On top of continuing to manage COVID-19, economists want B.C.’s upcoming budget to focus on the province’s path to post-pandemic prosperity.
Economic growth is critical to the province’s recovery and a source of much-needed revenue for paying down historic levels of government spending.
Beyond the rebound, this year’s budget provides an opportunity to ensure future growth supports B.C.’s social and sustainability goals and addresses issues of inequality.
“It’ll be one of the most important budgets that B.C. has had in a generation, because we are facing an unprecedented situation here with the pandemic, and we also have a really unique opportunity to do something different,” said Iglika Ivanova, senior economist and public interest researcher with the Canadian Centre for Policy Alternatives (CCPA).
“Given that we are going to see large public sector investment, the key challenge I think is to steer the direction of spending so that we restructure some of the fundamentals of the economy, so that we can address some of those long-standing systemic inequalities and racial injustice that the pandemic exposed.”
Ivanova points to further investment in affordable child care as an example of such a policy – one that could increase the participation of women in the workforce, which would in turn support a stronger economy.
Despite action by the provincial government on this issue, CCPA research shows that a number of cities – Surrey, Burnaby and Kelowna among them – saw notable increases in median child-care fees from 2019 to 2020.
A recent policy note co-authored by Ivanova argues in favour of moving toward a $10-a-day child-care plan and creating a multi-year capital budget for creating publicly owned child-care facilities. She would also like to see significant investments in seniors’ care and meaningful investments in training, education and reskilling in B.C.’s budget.
“I think it’s clear to everyone that for building economy, we need all hands on deck, and we need everyone to be working to their full potential.”
Ivanova added that upfront grants for students, tax credits and funding for institutions would help.
The BC Chamber of Commerce will be looking for measures that support resiliency and recovery in the upcoming budget. The former includes continued access to pandemic support; the latter includes investments in technology and innovation, in better broadband in B.C.’s north and in transportation infrastructure.
“The budget needs to enable a business environment that is more competitive and more innovative than the business environment pre-pandemic,” said Fiona Famulak, the chamber’s president and CEO. “We cannot be going back to the pre-pandemic days. We need to do better.”
The organization’s Big Thinking for Small Business three-part plan for economic recovery also calls for support of emerging economies, such as tourism and cannabis, and a value-added tax, which Famulak said “would really be a game-changer.”
Future prosperity can also be supported by measures that are intentionally excluded from B.C.’s budget.
“Fostering economic growth and job creation should be the primary focus of the 2021 provincial budget. The government should steer clear of tax and fee increases for now,” wrote Business Council of British Columbia senior policy analyst Jock Finlayson in a recent commentary. •