B.C. Government Faces Mounting Fiscal Crisis Ahead of 2026 Budget
With the British Columbia government set to table its 2026 budget on February 17, serious questions are emerging about the province's fiscal direction under Premier David Eby's administration. The government finds itself drowning in red ink, with unprecedented spending levels creating massive budget deficits and skyrocketing provincial debt that shows no signs of improving living standards for British Columbians.
Record Spending Fuels Unprecedented Deficits
The numbers tell a troubling story. From 1965 to 2025, the Eby government recorded the two highest years of per-person, inflation-adjusted spending in provincial history: $13,269 in 2024 and $13,711 in 2025. These figures exceed even the peak spending during the COVID-19 pandemic, demonstrating a pattern of fiscal expansion without corresponding benefits.
This unrestrained spending has directly fueled large budget deficits over the last two years. According to the government's latest fiscal update, the 2025-26 fiscal year will see the province post its third consecutive deficit—a staggering $11.2 billion. Meanwhile, total provincial debt is projected to skyrocket to $155.1 billion, representing a 74 percent increase during Eby's three years in office.
The consequences of this debt accumulation are already being felt. Interest payments on provincial debt will reach $5.1 billion, money that could otherwise fund essential services or provide tax relief to struggling British Columbians.
Declining Living Standards Despite Massive Spending
Perhaps most concerning is what British Columbians haven't gained from this spending spree. Living standards—as measured by inflation-adjusted per person GDP—have declined for two consecutive years (2023 and 2024). In 2024 alone, this measure shrank by 1.7 percent, representing the weakest growth of any province in Canada.
The economic pain extends across multiple indicators:
- Private-sector employment growth has stagnated
- Critical investment in machinery and equipment (as a share of the economy) has declined
- Growth in exports (inflation-adjusted per person) has weakened significantly
These patterns represent economic struggles not seen since British Columbia's "lost decade" of the 1990s, raising serious questions about the effectiveness of current fiscal policies.
Key Services Show No Improvement
Some might argue that massive government spending could be justified if it led to improved public services. However, the evidence suggests otherwise in British Columbia's two largest spending areas outside of government employee compensation: health care and education.
Despite record-high spending allocations:
- Health-care wait times have reached unprecedented levels
- Student test scores have declined in mathematics, science, and reading
- Student competency has dropped by more than a full grade level since 2012
This disconnect between spending and outcomes suggests fundamental problems with how resources are being allocated and managed within the provincial government.
The Burden on British Columbians
B.C.'s massive provincial debt ultimately functions as a tax on hard-working citizens. British Columbians finance government operations directly through taxes, or less visibly through inflation and higher interest rates that affect everyone's purchasing power and economic opportunities.
The threat of future tax increases to cover large deficits and service debt interest creates additional economic uncertainty. This environment deters investment and economic activity, creating a cycle that further impacts living standards throughout the province.
As the government prepares to table its next budget, British Columbians face a critical question: What have they actually gained from this unprecedented spending spree? The evidence suggests the answer is very little in terms of economic strength or improved public services.
The upcoming budget represents an opportunity for the Eby government to chart a new fiscal path—one that addresses the flood of red ink while focusing resources where they can actually improve the lives of British Columbians. The alternative is continuing down a path of debt accumulation without corresponding benefits for the province's citizens.
