Five key points from BC's 2022 budget - The Globe and Mail

The fallout from a particularly bad 2021 was illustrated throughout the budget that British Columbia introduced on Tuesday. Last year was the first full year of the pandemic, but starting in the summer, the province was also beset by unprecedented climate disasters in the form of heat, fire and floods. Add on the worst year on record for deaths from opioid overdoses, and Finance Minister Selina Robinson was forced to react in her budget.

Five take-aways from the newest three-year plan:

Recovery

The deadly heat wave of last July killed about 600 people, and the catastrophic floods of November forced thousands from their homes, with many still living in temporary accommodation.

The federal government has pledged its largest aid package ever: $5-billion to British Columbia, but it’s unclear when the money will arrive.

From 2021 to 2024, B.C. will add in another $2.1-billion, although not all that money is devoted to recovering what has been lost. Just under half – $925-million – will flow this year. Most of that – $800-million – will be for flood recovery.

It’s a start on what’s expected to be a massive bill. A Globe and Mail analysis concluded the costs of the damage to highways, municipal infrastructure, personal and agriculture properties could amount to just under $9-billion and could actually tally much higher.

This year’s budget document, however, avoided specifics on where the money needs to go.

“The total cost and necessary supports are not yet known as work to evaluate the damage is still ongoing,” it states.

Health

Spending on health care will increase by $1.5-billion over the next year, rising by $3.2-billion by the end of the three-year plan. The plan includes money to address the backlogs for surgery and diagnostic imaging caused by the pandemic.

About $148-million will be devoted to adding more paramedics and dispatchers to reduce the wait and response times for emergency calls. The problem came into sharp relief last year, when it took hours for paramedics to respond to a deluge of calls during the heat dome.

There will be $875-million in this fiscal year to cover COVID-19 vaccination and influenza programs, personal protective equipment for health care workers and enhanced measures in long-term care and assisted living facilities.

As well, the battle against the opioid crisis will get a $10-million increase over three years so more staff can be hired to expand services. The safe supply program, which critics say has rolled out too slowly, will benefit from those extra staffing resources, Ms. Robinson said at a news conference.

Housing

Residential construction reached record highs last year, in volumes of sales, housing starts and prices, with the number of home sales increasing by 32.8 per cent in 2021 compared with 2020. Prices went up by 18.7 per cent over the previous year, and housing starts increased by 25.6 per cent in 2021, to a record high of more than 47,000 units.

In the next three years, B.C. will devote a further $166-million to what it calls the “largest affordable housing investment in B.C. history,” a previously announced plan to build 114,000 affordable homes over 10 years.

But the revenue the government projects from the property transfer tax – $2.5-billion in this coming year – indicates it expects the windfall from B.C.’s hot housing market to continue. That would make it a prime revenue generator. By comparison, royalties from natural gas and taxes levied on the forestry and natural resources sector are expected to return a combined $3.3-billion.

Child care

The government is still inching toward its 2017 election campaign commitment to provide $10-a-day child care. Programs are being moved into the education system, treating child care as a core service “available to any family that wants it, when they need it, at a price they can afford,” Ms. Robinson said.

The province has created 26,000 new spaces for child care and says “thousands” of families are paying less since the NDP took power in 2017.

Within seven years, the budget promises another 40,000 spaces. Rates will be reduced over time as well: “We are going to lower the average fees for preschool and before- and after-school care to less than $20 a day for the 2023-2024 school year.”

Debt, deficit and the economic outlook

Gone are the days when a plan to reach a balanced budget was the gold standard in a provincial budget. The numbers this year reveal wildly fluctuating economic conditions.

A year ago, B.C.’s deficit for 2021-22 was forecast to be $9.7-billion, but that’s come down dramatically and the shortfall is now expected to tally only $483-million.

“This decrease is mainly because of higher revenues, including significant one-time revenues and federal transfers, as well as higher natural resource and tax revenues as a result of stronger economic growth,” the budget document states.

The deficit for 2022-23 is projected to be $5.5-billion, declining to $3.2-billion by 2024-25.

Ms. Robinson did not indicate when B.C. might balance its budget.

Debt is expected to increase to $90.8-billion by the end of the three-year plan. The taxpayer-supported debt-to-GDP ratio is below 25 per cent this year, and is projected to reach 22.8 per cent by 2024.

The budget document maintains the debt remains affordable owing to low interest rates and the province’s excellent credit rating.

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Five key points from BC's 2022 budget - The Globe and Mail
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