The unexpected cost of the early COVID-19 response contributed to turning B.C.'s finances from a small surplus to a deficit of $321 million, according to the province's 2019-20 audited financial statements.
Fourth quarter declines in tax revenue and losses at Insurance Corporation of British Columbia (ICBC) — both related to the pandemic — were also factors, said Finance Minister Carole James.
The deficit represents a drop of $595 million from the $274 million surplus projected in the 2019 budget.
Revenue generated from personal income taxes, consumption taxes and property taxes were all lower than expected, especially in the final quarter of the fiscal year ending March 31, 2020.
As well, ICBC lost $298 million due to market conditions from COVID-19, according to the report.
North America began to feel the effects of the pandemic in earnest — economically and otherwise — at the beginning of March. The provincial government declared a state of emergency on March 18.
James says B.C. remains in a relatively good position financially, but expects the effects of the pandemic to be felt in the coming years.
"Despite the impacts of COVID-19, I am encouraged that B.C. continues to show positive signs, including improving employment numbers, robust capital spending and the best debt affordability in Canada," she said.