New bill lets B.C. government run deficits
In addition to tax tweaks aimed at softening the pandemic’s economic blow, Bill 18, Economic Stabilization Act, will allow the B.C. government to table deficit budgets through 2023-24.
“It may take three years to be able to address the fiscal challenges that we’re going to face in our province,” Finance Minister Carole James told reporters yesterday.
The province’s Balanced Budget and Ministerial Accountability Act currently prohibits budget deficits.
James stressed the unprecedented uncertainty and deep economic impacts the pandemic has set in motion as the reason for the legislative change.
“Every economist I’ve talked to … across provinces … across the globe [is] talking about the fact that right now is the time to focus on support for people and businesses,” James said. That additional spending could easily blow through the $227-million surplus built into the 2020 budget. The NDP also allocated a generous $300-million forecast allowance and $900 million in additional contingency funding in Budget 2020.
The NDP government has yet to disclose how deep the province’s deficit is likely to run.
“I can tell you that it is a hole and it’s a big one,” Horgan told reporters yesterday.
However, James said it will take “a very, very extreme situation” for the NDP government to run three consecutive deficit budgets.
Cabinet ministers voting for the legislation could well be voting for a 10 per cent pay cut, as the bill does not remove a provision that ministry deficits require a pay reduction for the minister responsible.
If passed, Bill 18 will also allow the government to introduce supplementary estimates to cover any “government-directed operating debt.”