B.C. sees improved fiscal forecast in province’s first quarterly report

VICTORIA — The Province of British Columbia’s First Quarterly Report says B.C. is headed for an operating surplus in the face of ongoing risks and global economic uncertainty.

The report, which provides an early update on B.C.’s finances based on the first three months of the fiscal year, says the province has an operating surplus of $706 million for 2022-23 and smaller projected deficits over the next two years.

“While we can’t ignore today’s global inflation and the economic turbulence ahead, the province performed better than expected because British Columbians have worked hard to keep our economy going,” said provincial Minister of Finance Selina Robinson in a statement.

While the provincial economy is expected to grow next year, a release stated global inflation along with rising interest rates across Canada, the war in Ukraine and pandemic uncertainty remain.

“These are uncertain times, both on the international economic front and for British Columbians struggling with rising global inflation. This gives us an early snapshot of the province’s finances, just three months into the fiscal year. A lot can change between now and the end of the year, and we need to keep making thoughtful decisions – especially with everything that’s going on around the world. But this indicates that we’re in a strong position to continue investing in the things people need to reduce costs, strengthen services and build a stronger B.C. for everyone,” Robinson said.

The report said B.C.’s economy will continue to recover this year and grow modestly the next year. Real GDP is forecast to grow by 3.2 per cent in 2022 and 1.5 per cent in 2023. Nominal GDP is forecast to grow by 11.6 per cent in 2022 and 3.5 per cent in 2023.

Year-to-date to August 2022 employment was up 3.6 per cent and the unemployment rate remains low at 4.8 per cent in August 2022.

Housing construction activity remains elevated, the report stated, and is well above the 10-year historical average but home sales activity has fallen below average historical levels in recent months as markets adjust to rising interest rates.

Taxpayer-supported capital spending is forecast to total $29 billion over the fiscal plan period, $1.6 billion higher than in Budget 2022 with most of the increase due to changes in the timing of expenditures within projects. Spending also includes the addition of capital projects, such as the business plan approval for the Surrey-Langley Skytrain, the report stated.