B.C.'s Finance Minister Brenda Bailey Tuesday (Dec. 17) says weakening exports abroad and rising expenses at home have increased the size of the projected provincial deficit by $429 million to a historic high of $9.4 billion.
But Bailey also says that her government is currently working on plans to give 90 per cent of provincial households $1,000 next year, first as a grocery rebate, then as a permanent income tax cut, when asked whether B.C. could still afford the measure give the projected size of the deficit.
"It's going to take a bit of time for us to put that together, but (Premier David Eby) has been very clear that helping people address affordability is a priority for our government," Bailey said. She declined to give details when asked to rate the likelihood that government would have to borrow the money to finance the promise.
"We will have more for you on that as we get close to Budget 2025," she said.
Bailey later issued a more general statement when asked whether he government would walk back any promises made during the election campaign.
"Of course, promises made during an election period are to be delivered on during a mandate, a four-year time-frame, and you will see us do that work during that time-frame," she said.
The figures presented by Bailey cover the period from April to September 2024. They neither project the cost of the current federal tax holiday to provincial budgets, nor the potential savings of the temporary hiring freeze for administrative jobs in civil service. The figures also do not acount for the potential costs of 25 per cent tariffs threatened by incoming U.S. president Donald Trump.
Bailey said there is "no doubt" the threatened tariffs "present a significant danger" to B.C.'s economy and added it is "imperative" Canada responds.
Bailey's appearance comes a day after her federal counterpart Chyrstia Freeland tendered her resignation following a dispute with Prime Minister Justin Trudeau over the size of Canada's budget deficit, with Freeland favouring less spending.
Freeland's resignation letter urges officials to prepare for the threatened tariffs by building up reserves. Bailey says her ministry is currently modelling different scenarios "should these tariffs, in fact, come to fruition." She adds she also plans to meet with government's economic forecast council next month to discuss the issue.
More to come...
Bailey says the "economy is generally performing as expected" but warns of a weakening labour market and lower consumer spending, which means lower revenues in the future. "The projection for revenue and natural resource sector is also expected to decline, mainly due to lower natural gas prices," Bailey said. On the flip side, commercial Crown corporations are expecting higher revenues, with ICBC leading the way.