B.C. faces possible deficit of $12.5B due to COVID-19
VICTORIA -- British Columbia is facing a potential deficit of more than $12 billion due to significant revenue losses and increased spending amid the COVID-19 pandemic.
Finance Minister Carole James outlined the grim economic forecast for the province Tuesday, saying it could amount to "the worst downturn in our province in recent history."
The finance minister warned that the loss of economic activity, coupled with the government's COVID-19 relief spending, could put the province in the red to the tune of $12.5 billion for 2020-2021.
"The projected numbers are staggering, but they're not without hope," James said in a live address Tuesday morning, adding that the B.C. economy has a "strong foundation for recovery."
Unemployment in B.C. was at 13 per cent in June after falling slightly from 13.4 per cent in May, marking the highest rate of joblessness in B.C. since 1987.
Youth unemployment in June was "a staggering 29 per cent," James said, highlighting how the majority of jobs lost to COVID-19 have been in the retail, hospitality, construction, culture and recreation sectors.
The finance minister said the province's housing market is showing mixed signals, with home-building remaining resilient, while home sales fell more than 45 per cent between February and May.
The average house price in the province also fell by four per cent from February to May.
The government says more than 600,000 British Columbians have received a one-time $1,000 emergency benefit cheque for workers, while more than 81,000 people have been approved for temporary rent relief supplements.
The province says outside forecasters expect B.C.'s gross domestic product to decline by 5.4 per cent this year, an improvement over the 6.6 per cent decline forecasters predict for the rest of Canada.
James said the projected deficit will not bring cuts to government programs or services, and said the government is not looking to raise taxes to recoup the losses.