B.C. posts $5B budget deficit, minister says it's manageable

British Columbia's finance minister says now is not the time to balance the province's budget.

Katrine Conroy released the audited financial statements for the fiscal year ending March 31, which peg the province's deficit at $5.035 billion.

That's lower than the most recent $5.9 billion forecast last quarter, but higher than the $4.2 billion originally predicted when the 2023 budget was tabled last year.

Conroy said the budget forecast was impacted by a drop in natural gas prices and revenue as well as a record $1.1 billion spent on wildfire management.

B.C. spent $401 million more than was budgeted in emergency responses to flooding and other events.

The province says year-end revenues were nearly $2 billion higher than the budget due to increased revenue from sources including vehicle insurer ICBC.

It says these were offset by lower revenues from natural resources. At the same time, year-end expenses were nearly $3.5 billion higher than the budget figure.

WATCH| Finance ministerpreviews the 2024 budget:

'It is not the right time to make cuts,' B.C. finance minister says ahead of budget announcement

6 months ago

Duration 0:46

Katrine Conroy said in advance of her 2024/2025 budget announcement that now is not the time to cut services and programs in the province as residents face hardship over the rising cost of living, even though B.C.'s economy is expected to slow

Conroy said the government prioritized front-line services like health care, building affordable housing and helping people with everyday costs.

B.C. spent $8.8 billion on taxpayer-supported capital projects like schools, hospitals and housing.

Conroy says the New Democratic government does plan for a balanced budget "in the future" but it will be the responsibility of a later finance minister.

"Right now is not the right time. We have to make sure that we're providing services to people, that we're not making cuts," she said while presenting the province's public accounts for the 2023-24 fiscal year on Thursday.

"There's still affordability issues in the province, and so we want to make sure we can support people."

Record levels of spending, says Opposition

Peter Milobar,finance critic for the Opposition B.C. United,called the current situation unsustainable.

"What we have right now is ever worsening results, record levels of spending and a government saying they don't know what to do other than spend more money,"Milobar said.

In an interview with CBC News,B.C. Conservative Leader John Rustadcalled the deficit "absolutely disastrous."

"It's no wonder that [Premier]David Eby is out arguing about the equalization payments and that is an argument that's worth having, but really what we need to be focusing on is growing our economy," Rustad said.

"Our economy is in shambles."

Meanwhile, B.C. Green Party Leader Sonia Furstenausaid in a press release that the NDP's spending leaves real issues unaddressed.

"As we predicted, theB.C.NDP needed to spend more money than budgeted responding to the climate crisis, while receiving less revenue from natural resources," she said.

"It's time to take the climate crisis seriously; stop building methane plants (LNG), and implement a windfall profits tax on the oil and gas sector."

GDP growth, but growing deficit predicted

Conroy said the NDP is ready to put its financial record up against the other parties seeking government.

"Our budget is manageable, our deficit is manageable. We have one of the best GDP-to-debt ratios in the country," she said.

A statement from the province says provincial real GDP grew by 1.6 per cent in 2023, higher than national average and above the one per cent forecast in this year's budget.

Total provincial debt increased last fiscal year by about $18 billion, lower than the budget figure of about $18.5 billion.

The deficit is forecast to increase to $7.9 billion in the current fiscal year, according to the 2024 budget.