BC Budget Affected By Wildfires, Global Economic Challenges

The province says its First Quarterly Report shows the economy is proving resilient amid challenges, including a devastating wildfire season, high interest rates and costs, and a slowing global economy.

“With a diverse economy and strong financial planning, B.C. is in a good position to weather global uncertainties as well as keep people safe through this wildfire season and drought,” said Katrine Conroy, Minister of Finance.

“Through challenges like the pandemic, global inflation and high interest rates, we have led the country in making smart investments in people and the services and infrastructure they depend on.”

The updated year-end deficit is projected to be $6.7 billion, which is an increase of $2.5 billion from Budget 2023.

The change is mainly due to spending to protect people and communities from wildfires as B.C. faces the worst wildfire season in the Province’s history, and volatile global natural gas prices, leading to a drop in natural gas revenues.

B.C. is seeing a better-than-expected performance this year in housing starts and the labour market, which have helped lead the province to an improved economic forecast of 1.2% growth in 2023.

New home construction was up 15.5% year-to-date to August and is expected to continue to trend at an above-average pace.

Employment in the province increased by 1.3% year-to-date to August, while B.C. continues to see a lower unemployment rate than the national average.

Projected capital spending increased by $413 million, mostly to support improvements to health-care facilities and housing projects.

The longer-term outlook forecasts that global economic headwinds will affect B.C. and the rest of Canada in 2024, with slower economic growth and higher unemployment.

To see the full release, visit Government of British Columbia.