British Columbia's financial landscape has undergone a dramatic transformation under Premier David Eby, according to a budget update released Thursday by Finance Minister Brenda Bailey. The update confirms a staggering reversal in the province's fiscal position compared to just three years ago.
From Surplus to Record Deficit
The financial comparison between the current Eby government and its predecessor reveals one of the most significant turnarounds in British Columbia's fiscal history. John Horgan's final budget update in November 2022 showed a substantial surplus of nearly $6 billion, representing the strong financial foundation Eby inherited when he took office.
In stark contrast, Eby's latest projection shows an $11 billion deficit for the current year. This represents a $17 billion negative swing within just three years - a reversal that veteran financial observers describe as unprecedented in over four decades of covering provincial finances.
Accounting Questions and Debt Accumulation
The actual deficit situation might be even more concerning than the numbers suggest. Bailey managed to limit the deficit to $11 billion only by counting approximately $2 billion from future tobacco settlement payments as current revenue. This accounting treatment has drawn criticism from the province's independent auditor general, who questions counting money that won't fully arrive for another 18 years as immediate cash.
The debt accumulation under Eby's leadership has been equally dramatic. Total provincial debt has surged from $90 billion under Horgan to $155 billion today - a 75 percent increase achieved in just three years. While the government points to capital projects like schools and hospitals as justification, the budgetary details tell a more complex story.
Operating Deficits Drive Debt Growth
Contrary to government messaging emphasizing infrastructure investment, approximately half of the $65 billion debt increase ($32 billion) stems from operating deficits rather than capital projects. This indicates that day-to-day program spending exceeding revenues constitutes a major driver of the province's deteriorating financial position.
The consequences of this debt accumulation are becoming increasingly apparent in the provincial budget. Debt servicing costs have nearly doubled from $2.7 billion annually under Horgan to $5.1 billion today, making interest payments the government's second-largest expenditure after healthcare.
Perhaps most remarkably, despite this substantial debt accumulation, the Eby government has achieved comparatively limited tangible outcomes relative to the financial resources expended, raising questions about spending efficiency and fiscal management during a period of economic uncertainty.
