British Columbia is facing the largest deficit in its history.
Finance Minister Brenda Bailey said today the Province is forecasting a gap of almost $11.6 billion between how much it spends and how much it raises.
That forecast – for the 2025–26 fiscal year – is $665 million higher than Bailey estimated in her March budget.
The cause, according to the Province, is declining revenues from property tax, the now-eliminated carbon tax, sales tax, the federal government and natural resources.
Fire management costs are also higher, the BC government said, though a fiscal boost has come courtesy of the province’s $2.7 billion share of a tobacco settlement.
"While BC's diversified economy is better positioned than many to weather these headwinds, there's no doubt that tariffs are challenging our economy and there is pressure on our fiscal position," Bailey said in a statement today.
"We're being focused with our spending, making smart reductions where we can, being strategic with our investments to drive economic growth and foster innovation to build a stable economic future for BC, and support the services people count on."
But the BC Conservatives are not so confident.
Finance Critic Peter Milobar, the MLA for Kamloops Centre, said the Province is overstating the damage caused by the US tariffs, adding: “The blunt [sic] of the damage has been caused by this government’s own decisions.”
He added: “We’ve seen over 70,000 people leave British Columbia, youth unemployment climb by 51,000, and business confidence hit rock bottom. These aren’t abstract numbers, they show that families, young people, and job creators no longer see opportunity here under this NDP government.
“That’s the real cost of mismanagement.”
Looking ahead, Bailey said she projects the trouble with the deficit will persist in the coming years.
In 2026-27, it’s predicted to be $12.6 billion, while 2027-28’s is forecast to be $12.3 billion.
That will bring the overall provincial debt to over $212 billion by 2027-28, according to the BC government.
It’s at $155 billion this year.
Bailey said growth is another source of gloom for BC, with the province’s economy expected to grow by 1.5 per cent in 2025 rather than the 1.8 per cent previously forecast.
Instead of 1.9 per cent growth in 2026, Bailey now forecasts 1.3 per cent growth.
But the finance minister said she had one positive bit of data to share: the debt-to-GDP ratio of 24.5 per cent.
That’s "significantly" lower than in Ontario and Quebec, she said, meaning BC’s debt “remains manageable compared to our peers.”
Milobar, however, pointed out that debt servicing – the government paying interest on its loans – is now the highest since 2005 and costs “five cents of every revenue dollar.”
“In a time of such uncertainty, the evasiveness from the minister on clear and important issues like the strike and lack of clarity on savings measures shows us that this government lacks a plan moving forward,” he said.
The Canadian Federation of Independent Business (CFIB) also expressed concern in response to Bailey’s announcement.
Ryan Mitton, CFIB’s director of legislative affairs in BC, said the “financial picture is deteriorating” in BC just as “small businesses need stability.”
He added: “A record-setting $11.6 billion deficit should be a wake-up call. Small business owners are tightening their belts and making hard choices every day. They expect government to show the same restraint.”
Mitton also said businesses “overwhelmingly reject tax hikes” as the answer to BC’s fiscal problems.
"Economic growth is the only sustainable way to bring down the deficit and fund vital public services," he said.
