The B.C. government is projecting a 6.2 per cent drop to the economy in 2020, and three per cent growth in 2021 as part of a soft recovery. That’s a conservative outlook and the province will likely do better, said Jock Finlayson, executive vice-president of the Business Council of B.C.
Part of the spending growth that is boosting B.C.’s budget is the $15 billion in aid that Ottawa has spent in B.C., including the $2,000 monthly emergency benefit called CERB.
“There was a lot of extra cash shovelled into the province, much of which went to people who weren’t even impacted by the pandemic,” said Finlayson. “So that bolstered savings rates and has given a lot of households more spending capability than before the pandemic.”
That’s registering on the provincial books when combined with middle-to-upper-earning households that have saved money by not going on vacation and eating out less, he said.
“A lot of people are finding themselves relatively flush with cash in 2020,” said Finlayson. “It’s one of the ironies in this COVID recession period. That has shown up in a rebound in retail sales and relatively high transactions in housing.”