B.C. continues to lead country in credit ratings from major international ratings agencies
THE strength of B.C.’s economy and the resilience of British Columbians has helped to keep provincial finances on more stable ground during one of the most challenging times in the province’s history, the Province said on Wednesday.
As the provincial government responded to people’s need for income support, business grants, tax breaks and crucial services during the pandemic, British Columbia ended the 2020-21 fiscal year with continued strong credit ratings and a lower-than-projected deficit of $5.5 billion.
“We are on solid fiscal ground because British Columbians have done the right thing – protecting all of us by getting vaccinated and practising safe distancing throughout the pandemic,” said Selina Robinson, Minister of Finance. “People’s diligence around the provincial health officer’s guidance has meant we were able to keep much of our economy open. Strong recovery in many sectors has allowed us to shift from the broad-based support provided during the uncertainties of last year to a more targeted approach for those suffering the greatest effects as the pandemic progressed.”
The year-end deficit is $2.7 billion lower than projected in Budget 2021. This is attributed to some sectors of the economy faring better than worst-case scenarios, which resulted in lower-than-expected spending and higher-than-expected revenues.
Spending on COVID-19 support and recovery programs reached $10.1 billion by the end of March 2021.
Overall, the Province’s expenses increased by $8.6 billion over fiscal 2019-20, with increased investments in health, community supports, K- 12 education and social services. Revenue increased by $3.5 billion over revenues in 2019-20. Much of the higher revenues can be attributed to some sectors proving resilient during the pandemic, federal contributions for COVID-19 support and more savings and higher earnings at ICBC.
While a provincial deficit is expected for the next several years due to the severity of the pandemic’s impacts and the need to support people and businesses to seize the opportunities that recovery will offer, the ministry is forecasting declining deficits over the next three years.
Public Accounts 2020-21 show B.C. is in good financial standing, with affordable debt levels at the end of the fiscal year. British Columbia continues to lead the country in credit ratings from the major international ratings agencies.
Public Accounts on the previous fiscal year are a vital part of ensuring transparency and accountability within government’s finances. The next report on provincial finances will be the first quarterly report in September.
Public Accounts 2020-21
The B.C. government releases Public Accounts every summer to provide people with an accounting of provincial revenues and expenses from the previous year.
Public Accounts 2020-21 outlines the extraordinary spending needed to help people deal with how the pandemic affected their lives, and the impact on the Province’s finances as COVID-19 pushed economies all over the world into deep recessions.
* Following growth of 2.8% in 2019, B.C.’s economy declined by an estimated 3.8% in 2020. Despite this, B.C.’s gross domestic product (GDP) was better than the national average decline of 5.3%.
* B.C. ended the year with a $5.5 billion deficit – $2.7 billion less than projected when Budget 2021 was presented in April.
* Employment decreased by 6.6% in 2020, raising B.C.’s unemployment rate last year to 8.9%, lower than the national rate of 9.5%.
* Taxpayer-supported debt to GDP is 20.2%, the second lowest in the country, even after significant investments in pandemic supports and capital infrastructure.
* B.C. continues to have among the best debt metrics and the best credit ratings in the country, keeping the Province’s borrowing costs for capital projects and other critical measures more affordable.
* The Public Accounts show the changes government is making to reform ICBC are stabilizing the public auto insurer. The total net income of ICBC in 2020-21 was $1.5 billion, a $1.9-billion improvement over the previous year’s net loss of $376 million.
COVID-19 pandemic spending
* The pandemic response and recovery programs totalled $10.1 billion during the year. This included:
* $2.57 billion on health, mental health, child care, temporary housing and essential services;
* $2.9 billion on financial supports for people, such as the BC Recovery Benefit and the BC Emergency Benefit for Workers, temporary rent supplements, supports for people requiring income and disability assistance and the Canada Emergency Commercial Rent Assistance program;
* $1.3 billion for economic recovery measures, such as job creation and training, community infrastructure projects and social supports;
* $1.86 billion for federal-provincial safe restart programs;
* $1 billion for statutory spending on measures related to the Emergency Program Act, housing for vulnerable people, pandemic pay and tax credits; and
* $342 million through reprofiled government programs to address workforce development and adaptation, technology support and protective equipment.
* While provincial expenses significantly increased and provincial taxation revenue dropped as government delivered pandemic response and recovery programs, provincial revenues were higher than expected due to federal government one-time pandemic contributions. This helped to offset impacts on provincial finances.
* The operating result for the fiscal year ending March 31, 2021, is a deficit of almost $5.5 billion, an improvement of $2.7 billion from the 2020-21 numbers presented with Budget 2021.
