BC Budget 2021 — Missed opportunities and inadequate investments

April 20, 2021

VANCOUVER —  The BC government made some needed investments in its 2021 budget for COVID-19 recovery, but there is scarce new funding for major priorities like child care, housing and climate action says the Canadian Centre for Policy Alternatives.

“Aside from time-limited spending on the COVID-19 pandemic, the BC government tabled a surprisingly stay-the-course budget today,” says economist Alex Hemingway. “It emphasizes declining deficits over the next three years and a misplaced aspiration to return to balanced budgets through spending constraints when public investment is essential.”

While the budget appropriately includes significant targeted spending relating to the pandemic, there is still no plan to provide all workers with access to paid sick days and no ongoing measures to ensure the recovery curbs deep gender, racial and economic inequities brought into sharp focus by the pandemic, says senior economist Iglika Ivanova.

“There are positive steps in a number of areas, but an opportunity has been lost to make this the most important budget in a generation, something the majority of British Columbians need—especially those most affected by the pandemic,” Ivanova says.

After the landmark commitment to build a quality, non-profit, affordable child care system across the country in the April 19 federal budget, perhaps one of the most disappointing aspects of the BC budget is an insufficient provincial investment in child care.

“Regrettably, the new provincial child care funding does little to support the transformation of our current fragmented patchwork of programs into a coherent provincial system nor does it prioritize expansion in the non-profit child care sector unlike the federal budget,” says Ivanova.

“The new provincial $233 million funding commitment for child care over three years is far short of what was promised in the election platform and the expanded number of new $10 a day child care spaces is inadequate. Tens of thousands of families across the province are struggling with child care affordability and lack of spaces.”  

At $500 million over three years, the government is making BC’s largest-ever mental health investment. Hemingway and Ivanova question whether $330 million earmarked over three years is sufficient to tackle the opioid public health emergency.

In a number of areas, health, including seniors care, education and poverty reduction, the provincial government made some improvements on the margins of what’s needed, but mostly investments didn’t go far enough. There are no additional supports for post-secondary students or public post-secondary institutions generally, aside from funding for targeted workforce-related training programs. And, notably missing in the budget are the free contraception and Fair Pharmacare enhancements promised in the election campaign, or additional dedicated support for charities and non-profit organizations whose revenues have tanked during the pandemic. 

The government also missed an important opportunity to reform our fragmented income social support system and enhance income and wrap-around supports for people with disabilities, youth aging out of foster care and people (mostly women and children) escaping family and sexual violence, despite having received excellent practical recommendations from the Basic Income Panel, Ivanova and Hemingway add.

As we are in the third wave of COVID-19, they say it is shocking that both the BC and federal governments tabled budgets within a day of each other without plans for paid sick days when public health experts say that’s what is needed to better respond to the pandemic. Many essential workers have low-paid jobs without paid sick leave making them more likely to go to work sick and infect others.

Housing affordability is a continuing issue in BC with prices soaring yet the budget contains surprisingly little that is new for housing, Hemingway says. The biggest item is a recently-announced $2 billion increase in rolling construction loan financing to facilitate middle-income rental housing construction. Budget funding continues for temporary shelter and hotel spaces related to the pandemic. 

Looking at the fiscal picture, the BC government is running deficits, which in economic terms is precisely what it should be doing right now as public investments are essential for the post-pandemic recovery, Hemingway says.

“With this budget, the deficit for this past fiscal year (2020/21) is now forecast at $8.1 billion, which is far less than the December 2020 forecast of $13.6 billion. This means there is certainly fiscal room to allocate funds for priorities like paid sick days or additional supports to renters during the pandemic,” he explains.

The budget includes substantial, non-pandemic increases in capital expenditures, driven primarily by BC Hydro. There are also moderate capital spending increases for health and education. Capital spending plans were already at historic highs prior to Budget 2021, however, the annual increases fall short of the $3 billion per year found in the NDP platform.

For more information and to arrange interviews, please contact Jean Kavanagh at 604-802-5729, [email protected]