BC Today – Daily Report September 11, 2020

Quotation of the day

“A feeding the chickens approach.”

Business Council of BC executive vice-president Jock Finlayson says the $1.5 billion the NDP government has allocated for economic recovery will not go far enough.

Today in B.C.

On the schedule The house is adjourned for the summer.

First quarter results forecast uncertain economic recovery for B.C. B.C.’s deficit is set to hit $12.8 billion in the 2020-21 fiscal year, according to the first quarterly report released by Finance Minister Carole James yesterday.

That’s up from the $12.5 billion deficit James anticipated in her July fiscal update.

The province now projects spending an additional $1.34 billion on its pandemic response this year — for a total of $7.6 billion.

That includes the province’s $5-billion pandemic response package and just over $1 billion in related response measures, such delaying the annual carbon tax increase, which is expected to cost the province $268 million, and cutting commercial property taxes by $714 million.

The deficit projection also includes a $1-billion forecast allowance to address long-term financial uncertainty.

Consumer spending in B.C. has recovered more strongly than expected, taking the edge off some revenue losses, and many of the economic indicators tracked by the finance ministry are looking slightly better than they were two months ago.

The somewhat improved economic forecast should be cause for cautious optimism spiked with a healthy dose of realism, said the finance minister.

“There are some early positive signs of recovery for people and for businesses — we see this in the latest employment data and improved retail sales, some resiliency in the housing market,” James told reporters. “But again, being a realist, we have a long road ahead of us.”

The forecast ● Revenue in the 2020-21 fiscal year is expected to take a $4.6-billion hit compared to Budget 2020’s $60.6 billion — down from the $6.3 billion decline projected in July. ● Despite employment gains since May, the province has yet to recover 149,600 jobs lost since February and unemployment remains 5.7 per cent higher than before the pandemic. ● Taxpayer-supported debt is projected at $59.9 billion — an increase of $10.6 billion from Budget 2020 — pushing B.C.’s debt-to-GDP ratio up by 5.3 per cent. ● GDP is expected to contract by 6.7 per cent this year, with a partial recovery of three per cent anticipated in 2021, according to the province’s projections. The Economic Forecast Council expects 5.2 per cent GDP growth in 2021.

Home sales, corporate profits and retail recovery Corporations in B.C. will see a 18.4 per cent decline in profits this year — up from a projected 36.4 per cent drop predicted in July — with retail sales expected to be down 10.8 per cent, one-third less than the 15.9 per cent decline expected in July.

The fiscal update predicted home sale prices would drop by nearly one-third — that has been revised to a decrease of 9.6 per cent. Housing prices have increased year-over-year, following a steep drop in April, and home sales have rebounded to pre-pandemic levels.

Government revenues are down across the board — except for federal transfers, which have risen $2.4 billion from Budget 2020’s projections. Natural resource revenues remain the least affected by the pandemic — just $244 million lower than Budget 2020 — while income tax revenue is expected to be $2.1 billion lower than expected.

Capital spending is down by $364 million. James attributed the drop mostly to pandemic-related delays and said the NDP’s ambitious capital investment plans will continue mostly as normal.

Next week, the finance minister said she will be unveiling the province’s proposed framework for economic recovery efforts, backed by $1.5 billion in funding earmarked in April.

‘A shot in the dark’: Lack of economic recovery plan makes projections precarious Liberal Finance critic Shirley Bond was unsurprised by the first quarter results but said the fact that the NDP government has yet to release an economic recovery plan is “incredibly disappointing.”

“This update has made it clear that the NDP government can no longer drag its feet on producing a plan that is so essential to our province's future,” she said in a statement.

Jock Finlayson, executive vice-president and chief policy officer for the Business Council of BC (BCBC), called the $1.5 billion allocated for economic recovery “a pittance” and said it may take much more to get the provincial economy back on track.

“Where we’ve fallen short has been on the economic recovery — there hasn't been any real economic plan out of this government, they've been sort of muddling through,” Finlayson told BC Today in an interview.

Marc Lee, senior economist with the Canadian Centre for Policy Alternatives, discouraged the NDP from eyeing spending cuts.

“It’s not a time to be pushing for a lower deficit because that's going to come at the expense of folks who have [experienced] adverse impact,” he said. “I think it's appropriate that the deficit be large right now.”

Lee is hoping to see the province invest in a green recovery strategy with a focus on renewable energy, which he characterized as “typically very positive in terms of job creation.”

Today’s events

September 11 at 10 a.m. — Online Auditor General Michael Pickup will release his office’s report, Summary of COVID-19 Pandemic Funding Allocations and Other Financial Relief Measures.

September 11 at 10:30 a.m. — Burnaby Federal Employment Minister Carla Qualtrough will announce federal support for youth and student employment at Simon Fraser University’s Burnaby campus. She will be accompanied by Liberal MP Terry Beech (Burnaby North–Seymour).

September 11 at 12 p.m. — Online Indigenous Relations and Reconciliation Minister Scott Fraser will be joined by Huu-ay-aht First Nations Chief Councillor Robert J. Dennis Sr. and Hereditary Chief Derek Peters for an announcement about Bamfield Road.

September 10 at 7:30 p.m. — Online Energy Minister Bruce Ralston — the “reigning trivia champion” — will host a rematch trivia night party fundraiser.

Topics of conversation

● B.C. broke its single-day record for COVID-19 cases yesterday, reporting 139 new cases. There were 1,412 active cases (up 34) with 42 people in hospital (up five), 14 of them critical (down one). No new deaths were reported, leaving the provincial total at 213.

