A faster-than-expected economic recovery following the COVID pandemic delivered the province a healthy $1.3-billion surplus for the 2021-22 fiscal year, according to the government’s public accounts released Tuesday.
Finance Minister Selina Robinson said more tax revenue thanks to a booming post-pandemic economy, a one-time boost from the federal government for COVID and natural disasters, higher natural resource revenues, and higher profits from Crown corporations such as ICBC and B.C. Lottery Corp. helped the province get back in the black following a $9.7-billion deficit projected in the 2021 budget.
That budget, released in April 2021 and the first since the start of the pandemic, came at a time when COVID vaccines were not widely available, gatherings were still limited, and public health orders were still causing major uncertainties for businesses. It was also before global inflation and the war in Ukraine sent gas and food prices soaring.
Given those circumstances, Robinson said, “fiscal responsibility meant forecasting for the worst and striving for the best when it comes to protecting people’s health and livelihoods while building a bridge to economic recovery.”
The government brought in $13.5 billion in revenue, half of which can be attributed to taxes like the PST, income taxes and the property transfer tax boosted by soaring house prices.
The surplus, Robinson said, shows the NDP government made the right call by making “unprecedented investments” to help British Columbians recover from the pandemic.
“While others might have chosen cuts and austerity, our investments in people have helped our economy rebound faster than anyone in the public or private sector predicted,” Robinson said.
B.C. Green party leader Sonia Furstenau said as the government rakes in money from taxes, it is “failing to deliver on its most basic duties.”
With so many crises in the province right now — chief among them the health-care crisis which has seen a shortage of paramedics, nurses and family doctors — “this is not a time for the government to be patting itself on the back for a surplus,” she said.
Peter Milobar, the B.C. Liberal finance critic, said if the government knew it was heading for a surplus for fiscal 2021-22, it should have acted sooner on inflation-relief measures such as giving low- and middle-income families a boost to their climate action tax credit, or temporarily suspending the gas tax during the summer when fuel was at an all-time high.
“It’s disappointing to see that over the last several months the government ought to have known they would have had some fiscal capabilities to be helping people,” Milobar said. “What has become very clear is that inflation is very good for government and very expensive for individual homeowners.”
Robinson is expected to announce next week new measures to support people struggling with higher costs due to inflation, which Premier John Horgan has said will include a rebate and more money back through the climate action tax credit, which are quarterly payments issued to British Columbians based on their income.
Asked why the government didn’t announce inflation relief sooner given the surplus, Robinson stressed that the year-end numbers paint last year’s financial picture, and it is unclear if the government will balance the books after the $5.4-billion deficit laid out in the 2022-23 budget.
“It’s not like there’s a truckload of cash out in the back of the legislative buildings that we can spend,” Robinson said. “It just means we need to borrow less.”
The positive financial outlook means B.C. has the lowest debt-to-GDP ratio in Canada at 17.9 per cent. The province’s GDP grew by 6.2 per cent, the second-highest rate among provinces and better than the national average growth of 4.9 per cent.
By the numbers: Highlights from the government’s 2021-22 public accounts
• The government spent $6 billion on capital projects, with a quarter of that on roads, bridges and public transportation.
• $3.8 billion was spent on pandemic-related grants to businesses, COVID health and safety initiatives, and economic-recovery initiatives.
• Spending on programs and services increased by $3.4 billion in 2021-22, including a nearly $2-billion boost in health and a $1-billion increase in transportation.
• Crown corporations brought in higher-than-expected revenues, with earnings $1.4 billion higher than 2020-21. That includes $688 million from ICBC and $791 million from the B.C. Lottery Corp.
• Natural resource revenues were $2 billion higher than the previous fiscal year, mainly from a boost in forestry revenue due to higher stumpage rates and natural gas royalties and higher mineral revenues.
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