, and federal funding largely related to B.C.’s pandemic response and recovery measures, as well as child care.
The province’s expenses went up by $1.4 billion — half of these due to costs fighting wildfires.
The tourism sector is still struggling, seeing a jump in revenue due to domestic tourism through the summer, but still well behind pre-pandemic levels.
There also continues to be uncertainty due to a pandemic that still has no end in sight. The forecast allowance will remain unchanged in the provincial budget.
“We’ve seen significant shifts in projections for B.C., Canada and around the world as the pandemic evolves, and we know we will see more changes as we move through recovery,” Finance Minister Selena Robinson said.
The province has allocated $3.25 billion in pandemic and recovery contingencies to address health and safety measures, targeted supports for businesses and people most affected by the pandemic, and additional funding to continued economic recovery efforts.
The government is still planning to detail a path and timeline of how it intends to return to balance as part of Budget 2022.
B.C.’s real gross domestic product is forecast to grow by 6.0 per cent in 2021 and 4.0 per cent in 2022.
The labour market has shown signs of continued improvement, and total employment has surpassed pre-pandemic levels.
B.C.’s unemployment rate for August was 6.2 per cent, compared to the national average of 7.1 per cent.