British Columbia is forecasting a $12.8-billion deficit for the 2020-21 fiscal year.
The deficits are driven by the economic impact of the novel coronavirus pandemic, but there is some optimism from the B.C. government based on recent job numbers.
Finance Minister Carole James has outlined the financial picture based on the first quarter of the year, which goes from April until the end of June.
B.C. forecasting a $12.8B deficit, kids return back to the classroom
The forecast comes after the province provided a financial snapshot in July.
Since the summer, the overall impacts of the pandemic on revenues and expenses are lower than anticipated, with a $5.7-billion decline from Budget 2020, compared to a $6.3-billion decline shown in the July scenario.
The deficit has grown to reflect $1 billion built in by the government for fiscal prudence.
“Since the province’s July fiscal and economic scenario, we have seen stronger than expected consumer spending, housing activity and employment gains,” James said Thursday. “These gains are offset by increased prudence to help B.C. weather the long road ahead.”
First look at B.C. economy since pandemic began, update on Canada-U.S. border closure
B.C.’s real gross domestic product is forecast to decline by 6.7 per cent in 2020, before increasing by three per cent in 2021.
From May to August, B.C. regained roughly 62 per cent of the total number of jobs lost since February. But there were still 149,600 fewer jobs in August compared to February, the province said.
© 2020 Global News, a division of Corus Entertainment Inc.