'Wake-up call': BC Business Council says provincial deficit is unsustainable

A major British Columbia business group is sounding a wake-up call about the provincial government's money management.

BC's latest budget update predicts a deficit of $8.9 billion by 2024, the province's largest deficit ever and something the Business Council of BC says is unsustainable.

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BC Budget 2024: Large deficits with large expenditures

“That's bigger than the deficit we had during the COVID-19 pandemic,” said David Williams, vice-president of policy for the Business Council of BC.

“We have the largest deficit relative to the size of our economy of any province, we have rapidly rising debt levels and we have seen repeated credit rating downgrades.”

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According to the council, the federal government currently has a deficit of 1.3 percent of GDP, Alberta's 1.1 percent of GDP and Ontario's 0.9 percent.

British Columbia's deficit is 2.1 percent of GDP.

Williams said the province will spend $600 for every resident of the province by 2026/2027 to pay down the costs of the growing debt burden.

He said newly appointed Treasury Secretary Brenda Bailey must prioritize curbing the deficit while finding ways to accelerate economic growth — whether that's through tax changes, streamlined regulations or shorter permitting times.

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Business groups are calling on the government to prioritize the economy

BC Conservative finance critic Peter Milobar said with major capital projects facing delays and skyrocketing budgets, this problem will only get worse.

“That eats away at the ability to build other schools, other hospitals or other transit projects at the same time, and then it trickles down to the debt service costs that lead to those credit downgrades,” he said.

“It's a downward spiral.”

Bailey, just a few days into her new role, said eliminating the provincial deficit will be job number one.

“It's the first thing I'll work on, a plan to get back into balance,” she told Global News.

Bailey will submit her first budget in February 2025.

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