BC to Cut 15,000 Jobs But Spending and Debt to Rise Anyway

By Thomas Seal – Bloomberg

British Columbia, Canada’s third-most populous province, will chop 15,000 public sector jobs, increase income taxes and delay investments, but its left-leaning government avoided making deep cuts to sprawling spending plans and expects debt to continue rising.

“This is not an austerity budget,” BC Finance Minister Brenda Bailey said at the province’s annual fiscal update in its capital city, Victoria.

BC expects a deficit of C$9.6 billion ($7 billion) in the current fiscal year, ending March 31. Despite a hiring freeze and spending review, that shortfall is forecast to grow to more than C$13 billion in the next fiscal year.

“You can’t cut your way out of a deficit,” Bailey added, defending a plan that sees annual expenses rise C$8.5 billion by 2029, driven by spending in key ministries like health, which accounts for a third of the budget.

Debt will increase to C$234.6 billion by early 2029, from around C$154.1 billion today. That means 8.2 cents of every dollar in revenue will be spent on interest, compared with 4.9 cents this year.