Economy
Fiscal update shows B.C. well-positioned amid economic uncertainty
|
Consistent with other jurisdictions, the Second Quarterly Report confirms a fast economic recovery has led to stronger-than-expected revenues in B.C.
The Province’s operating surplus is $5.7 billion, an improvement of $5 billion over the First Quarterly Report. The change was primarily driven by a significant update from the Canada Revenue Agency (CRA) for 2021 personal and corporate income tax results.
“The Second Quarterly Report shows that we have experienced a faster economic recovery than private- or public-sector economists initially forecasted,” said Selina Robinson, Minister of Finance. “The changes we’re seeing are primarily due to updated income tax revenue data from the Canada Revenue Agency here in B.C. and across the country – far beyond what was forecasted when we built our budget.”
B.C. continues to introduce new cost-of-living measures, including the new BC Affordability Credit announced by Premier David Eby last week. The total cost-of-living measures rolled out since the summer cost approximately $2 billion:
- $395 million for ICBC rebates delivered in summer 2022
- $64 million for the School Affordability Fund in fall 2022
- $1 billion for Climate Action Tax Credit and BC Affordability Credit increases in October 2022 and January 2023
- $320 million for a one-time BC Hydro bill credit for BC Hydro customers this winter
- $100 million for enhanced BC Family Benefit payments from January to March 2023
In addition, families will begin saving up to $550 per month in child care costs starting in December 2022.
“We’re in a strong position to continue using the resources we have to deliver results on the issues that matter the most to people: housing; public safety; health care; climate change; and building a sustainable economy,” Robinson said. “No matter what is on the horizon, our government will continue to be here to support people in B.C.”
In the coming weeks, and as part of the budget process, the minister of finance will meet with members of the Economic Forecast Council and the ESG Advisory Council to discuss issues affecting the province’s economy and future forecasts. The Third Quarterly Report, including an economic forecast, will be released with Budget 2023 on Feb. 28.
Quick Facts:
- The CRA provides provinces and territories with point-in-time data for personal and corporate income tax revenues.
- Information for the 2021 tax year starts becoming available after tax returns are filed in the spring and summer of 2022, and final assessments are completed in March 2023.
- The increased revenue data for personal and corporate income taxes in the Second Quarter reflect these updates from the CRA.
- Year-to-date to October 2022, employment is up 3.4%, with the unemployment rate near historic lows at 4.2%.
- Revenues have risen to $81.1 billion, while expenses have decreased to $75.1 billion since the First Quarterly Report.
- Updated cost estimates for labour negotiations decreased by $1.1 billion in 2022-23, with higher costs in the next two years.
- The taxpayer-supported debt-to-GDP ratio is projected to improve to 15.8%, from the 17% forecast in the First Quarterly Report and the interest bite for taxpayer-supported debt is the lowest it has been for more than 30 years at 2.3 cents per dollar of revenue.
- Contingencies for pandemic and recovery, and flood recovery, in 2022-23 remain unchanged from budget, at $2 billion and $400 million respectively.
Learn More:
To read B.C.’s Second Quarterly Report, visit:
https://www2.gov.bc.ca/gov/content/governments/finances/reports/quarterly-reports
The minister’s PowerPoint presentation is available at: https://news.gov.bc.ca/files/Q2_2022-23_presentation.pdf
For information about new and existing support measures for B.C. residents, visit:
https://strongerbc.gov.bc.ca/cost-of-living/
Economy
Japanese government maintains view that economy is in moderate recovery – ForexLive
Economy
Can falling interest rates improve fairness in the economy? – The Globe and Mail
The ‘poor borrower’ narrative rules in media coverage of the Bank of Canada and high interest rates, and that’s appropriate.
A lot of people have been financially slammed by the rate hikes of the past couple of years, which have made it much more expensive to carry a mortgage, lines of credit and other borrowing. The latest from the Bank of Canada suggests rate cuts will come as soon as this summer, which on the whole would be a welcome development. It’s not just borrowers who need relief – the boarder economy has slowed to a crawl because of high borrowing costs.
But high rates are also a big win for some people. Specifically, those who have little or no debt and who have a significant amount of money sitting in savings products and guaranteed investment certificates. The country’s most well-off people, in other words.
Lower rates will mean diminished returns for savers and less interest paid by borrowers. It’s a stretch to say lower rates will improve financial inequality, but they do add a little more fairness to our financial system.
Wealth inequality is often presented as the chasm between well-off people able to pay for houses, vehicles, trips and high-end restaurant meals and those who are driving record use of food banks and living in tent cities. High interest rates and inflation have given us more nuance in wealth inequality. People fortunate enough to have bought houses in recent years are staggering as they try to manage mortgage payments that have risen by hundreds of dollars a month. You can see their struggles in rising numbers of late payments and debt defaults.
Rates are expected to fall in a measured, gradual way, which means their impact on financial inequality won’t be an instant gamechanger. But if the Bank of Canada cuts 0.25 of a percentage point off the overnight rate in June and again in July, many borrowers will start noticing how much less interest they’re paying, and savers will find themselves earning less.
Subscribe to Carrick on Money
Are you reading this newsletter on the web or did someone forward the e-mail version to you? If so, you can sign up for Carrick on Money here.
Rob’s personal finance reading list
A look at two strategies for paying off debt – the debt avalanche and the debt snowball. I’ll go with the avalanche.
