B.C.’s projected deficit balloons amid record wildfire spending

The record-breaking wildfire season is taking a big bite out of B.C.’s finances, with the province’s projected deficit now $2.5 billion more than what was forecast in the 2023 fiscal budget.

The provincial government says it expects the deficit to hit $6.7 billion by year’s end.

“Given the scope of the season so far, it’s had a substantial impact on our forecast. Wildfire costs will be close to $1 billion — the highest ever,” Finance Minister Katrine Conroy said Wednesday.

B.C.’s wildfire costs expected to be $762M more than budgeted: Conroy

According to the BC Wildfire Service, there have been just over 2,200 wildfires across across the province since the season began on April 1. Almost 25,000 square kilometres of trees, bush, and grassland have been charred, making this B.C.’s worst-ever wildfire season, easily surpassing the previous record of 13,540 square kilometres burned in 2018.

Conroy notes wildfire costs are expected to be about $762 million higher than was outlined in the 2023 budget.

“And, again, we are seeing record wildfire response costs and we will spend what’s required to fight the fires and keep people safe,” she added.

In addition to wildfire spending, the province says lower natural gas revenue due to “volatile global” price and lower-than-expected income tax revenue are also having an effect on the bottom line. High interest rates, an ongoing global economic slowdown, and the high cost of living are also adding to pressures.

“B.C.’s economy is generally performing better than we expected at budget time. But there are also areas that we are watching closely where activity is slowing,” Conroy said.

Despite these challenges, the B.C. government says the province’s economy remains resilient, adding a “faster-than-expected economic recovery from the COVID-19 pandemic helped lay the foundation to weather the challenges ahead.”

“Supporting people and communities has made our economy stronger and better able to withstand challenges, and we will continue to have people’s back now and for the long term,” Conroy said, adding the government has no plans to change course on its agenda.

“Right now is not the right time to make cuts to people. Affordability is an issue. It’s not the right time to raise taxes and cut people’s services. The former government did that and we’re not going to do that.”

Read more: BC Budget 2023

In addition to a higher projected deficit, the province says the Q1 fiscal update shows there has been “lower taxpayer-supported debt this year.”

It is also pointing to what it describes as a “better-than-expected performance” in housing starts, with new construction up 15.5 per cent year-to-date to August. Meanwhile, the province says the unemployment rate continues to be lower than the national average.

“British Columbia has among the best credit ratings of all provinces and one of the lowest debt-to-GDP ratios in the country, which translates into low debt servicing costs for B.C.,” the B.C. government explained.

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