B.C.’s recovery from the COVID-19 recession of 2020 showed up most dramatically in a $5.5 billion improvement in the provincial deficit reported in the province’s latest budget, after it had been forecast to be $13.6 billion last fall in the depths of the pandemic.
While natural resource income recovered and lumber prices soared, B.C. reaped its most significant gains from strong income taxes and a surge in real estate that neither the province nor its private sector advisory board saw coming.
“This $5.5 billion improvement is mainly thanks to higher revenues, but also somewhat lower spending and improved operating results in government organizations, including ICBC,” Finance Minister Selina Robinson said in her budget presentation April 20.
The budget estimates that property taxes to the province are $2.3 billion for the year ended March 31, rising to nearly $3 billion for 2021-22. Property transfer tax took in $2 billion last fiscal year and is forecast to decline slightly to $1.97 billion in the current year, as the finance ministry forecasts a “moderation in market activity in 2022.”
Monthly home sales reached record levels in late 2020 and have continued to grow in 2021, with high-wage employment “resilient” in the pandemic, low interest rates and demand for larger homes by remote workers, budget documents say.
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