B.C. Finance Minister Selina Robinson delivered a budget Tuesday that emphasizes spending, on the heels of an economic forecast showing B.C. weathered the storms of the pandemic, fires and floods better than expected in 2021,
The budget calls for $71 billion of spending with a built-in deficit of $5.5 billion.
“We know that we are at our best when we work together and look out for each other,” Robinson said. “The scale of the problems we have seen recently — from the ongoing pandemic to the devastating effects of climate-related disasters — require government leadership and collective action.
“We know that the strength of our economy is intertwined with the well-being of people communities and the climate.”
The budget includes billions to address infrastructure upgrades, health care, climate change, child care and housing.
Robinson defended the massive change from a $483-million deficit in the 2021-22 fiscal year to a projected deficit of $5.5 billion in the coming year, saying while there were some improving revenue numbers, the province also received one-time federal relief funding that added to the bottom line.
Last fall, Robinson forecast a budget deficit of $1.7 billion for the 2021-22 fiscal year, down from an original projection of $9.7 billion.
For the coming year, the finance minister is forecasting four per cent economic growth.
She said expected increases in the public service reflect the need for more doctors, nurses, care workers, paramedics and wildfire fighters, and that the province needs new schools, hospitals, urgent care centres and a significant investment in aging transportation infrastructure that took the brunt of natural disasters last fall.
Robinson told reporters not only does the government have to repair the roads and bridges, it has to ensure they are built to withstand future disasters and climate change.
The budget includes $2.1 billion for disaster-recovery efforts and future response to the threats posed by wildfires, floods and heat waves.
Robinson said the budget does not include a total estimate of the recovery costs for last year’s natural disasters, but she included a $1.1-billion contingency fund to cover future costs.
New money is earmarked for surgeries, medical centres, paramedics and emergency dispatchers. An extra $3.2 billion is dedicated over three years to “build an even stronger” health and mental health-care system, said Robinson.
The budget announced $284 million to help cut average child care fees by 50 per cent to $20 a day by the end of 2022, and the average pre-school fee to $20 a day by September 2023. The budget also promised 30,000 new spaces for children under the age of six within five years, and 40,000 new licensed spaces in the next seven years.
It includes $633 million to address homelessness, primarily through providing more secure housing and support options for vulnerable people.
The province has earmarked $27.4 billion over three years for infrastructure improvements, which means thousands of jobs as new schools, hospitals, transit and roads are built and rebuilt.
There’s $185 million to help people affected by the deferral of old-growth logging, $289 million over the next five years to expand high-speed internet access, $67 million in skills and jobs training, and an accelerated $100 million to fund mixed-income rental housing.
The province has created a new Declaration Act Secretariat, with a $12-million budget for the next three years, to ensure provincial legislation is aligned with the United Nations Declaration on the Rights of Indigenous Peoples.
Robinson said reconciliation is a process that takes time and she hopes the secretariat and a new Land, Water and Resource Stewardship Ministry will support reconciliation and address how the province works with First Nations on land and water issues.
On the environmental front, the budget includes an additional $1 billion over three years to fight climate change and implement new initiatives, such as $9 million to expand the Low Carbon Fuel Standard and to develop a new emissions cap on natural gas utilities.
For the province’s drivers, there is a PST exemption for used zero-emission vehicles and a higher threshold for luxury surtax on passenger zero-emission vehicles up to $75,000, as well as $79 million to provide rebates for electric-vehicle charging systems, fund hydrogen refueling infrastructure and support commercial vehicle pilot projects.
Bryan Yu, chief economist with Central 1 Credit Union, said he was surprised that the operational deficit remains generally near levels from budget 2021, despite strong revenue projections reflecting the higher expenses that are incurred. Expenses are up about six per cent from that budget, he noted.
Yu said there are sufficient contingencies and forecast allowances built in to suggest that a balanced budget will still likely be achieved, given that budgets tend to employ conservative forecasts, though he added that it lacks a “clear economic plan” for boosting natural resources and increasing productivity.
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