● Dr. Brian Day lost his decade-long court case against B.C.’s public health-care system yesterday when the BC Supreme Court rejected his argument that the system denies patients with the money to pay for private care their right to timely treatment. ○ “The ruling emphasizes the strength and the importance of public health care, which is a cornerstone of our identity in British Columbia,” Health Minister Adrian Dix said of the ruling. He noted that a section of the 800-page judgement includes statements from physicians outlining improvements in surgical wait times in recent years.

● BC Liberal Leader Andrew Wilkinson announced the second shuffle of his 30-person shadow cabinet yesterday. “Our renewed direction has been shaped by conversations with thousands of British Columbians in every corner of the province as we developed ideas and solutions to help people, non-profits, and small businesses that are all struggling right now,” Wilkinson said of the move, which comes amid rising speculation of an election. ○ Sixteen Liberal MLAs have new critic portfolios including Laurie Throness, who was moved from children and family development to transportation and infrastructure, paired with Mike Bernier, who was previously responsible for the oil and gas development file.

○ Abbotsford West MLA — and former Liberal leadership candidate — Mike de Jong is off the backbench and back in the shadow cabinet, taking over the attorney general portfolio from former critic Michael Lee. Lee now shares the Indigenous relations portfolio with Doug Clovechok. ○ The Liberals now have a trio of economic development critics: Jas Johal (whose former ICBC portfolio now belongs to Stephanie Cadieux), Ben Stewart and Jackie Tegart, who also serves as caucus chair.

● RCMP in Campbell River issued a warrant for Kasimir Tyabji-Sandana — son of former BC Liberal MLA Judi Tyabji —on charges of sexual interference and invitation to sexual touching.

Election 2021: Nominations and departures

NDP ● Aaron Sumexheltza will be the NDP candidate in Fraser—Nicola, a riding currently held by Liberal MLA Jackie Tegart. ○ Sumexheltza, a lawyer, is a former chief and current councillor for the Lower Nicola Indian Band and chair of the Indigenous Business and Investment Council.

News briefs

Provincial hydrogen strategy coming this fall ● Hydrogen will play a “significant role” in helping B.C. reach its clean energy goals, according to Energy Minister Bruce Ralston, who is set to unveil the province’s strategy on the alternative fuel this fall. The Canadian Hydrogen and Fuel Cell Association already has a new arm in the province — Hydrogen BC, which the province has pledged to provide with financial support for over the next three years. The organization will “promote and accelerate the use of hydrogen technologies” in B.C. and co-ordinate interested stakeholders. ○ Ralston announced an additional $10 million to support the construction of 10 new hydrogen fuelling stations across the province. B.C. currently boasts the “largest hydrogen fuelling network” in Canada with three operational hydrogen fuelling stations and another three set to open by the end of 2021.

School bus seat belt pilot hits the road ● School buses equipped with three-point seat belts that meet federal safety standards are now rolling in the Fraser—Cascade school district. The Nanaimo—Ladysmith school district will follow suit in January 2021.

○ The pilot program — a joint federal-provincial venture — was prompted by a report from the federal Task Force on School Bus Safety, which recommended exploring the use of seat belts in school buses to improve safety.

Lobbyist registrations

Consultants who registered, renewed or amended registrations from September 4 to 10, 2020

● Steve Vander Wal, Hill+Knowlton Strategies o Clients: Gamma Dynacare Central Medical Laboratories GP Inc. (Dynacare), Chartered Professional Accountants of British Columbia, AbbVie Corporation, BC Automobile Association

● Chris McCluskey, Proof Strategies o Clients: The Home Depot of Canada Inc., StubHub Inc.

● Erin Iverson, Capital Hill Group o Clients: CyberArk Software Canada Inc.

● Thomas Giraud, Sedgwick Strategies Inc. o Clients: Rockies LNG Partners

● Stephen Howard, Strategies 360 Canada o Clients: Horsemen's Benevolent and Protective Association of BC

● Bill Tieleman, West Star Communications o Clients: International Association of Heat and Frost Insulators and Asbestos Workers - Local 118

● Giulia Turco, FleishmanHillard HighRoad Corp o Clients: Metro Vancouver

● Jim Rutkowski, Bradley Lavigne, David Bieber, Counsel Public Affairs Inc. o Clients: Aerospace Industries Association of Canada

● Moe Sihota, Parhar Investments & Consulting Ltd o Clients: Saulteau First Nation Band

● Harvey Arcand, WE Consultants & Benefits Services Ltd. o Clients: IWA Forest Industry Pension & LTD Plans

Organizations that registered in-house lobbyists from September 4 – September 10

● BC Teachers' Federation

● Federation of Independent School Associations in BC ● Comox District Teachers' Association ● Chilliwack Teachers' Association ● Burns Lake District Teachers Union ● Canfor Corporation ● Council of Forest Industries ● Supply Chain Management Association ● Greater Victoria Chamber of Commerce ● Canadian Union of Public Employees - British Columbia Division ● Independent Contractors and Businesses Association of BC ● Aware360 ● adMare BioInnovations ● The University of British Columbia Graduate Student Society ● Rick Hansen Foundation ● Surrey Fire Fighters' Association ● Mitacs Inc. ● Brookfield BRP Canada Corp. ● Canopy Growth Corp. ● LNG Canada Development Inc. ● Futurpreneur Canada ● Guide Outfitters Association of British Columbia ● Federation of Mountain Clubs of British Columbia ● British Columbia Dairy Association ● Pfizer Canada ULC ● Canadian Credit Union Association ● Disability Alliance BC ● Canadian Home Builders' Association of BC ● Investment Industry Regulatory Organization of Canada

BC Today is written by Shannon Waters, reporting from the British Columbia Legislative Press Gallery.

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