BC Budget 2024 projects $7.9B deficit

B.C. is projecting a deficit of $7.9 billion in 2024/2025, as the provincial government focuses on spending to alleviate cost-of-living pressures, ahead of the next provincial election.

As she unveiled Budget 2024, Finance Minister Katrine Conroy said on Thursday, Feb. 22, the BC NDP is increasing funding for things like homes, health care, and a cleaner economy, with the goal of helping British Columbians navigate the challenges created by rising inflation.

“Projected deficits decline over the fiscal plan period from $7.9 billion in 2024/25 to $6.3 billion in 2026/27, and debt metrics are expected to increase but remain affordable,” the budget explains.

A deficit of $7.9 billion would be the highest ever in B.C.

The budget takes B.C.’s debt to almost $165 billion. When asked whether this was sustainable, Conroy said the province “has one of the most affordable debts in the country.”

Financial deficit over a deficit of services

“We feel very secure in moving forward with our budget,” the finance minister said.

“I say what would be reckless is to make cuts to people in this province. We cannot afford to have a deficit of services and there’s tough choices to be made. These are the choices that we made because we want to do what’s right for the people of British Columbia.”

Critics, including BC United, have suggested that the NDP has a “spending problem.” However, Conroy notes, per the forecast plan, B.C. is on a declining deficit over the next three years.

“Our goal is a balanced budget, but at this time, we know that we have to ensure we’re providing services to people,” she said.

Conroy also took aim at the opposition, saying BC United — formerly the BC Liberal Party — “cut services,” leaving the NDP to inherit “a deficit in services.”

Budget 2024 notes the provincial debt is projected to hit $103.8 billion by the end of the fiscal year. While this is $4.1 billion lower than what was projected in Budget 2023, it is $2.2 billion higher than the second quarter forecast.

Meanwhile, Conroy says the updated third quarter forecast for 2023/2024 projects a deficit of $5.9 billion in B.C. — $357 million higher than what was projected in the second quarter, last November.

She explains since Q2, there have been higher personal income tax and lower corporate income tax revenues, as well as lower revenues from natural resources. The projection also factors in lower Crown corporation net income, and higher spending on wildfires and other emergencies.

“Taxpayer-supported capital spending for the year is lower by $1.1 billion, and the forecast for the taxpayer-supported debt forecast is higher by $2.6 billion from the Second Quarterly Report due to the operating results and changes to cash and other working capital balances,” the budget explains.