Western Canada: B.C. budget focuses on response and rebuilding after climate disasters

Good morning. Wendy Cox in Victoria today.

Governments frequently like to have a theme to their budgets – an almost slogan-y focus to the areas to which they want to devote more resources. This year’s plan from the BC NDP is entitled “Stronger Together,” which these days, could be interpreted to be a plea as much as a theme.

The fallout from a particularly bad 2021 was illustrated throughout the document. Last year was the first full year of the pandemic, but starting in the summer, the province was also beset by unprecedented climate disasters in the form of heat, fire and floods. Add on the worst year on record for deaths from opioid overdoses and Finance Minister Selina Robinson had no choice but to deliver a budget responding to those crises.

The $73-billion spending plan projects a deficit of $5.5-billion and banks on an economic recovery from the pandemic, as well as historic disaster support from Ottawa. The province will increase its capacity to forecast floods and heat waves, and take a more proactive approach to wildfires. It also promises improved floodplain mapping that will help shape where rebuilding will take place, Justine Hunter writes.

But the budget has not reckoned with the high cost of rebuilding the province’s critical transportation links following November’s destructive storms, putting off an accounting of those costs to a fiscal update later in the year. The work has not yet been put out for bids, and Treasury Board hasn’t approved a financing plan for reconstruction.

The federal government has pledged its largest aid package ever – $5-billion to British Columbia – but it’s unclear when the money will arrive.

Over four years, from 2021 to 2024, British Columbia will add in another $2.1-billion, though not all that money is devoted to recovering what has been lost. Just under half of it, $925-million, will flow this year and most of that – $800-million – will be devoted to flooding recovery.

The money is a start on addressing what’s expected to be a massive bill. A Globe and Mail analysis concluded the costs of the damage to highways, municipal infrastructure, personal and agriculture properties could reach almost $9-billion, and could actually tally much higher.

Some $400-million this year is dedicated to pay for known costs, such as debris removal and financial assistance to individuals, businesses and communities. That is on top of the $500-million in emergency costs spent in the immediate aftermath of the November storms – including the work to get key transportation routes temporarily patched together.

Another $1.1-billion is earmarked for recovery contingencies: an unassigned pot of money that could be used to start reconstructing dikes, fixing highways or other infrastructure repairs, but that’s not clear.

“The total cost and necessary supports are not yet known as work to evaluate the damage is still ongoing,” the budget document states.

Provincial columnist Gary Mason is critical about the lack of a clear plan.

”No government has money for everything. And the dollars we’re talking about here are substantial. But governments have a responsibility to be open and transparent with the public, even if they rarely are,” he writes.

“When it comes to the damage caused by climate change-related catastrophes in B.C. last year, the bill is still be tabulating. And it may be some time before it’s paid in full.”

The government’s budget also included increased commitments for health care – including hiring more paramedics and dispatchers – and for mental health supports.

The budget numbers this year reveal wildly fluctuating economic conditions. A year ago, B.C.’s deficit for 2021–2022 was forecast to be $9.7-billion, but that’s come down dramatically and the shortfall is now expected to tally only $483-million.

“This decrease is mainly because of higher revenues, including significant one-time revenues and federal transfers, as well as higher natural resource and tax revenues as a result of stronger economic growth,” the budget document states.

Debt is expected to increase to $90.8-billion by the end of the three-year plan. The taxpayer-supported debt-to-GDP ratio is below 25 per cent this year, and is projected to reach 22.8 per cent by 2024.

The $5.5-billion deficit for 2022–2023 is expected to decline to $3.2-billion by 2024–2025.

Ms. Robinson did not indicate when B.C. might balance its budget.