BC Budget Forecasts Years of Deficits, but Spends Big on Health, Housing, Families

British Columbia Finance Minister Katrine Conroy and school principal Vicki Ives serve up a hot lunch for students at Ruth King Elementary during a photo-op ahead of the budget while in Langford, B.C., Feb. 27, 2023. The Canadian Press/Chad Hipolito

Deficits are in the forecast for British Columbia’s budget, but that’s not stopping the New Democrat government from spending billions on health, housing and families.

Finance Minister Katrine Conroy said the government plans to invest in people during uncertain times, despite a deficit projection of $4.2 billion in 2023-2024, and $11 billion over three years.

“When times are tough, that’s exactly when you need someone in your corner,” she said in her budget speech to the legislature Tuesday.

The projected deficits follow an unexpected surplus in 2022-2023. The windfall, originally forecast at almost $6 billion, has been pared back to $3.6 billion after Premier David Eby’s government spent much of it on affordability, infrastructure and public safety initiatives.

Conroy defended the government’s plan to post consecutive deficits, saying B.C.’s economy is strong, and the government must help people.

“We’ve proven during the pandemic that we can incur deficits by supporting people,” she said in a news conference. “It’s just not the right time to start making cuts. It’s not the right time to start asking people to pay out of their own pockets for services they expect to get.”

B.C. Business Council spokesman Ken Peacock said the government’s budget appears to be written with a “scatter gun.”

He said the council doesn’t support the large deficits, saying they cause inflation and crowd out investment.

“They are spending right across the board,” he said. “It’s just too loose.”

Economic growth in B.C. is forecast to slow from 2.8 percent in 2022 to 0.4 percent this year, before rising to 1.5 percent in 2024.

B.C.’s total debt is forecast to increase to 107.9 billion next year from $93.4 billion this year.

Conroy said the government will spend $6.4 billion more on health care over the next three years, including more than $1 billion to expand mental health and addiction services, said Conroy.

“Mental health is health and we’re making the largest investment in mental health and addiction services in B.C.’s history,” she said in her speech. “Our focus will be on expanding supports across the spectrum of care for people struggling with addiction. We’ll do this by expanding the number of treatment and recovery beds.”

Conroy said the government intends to make mental health and addictions services a seamless model of care that transitions from detox to treatment to aftercare.

Since 2016, when B.C. first declared a public health emergency, more than 11,000 people have died of illicit drug toxicity and overdoses.

Opposition Liberal Leader Kevin Falcon said the budget is a “massive disappointment. There’s nothing in this budget that talks about growing the economy.”

He asked: “Do you feel better off than you were six years ago? I’m struggling to find anything that feels like it’s gotten better.”

Green Leader Sonia Furstenau said the budget acknowledges challenges facing B.C., but fails to shape a better future for the province.

“It takes courage to make lasting changes that support people over the long term, not just cheque by cheque,” she said in a statement. “Premier Eby seems to be sprinkling money around to a lot of existing programs and spending big on affordability cheques, but we’re not going to solve the underlying issues that are driving big problems.”

The budget also delivers on previous NDP government promises to provide free prescription contraception for B.C. residents and tax credits for renters.

The NDP made a $400 renter’s rebate a campaign promise in 2017. The new budget includes an income-tested tax credit of up to $400 that will apply to 80 percent of rental households in B.C., starting in 2024, said Conroy.

The government will increase income and disability assistance payments, expand existing school meal programs and raise family benefit payments by 10 percent in July as part of $4.5 billion in family support efforts in times of rising inflation, she said.

About 75 percent of B.C. families with children are eligible for the family benefit and single parents can receive an additional $500 annually, on top of the 10 percent boost, said Conroy.

“For families who feel like they are just getting by, and never getting ahead, we’re here for you,” she said. “Now, parents will receive up to $1,750 for the first child, $1,100 for the second and $900 for the third.”

People on income and disability assistance will see their shelter rate increase by $125 a month starting in July, said Conroy, who added that it’s the first shelter rate increase since 2007 and will help about 160,000 people, including 33,000 children.

The budget also includes supports for the government’s “refreshed” housing plan with $4.2 billion over three years to build more homes for renters, middle-income families, Indigenous people and students, she said.

“We’ll clear the way for more housing with zoning changes and a faster permitting process,” Conroy said. “And we’ll make major new investments to increase housing and services near public transit hubs around the province. Our plan will also help ease pressure on local rental markets by building thousands more student housing spaces.”

In 2017, when the NDP was first elected it introduced a 10-year plan to build 114,000 homes.

B.C.’s carbon tax will increase $15 per tonne annually until it hits $170 in 2030, while climate action tax credits will be expanded, with a four-person family receiving a maximum of $900 a year, up from $500.

By Dirk Meissner