VICTORIA – The Fall 2020 Economic and Fiscal Update confirms the forecasted provincial deficit at $13.6 billion, which includes an additional $2 billion for new COVID-19 supports for British Columbians through B.C.’s Recovery Benefit and Recovery Supplement.

The Province’s third economic and fiscal update of 2020 continues to show the economic impacts of COVID-19 on people, businesses and communities, while 2021 brings hope to British Columbians with a path toward recovery.

“2020 has been a tough year for families, communities and our economy. I am encouraged by the economic improvement we’re seeing, but I know not everyone has been similarly affected,” said Selina Robinson, Minister of Finance. “We will continue to support people and businesses through this pandemic and into a brighter year with the first vaccinations already arriving in B.C.”

The update also shows a lower impact on provincial revenues than projected in the First Quarterly Report, with gains in income, property transfer taxes and Crown corporation net incomes. Partial economic recovery is predicted for B.C. in 2021, and the report shows continued areas of economic improvement in employment, retail sales and housing activity.

“The impacts of COVID-19 have been experienced right around the globe, and it’s going to be a while before a fiscal update for B.C. resembles anything like the pre-pandemic province we knew,” Robinson said. “We are continuing to support British Columbians through this pandemic, and we are making targeted investments like grant and tax relief programs for businesses.”

The economic and fiscal update shows both a story of continued fiscal prudence and one of the most supportive and comprehensive COVID-19 responses in Canada. It details over $10 billion in COVID-19 response measures that have supported people, businesses and communities since the beginning of the fiscal year.

The Province acted immediately during the pandemic to develop a COVID-19 Action Plan that included supports such as workers benefits, rent supplements, income and disability assistance supports, and economic recovery funding. In September 2020, StrongerBC laid out focused investments to see people and businesses through the pandemic and into economic recovery.

Learn More:

To read B.C.’s Fall 2020 Economic and Fiscal Update, visit: https://www2.gov.bc.ca/gov/content/governments/finances/reports/quarterly-reports

For information about BC’s Restart Plan, visit: http://gov.bc.ca/restartbc

To learn more about the supports and services available for people, businesses and communities through the pandemic, visit: http://www.gov.bc.ca/covid19

For the latest medical updates, including case counts, prevention, risks and testing, visit: http://www.bccdc.ca/
Or follow the BCCDC on Twitter @CDCofBC

For the provincial health officer's orders, notices and guidance, visit: http://www.gov.bc.ca/phoguidance

For non-health related information, including travel, transportation and essential service information, call (toll-free) 1 888 COVID19 (1 888 268-4319) between 7:30 a.m. and 8 p.m. (Pacific time), seven days a week, or visit: http://www.gov.bc.ca/phoguidance

A backgrounder follows.

The Fall 2020 Economic and Fiscal Update is the Province’s third report highlighting the economic impacts of COVID-19 in B.C. The improved economic outlook from September’s First Quarterly Report includes improvements in employment, retail sales and housing activity.

The Province is forecast to end the fiscal year with a deficit of $13.6 billion, $851 million higher than September’s projection mainly because of continued COVID-19 response measures for people and businesses.

Economic highlights:

• B.C.’s real gross domestic product (GDP) is forecast to decline by 6.2% in 2020, before increasing by 3.0% in 2021.
• After experiencing substantial job losses in March and April, the B.C. labour market has been improving.
• B.C.’s total employment is up to 98.5% of pre-pandemic levels. This is the highest job recovery rate of any of Canada’s four largest provinces.
• B.C.’s unemployment rate for November was 7.1%, up from 5.0% in February.
• Retail sales had their largest monthly decline on record in April. However, retail sales rebounded as restrictions began to ease in May and have now surpassed pre-pandemic levels.
• Retail sales were 0.6% lower in the January to September period of this year, compared to the same period of last year.
• Housing market activity has been resilient despite the pandemic, and B.C. home sales increased by 18.2% in the January to November 2020 period, compared to the same period last year.
• An average of six private-sector forecasters expect B.C. real GDP to decline by 5.2% in 2020 and grow by 4.5% in 2021 – better than the expected decline of 5.7% on average across Canada for 2020 and similar to the 4.5% growth expected nationally for 2021.

Operating results:

• To date, the Province has invested over $10 billion in relief and recovery measures to support British Columbians, businesses and communities through the pandemic. This includes an estimated:
  • $5 billion in supplementary estimates as part of the initial B.C. COVID-19 Action Plan in March;
  • $810 million in provincial contributions toward federal and provincial cost-shared restart initiatives for transit and municipalities;
  • $2 billion for priority pandemic response initiatives such as the B.C. Recovery Benefit;
  • $760 million in COVID-19 related statutory spending; and
  • more than $1.5 billion in other tax and revenue measures.
• Compared to B.C.’s First Quarterly Report, revenue is forecast to be $1.4 billion higher and expenses are projected to be $2.3 billion higher.
• Revenue for 2020 is forecast to be $57 billion and expenses are forecast to be $70 billion, with a forecast allowance of $1 billion.
• Budget 2020 forecasted an operating surplus of $227 million and the Fall 2020 Update projects an operating deficit of $13.6 billion, including a $700 million increase to the forecast allowance.

Capital spending:

• Total capital spending is projected to be $10.1 billion and includes new investments to sustain and expand provincial infrastructure including schools, post-secondary facilities, housing, transit, roads, bridges and hospitals.
• The projected spending is $389 million lower than forecasted in Budget 2020, due to project timing changes.
• Capital projects are proceeding, and the construction industry continues to deliver the Province’s historic capital plan.

Debt levels:

• Governments, like the private sector, borrow to finance the building of long-lasting capital infrastructure, such as schools, hospitals and highways. In recent years, B.C. has had among the best debt metrics and credit rating compared to other Canadian provinces.
• Taxpayer-supported debt levels are projected to reach $60.5 billion by the end of the fiscal year - $744 million higher than forecasted in the First Quarterly Report.
• The projected taxpayer-supported debt-to-GDP ratio is unchanged since the First Quarterly Report at 20.8% in 2020-21, up from the Budget 2020 forecast of 15.5%.
• Despite a significant increase in borrowing in 2020 and higher debt levels, B.C. will benefit from low interest rates partially due to the Province’s triple-A credit rating.
• As a result, the Province’s debt remains affordable.