VANCOUVER, February 28, 2022 – Amid rising costs and other challenges, Budget 2023 earmarks significant funding in many areas to “help British Columbians weather the storm and come out stronger.” The Chartered Professional Accountants of B.C. (CPABC) particularly recognizes the budget’s focus on boosting housing supply and record capital investment. However, the budget lacks investment to improve B.C.’s competitiveness, provides little support for B.C. businesses struggling with rising costs, and the province’s fiscal surplus is projected to transition into significant deficit spending.
“The housing affordability crisis is one of the biggest societal and economic challenges facing the province. This budget will help improve housing supply, with a particular focus on those units most in demand,” said Lori Mathison, FCPA, FCGA, LLB, president and CEO of CPABC. “This housing investment will support many British Columbians struggling with rising shelter costs.”
The province’s refreshed housing plan includes $4.2 billion in new operating and capital funding over the next three years, with a focus on homes for renters, Indigenous people, middle-income families, and students. In a recent survey by CPABC, B.C. CPAs ranked high housing prices as one of the top three challenges facing business, and believed that improving housing supply is one of the top ways to boost the province’s economic outlook.
“This not only provides much needed support for residents, it will also help the many businesses struggling to attract talent due to high housing prices,” continued Mathison. “However, given organizations are also facing rising costs, we were hoping to see more support for businesses to help control operational expenditures, improve productivity, and boost incomes.”
Budget 2023 provided an update on the planned capital investment in the province, another top priority identified by B.C. CPAs. In total, taxpayer-supported capital spending is expected to reach a new record, $37.5 billion over the next three fiscal years.
“Elevated interest rates are expected to weaken private investment this year, so this capital investment will be an important support for economic activity. These major projects will better connect our communities and provide important and much needed infrastructure,” continued Mathison. “However, the province’s fiscal situation is expected to worsen.”
The provincial surplus was estimated to be $3.6 billion in 2022/23. Higher expenses and weakened revenues are expected to result in deficits in each of the next three years ($-4.2 billion in 2023/24; $-3.8 billion in 2024/25; and $-3.0 billion in 2025/26).
B.C.’s taxpayer-supported debt-to-GDP is estimated to be 16.4 per cent in 2022/23 and is forecasted to reach 23.0 per cent by 2025/26.
“While this budget provides important funding for key priority areas, the significant deficits and an increase in debt over the next three years is worrying,” concluded Mathison. “Given the very challenging economic landscape, including uncertainty about inflation, economic growth, and interest rates, this provides little buffer to absorb downside risk.”
About CPA British Columbia
The Chartered Professional Accountants of British Columbia (CPABC) is the training, governing, and regulatory body for over 38,000 CPA members and 6,000 CPA students and candidates. CPABC carries out its primary mission to protect the public by enforcing the highest professional and ethical standards and contributing to the advancement of public policy. A total of 908 surveys were completed between November 23 and December 7, 2021, which presents an overall response rate of 13%.
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For more information, contact:
Aaron Aerts, Economist