* Public Accounts for 2020-21 includes $5.4 billion in taxpayer-supported infrastructure spending on hospitals, schools, post-secondary facilities, clean-infrastructure projects, transit and roads. This includes:
* $1.848 billion to build, upgrade and modernize K-12 and post-secondary schools;
* $1.392 billion in B.C.’s transportation network; and
* $1.162 billion on key health facilities.
* Total capital spending was $1.7 billion below the Budget 2020 projection due to project scheduling changes.
* As of March 31, 2021, the total provincial debt was $87.1 billion, an increase of $14.9 billion in 2020-21.
* About 31% of the total debt is self-supported through commercial Crown corporation activities.
* The taxpayer-supported debt-to-GDP ratio, a measure often used by investors and credit rating agencies to analyze governments’ ability to manage debt loads, stood at 20.2%.
* The Province of B.C. has the second-lowest taxpayer-supported debt to GDP in Canada, after Saskatchewan.
* B.C. spent 3.1 cents of every revenue dollar toward taxpayer-supported debt last year, the lowest in Canada.
* B.C. continues to have among the best debt metrics and the best credit ratings in the country. This is keeping the Province’s borrowing costs for capital projects and other critical measures more affordable.
Public sector executive compensation for 2020-21
The B.C. government is committed to building a strong, inclusive and sustainable economy by investing in infrastructure and programs that support opportunity for all.
B.C. is not alone in facing the challenges of COVID-19, but with the support of a strong public sector, the crisis is being faced head-on by investing in British Columbians and delivering the services on which they depend.
This is the 14th year that the Ministry of Finance has disclosed the total compensation paid to senior management employees working in key decision-making positions across B.C.’s public sector. The annual disclosure reflects the compensation decisions made prior to March 31 for the fiscal year of 2020-21.
Public sector executives lead in the innovation and delivery of services that support communities in every corner of the province as historic investments in health, housing, child care and infrastructure are delivered.
Total compensation paid to executives at B.C. public sector organizations reflects their responsibilities in delivering on government’s commitment to improving the public services people depend on, making life more affordable and building a strong, inclusive, sustainable economy for the people of this province.
B.C. is a national leader in its reporting standards for executive compensation, which includes base pay, pensions, benefits, merit/performance pay/holdbacks and an explanation of the compensation paid.
Disclosure statements can be found on the websites of the employers, as well as the Public Sector Employers’ Council Secretariat:
2020-21 Top 10:
1. Thomas Bechard, president and CEO, Powerex
All other compensation: $0
Total compensation 2020-21: $934,521
Total compensation 2019-20: $937,845
2. Santa J. Ono, president and vice-chancellor, University of British Columbia
All other compensation: $73,005
Total compensation 2020-21: $611,712
Total compensation 2019-20: $605,225
3. Chris O’Riley, president and CEO, BC Hydro
All other compensation: $60,989
Total compensation 2020-21: $590,114
Total compensation 2019-20: $566,084
4. Brenda Leong, chair, BC Securities Commission
All other compensation: $8,983
Total compensation 2020-21: $527,004
Total compensation 2019-20: $515,203
5. James Hamilton, president, Okanagan College
All other compensation: $251,450
Total compensation 2020-21: $495,493
Total compensation 2019-20: $249,030
6. Benoit Morin, president and chief executive officer, Provincial Health Services Authority
All other compensation: $79,176
Total compensation 2020-21: $479,814
Total compensation 2019-20: $62,880
7. Nicholas Jimenez, president & chief executive officer, Insurance Corporation of BC
All other compensation: $4,445
Total compensation 2020-21: $467,905
Total compensation 2019-20: $474,680
8. Andrew Szeri, vice-president academic and provost, University of British Columbia
All other compensation: $2,000
Total compensation 2020-21: $456,034
Total compensation 2019-20: $452,374
9. James Cassels, president and vice chancellor, University of Victoria
All other compensation: $166,768
Total compensation 2020-21: $451,917
Total compensation 2019-20: $443,207
10. David Wong, executive vice-president and chief financial officer, finance, tech, supply chain, BC Hydro
All other compensation: $3,455
Total compensation 2020-21: $447,158
Total compensation 2019-20: $437,755
Note: Total compensation includes base salary, performance-based holdback or merit pay, statutory and health benefits and pension contributions, as well as other allowances and/or payments, such as unused vacation, sick leave payout, vehicle allowance, paid parking, lump sum severance or salary continuance, retirement allowance, professional fees and administrative leave.