Finance Minister Katrine Conroy tables the budget as Premier David Eby looks on, at the legislature in Victoria, on Feb. 22.CHAD HIPOLITO/The Canadian Press
British Columbia’s predicted record-level deficit has ballooned further, new figures released by the province indicate, providing a backdrop to an election campaign in which B.C.’s business leaders are calling for parties to deliver a clear plan to revitalize the economy.
In releasing B.C.’s first quarterly financial report showing the deficit for the coming year has grown to nearly $9-billion – $1.1-billion higher than forecast – Finance Minister Katrine Conroy said now is not the time to balance the books.
“This would mean making cuts or increasing fees,” she said. “This would mean fewer teachers, nurses, schools and hospitals for people. It’s just not the right time.”
Ms. Conroy attributed the increase to lower corporate tax income revenue and ballooning wildfire response costs.
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At a news conference on Tuesday, business leaders said rising costs and increasing regulatory complexity have led to declining investment and stagnant private-sector job growth.
Fiona Famulak, president and chief executive officer of the BC Chamber of Commerce, cited recent survey data that showed around 40 per cent of British Columbians believe business opportunities have deteriorated over the last five years, compared with 14 per cent who believed they had improved.
Three-quarters of respondents at least somewhat agreed that the province should do more to lower the cost of doing business, and among those who own a business and are an employer, 64 per cent said they were more likely to move to another jurisdiction owing to investment uncertainty, she added.
“We have a sign on our provincial storefront that says to the world: British Columbia is closed for business,” Ms. Famulak said.
(The poll, commissioned by the BC Chamber of Commerce and conducted by Counsel Public Affairs by way of the Leger Opinion Panel, engaged more than 2,000 British Columbians 18 and older from Aug. 6-14. As an online survey, it was not assigned a margin of error.)
Michael Goehring, president and CEO of the Mining Association of B.C., said there are currently 17 critical mineral projects proposed in the province that include $36-billion in near-term investment, 302,000 person-years of employment and $11-billion in tax revenues during their construction phase alone. However, the longer it takes to review and approve projects, the more likely they will go to other regions, he said.
“It currently takes up to 12 to 15 years to permit and approve a mine in B.C.,” Mr. Goehring said, calling for the timeline to be halved. “It took only eight years to put a person on the moon.”
Other groups represented at the news conference were the Greater Vancouver Board of Trade, the Canadian Federation of Independent Business, the B.C. Council of Forest Industries, the B.C. Business Council and the Independent Contractors and Businesses Association.
The corporate leaders played a significant role in reshaping the political landscape before the October election. Chris Gardner, president of the Independent Contractors and Businesses Association, who appeared at Tuesday’s news conference, had earlier told The Globe and Mail that many of the owners of the 4,000-odd businesses in his group had been registering their displeasure about the prospect of BC United splitting the right-wing vote and withholding their donations accordingly.
In late August, BC United Leader Kevin Falcon threw his support to the rival Conservatives, ensuring there would only be one party on the right to challenge the governing New Democratic party.
On Tuesday, the business leaders called on leaders of both parties to complete a survey they had prepared to inform voters as they head to the polls. That survey includes questions on spending and deficits, climate, regulatory improvement, crime and safety and cost of living.
At a separate news conference, Ms. Conroy, the Finance Minister, said the province is forecasting consecutive deficit budgets for the next three years, including $8.979-billion for 2024-25, $6.7-billion next year and $6.1-billion for 2026-27.
She attributed this year’s increase to lower corporate income tax revenue, which is forecast to be $638-million lower than budget after the federal government updated its outlook of national corporate taxable income, and wildfire response costs, which are expected to amount to $886-million this year – $653-million higher than budgeted.
Debt servicing costs are forecast to be $344-million higher owing to a higher opening debt balance, higher interest rates and accelerated borrowing in the year, according to the province. While B.C.’s credit rating was downgraded this year – its third time in three years – the province could not attribute credit rating actions to interest costs directly.
The province’s budget forecasts decreases in health care and education spending in the next two years after adjusting for population growth and inflation – a budgeting practice that reduces the size of deficits in those years.
The NDP has said it will, as has been its past practice, boost spending in those areas once a new fiscal year begins.
Ms. Conroy said her government welcomed the feedback of the corporate leaders and would continue working to support businesses.