Tuesday December 17, 2024 | VICTORIA, BC [Posted at 1:45 pm | Updated 1:58 pm]
by Mary P Brooke | Island Social Trends
Today BC Finance Minister Brenda Bailey delivered a Fall Economic Update to Budget 2024-2025.
The deficit has grown by $429 million to $9.4 billion. This is primarily driven by population growth, lower consumer spending, “statutory requirements”, natural gas royalties (for First Nations agreements), and overall higher net spending (much of that for the work of the health authorities).
Wildfire management costs are down this year mainly due to less severe weather conditions, Baiiley told media today.
She noted that population growth increased 3% in July 2024 due primarily to international immigration.
The finance minister is pleased with inflation being lower at 2.4% in October. She says the five interest rate drops by the Bank of Canada this year are “welcome news” as that is “likely to stimulate the economy”.
Bailey says it “states the obvious” to say that US trade policy poses a risk for the BC economy”.
The door is closed to external hiring, as part of a “temporary hiring freeze”. Bailey said: “We are not hiring external people into the public service at this time.”
Housing starts were down this year by 11% compared to last year, but last year was the highest year ever for housing starts in BC. This year’s housing starts are the fourth-highest in BC history, said Bailey.
“You can’t pour from an empty cup,” said Bailey regarding her ‘optimism’ about growing BC’s productivity and economic strength.
An all-Canada response to these justified tariffs is important, the Finance Minister said today. “We almost have to have two versions of the world as we move forward,” she said. That will be shown in the 2025 budget, said Bailey today. She recently met with all the finance ministers of Canada’s provinces and territories.
Exports are expected to rise in 2025 with the anticipated production of liquefied natural gas (LNG) by LNG Canada by mid-2025.
ICBC has had “better than expected results” from their investments in this fiscal year.
“Ministries all have the same temporary hiring freeze. I’ve had the opportunity to present to the cabinet colleagues as to economic circumstances,” said Bailey.
“We need to focus on economic and financial sustainability. But we are not going to balance the budget by transferring costs onto people,” said Bailey, saying that this is the approach set by BC Premier David Eby.
Opposition remarks:
BC Conservative finance critic Peter Milobar says in a news statement today that “voters deserved to know how bad it’s gotten in British Columbia – before the election”.
NEWS RELEASE: B.C. focuses on supporting people, economy (Dec 17, 2024)
As global and national pressures persist, B.C. is expecting modest economic growth this year and next year.
Interest rates and high prices continue to affect economic activity, particularly consumer spending and exports, according to B.C.’s latest fiscal report. However, job and population growth remained relatively strong. B.C. led the country in GDP growth in 2023 and is projected to see 0.9% real GDP growth in 2024, followed by growth of 1.9% in 2025 as interest rates and inflation ease.
“B.C. is a great place to live, but high costs are taking too big a bite out of people’s paycheques,” said Brenda Bailey, Minister of Finance. “We are going to keep supporting people with targeted investments – helping families with everyday costs, delivering more homes faster, strengthening health-care services and building an economy that works for everyone.”
B.C. continues to have one of the lowest debt-to-GDP ratios among Canadian provinces and remains the only province with a triple-A rating from a credit-rating agency.
“As we work to expand our diverse economy, we know we’re facing increased uncertainty with the threat of unjust tariffs on goods going into the U.S.,” Bailey said. “We will continue to reinforce our message to our American trading partners about how integrated our fates are in terms of jobs, opportunities and economic prosperity on both sides of the border. These unjustified tariffs would benefit no one.”
B.C.’s updated projection shows a 2024-25 deficit of $9.4 billion, $429 million more than the first-quarter forecast, mainly due to lower revenues.
“We’ve started work on a plan to reduce the deficit over time, not by putting costs onto people, and not with service cuts,” Bailey said. “We’ll do it by being careful with our budget and by growing our economy so we can pay for the services, for the infrastructure and the supports people need to get ahead and build a good life in B.C.”
B.C. will invest a projected $13.2 billion on infrastructure in the fiscal year, with four new major projects added to the report since the first quarter.
In January 2025, the minister will meet with the independent Economic Forecast Council to discuss B.C.’s economic outlook ahead of Budget 2025. The third quarterly report will be released alongside the budget on March 4, 2025.
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