How not to ruin your kitchen countertop
Anyone who has renovated a kitchen lately knows how expensive stone countertops can be. Look after yours by protecting it from a few common kitchen items.
What you need to know about stock market corrections
A helpful explanation of stock market corrections. It seems an opportune time to look at corrections, given how volatile stocks have been lately. Like scouts, investors should always be prepared.
Food inflation requires more careful grocery shopping. Here’s a roundup of food products – cookies, snacks, ice cream – that don’t taste as good as they used to. Food companies have always adjusted their recipes from time to time. Is this happening more because of inflation’s impact on raw material prices? A U.S. list – most products are available are familiar to Canadians, too.
Ask Rob
Q: I have Tangerine children’s accounts for my kids. Can you suggest a better alternative?
A: The rate on the Tangerine children’s account is 0.8 per cent, which actually compares well to the big banks and their comparable accounts. For kids aged 13 and up, check out something new called the JA Money Card.
Do you have a question for me? Send it my way. Sorry I can’t answer every one personally. Questions and answers are edited for length and clarity.
Tools and guides
A comprehensive guide on how to build a good credit score.
In the social sphere
Social Media: An offbeat way of fighting high food costs
Watch: Is now the hardest time ever to buy a home?
Money-Free Zone: Singer-songwriter Maggie Rogers has a new album called Don’t Forget Me and it’s generating some buzz because it’s a great listen. Smooth vocals and a laid back countryish vibe that hits a faster pace on one of my favourite cuts, Drunk.
More PF from The Globe
– He keeps ‘a few thousand in crisp new bills’ at home – is that a good idea?
– The pension pivot: Employers recognizing that workers need help with debt as much as retirement
– Her bond ETF is ‘a dud and not promising at all’ – should she sell?
– Despite high fees, Canadians remain perplexingly loyal to mutual funds. Here’s why
More Rob Carrick and money coverage
Subscribe to Stress Test on Apple podcasts or Spotify. For more money stories, follow me on Instagram and Twitter, and join the discussion on my Facebook page. Millennial readers, join our Gen Y Money Facebook group.
Even more coverage from Rob Carrick:
- 🎧 Catch up on Stress Test: Why millennials and Gen Z are Alberta-bound for a more affordable life • Rising interest rates brought pain for new homeowners – and opportunity for house hunters • Why more Canadians are choosing to be childfree or delay parenthood • Love in the time of inflation: How to manage rising costs when dating • You’re not bad at money – you’re suffering from money shame • Retirement might look different for Gen Z and millennials. Here’s how to plan for it • Recession-beating tips for the job market, housing, investing and the cost of life • Is the middle class dead for millennials and Gen Z?
- ✔️ The housing file: A house isn’t special. Get your head straight about the reality of home ownership • The good, the sad and the unaffordable: Saving for a home downpayment in Canada’s big cities • Property taxes are popping in some cities – how worried should you be about other tax hikes? • Our other real-estate problem – people have too much wealth tied up in houses • Borrowers and savers, here’s how to time the eventual rollback of interest rates
- 📈 Investing: Canada’s top digital broker is TD Direct Investing, with an assist from the TD Easy Trade app • 2023 Globe and Mail ETF buyer’s guide part one: Canadian equity ETFs • For the ultimate in cheap investing, check out the Freedom .08 ETF Portfolio • Yes, there is risk in Canadian bank deposits for the unwary and complacent • CDIC covers bank deposits, but who protects your investments if your broker goes bust? • Answers to your questions about the low-risk ETF paying almost 5% • Happy fifth birthday to one of the all-time best investing products for everyday people • An investing strategy that wins cleanly over the long term by outperforming in bad years like 2022
- 💰 Your money: Mortgage holders, savers and GIC investors, it’s time to change your thinking on interest rates • How much debt is each generation of Canadians carrying, and how do you compare? • For the sake of their financial futures, young people should leave Toronto and Vancouver • This practical new spin on a savings account might just peel you away from your big bank • Rental fraud grows amid rise in fake, falsified tenant applications • Are Canadians worse off financially now than in the 1980s? • From groceries to auto loans, here’s how much more it costs to live right now • When saving for retirement, should you change your asset mix over the course of your career? • Do retirement income needs always rise alongside inflation? Not necessarily • When the bank suggests you lock in your variable rate mortgage, it has an angle
Economy
LIVE: Freeland joins panel on Indigenous economy – CTV News Montreal
[unable to retrieve full-text content]
LIVE: Freeland joins panel on Indigenous economy CTV News Montreal
Source link
-
Business23 hours ago
Honda to build electric vehicles and battery plant in Ontario, sources say – Global News
-
Science24 hours ago
Will We Know if TRAPPIST-1e has Life? – Universe Today
-
Health21 hours ago
See how chicken farmers are trying to stop the spread of bird flu – Fox 46 Charlotte
-
Health24 hours ago
Simcoe-Muskoka health unit urges residents to get immunized
-
Investment22 hours ago
Own a cottage or investment property? Here's how to navigate the new capital gains tax changes – The Globe and Mail
-
Science19 hours ago
Osoyoos commuters invited to celebrate Earth Day with the Leg Day challenge – Oliver/Osoyoos News – Castanet.net
-
News19 hours ago
Freeland defends budget measures, as premiers push back on federal involvement – CBC News
-
News22 hours ago
‘A real letdown’: Disabled B.C. man reacts to federal disability benefit – Global News