Global uncertainty prompts rethink of B.C. budget projections
Finance Minister Carole James delivered the 2019 first-quarter financial results Monday
British Columbia's finance minister is downgrading economic projections with a forecast of lower growth and a reduced budget surplus.
Carole James presented the revised financial forecast in her first quarterly budget update in Victoria, B.C., Monday. James said global economic uncertainty, the struggling forest industry, dips in commodity exports and lower retail sales prompted the economic revisions.
B.C.'s economic growth is now forecast at 1.7 per cent this year and 1.9 per cent in 2020, down from earlier projections.
James says B.C.'s budget surplus for 2019-2020 is predicted to be $179 million, a drop of $95 million from the estimate in February's budget.
The minister says the provincial economy remains strong with an increase in employment of more than three per cent.
"We continue to be a leader when it comes to job growth, with some of the lowest unemployment rates in the country. The private sector has reinforced B.C.'s strong position with the Bank of Montreal, Scotiabank and the World Bank, ranking B.C. as a top performer across Canada."
Global trade uncertainty
But James said other forces like the province's housing crisis brought on by skyrocketing real estate values and global trade uncertainty have taken their toll. With home sales now down 16.1 per cent on a year to date basis, B.C.'s average home price has dropped.
"So, there is a challenge. The average [price drop] is about 5.6 per cent. But again that's a provincial average. So, it's going to be a bigger drop obviously in areas like the Lower Mainland, in particular."
James said the province has built in "prudence" to lessen the blow.
"You will see property transfer tax revenues have decreased this quarter, as we focus on addressing the affordability crisis and the challenge facing people in B.C."
"Short-term gains at the expense of future generations and a housing market that is driven by speculative investment is risky for everyone," James said.