B.C. budget deficit balloons to record $11.6B
Things are looking grim for the B.C. budget, as the province announced a record deficit of $11.6 billion for the 2025-2026 fiscal year.
The update was provided by Finance Minister Brenda Bailey on Monday, who said in a statement that while the province’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.”
According to the province, the updated first-quarter report forecasts a $11.6 billion deficit, $665 million higher than the previously expected amount. However, it added that the 2025-2026 budget was “mitigated” by a boost in corporate income tax revenues, as well as the province receiving its initial share of the $32.5-billion lawsuit against tobacco companies.
The outlook for the next few years isn’t any better. For the 2026-2027 period, the deficit is expected to reach $12.6 billion, followed by a slight decrease to $12.3 billion in 2027-28.
The province noted that the fiscal update reflects the impact of the government’s decision to scrap the consumer carbon tax this past spring.
It also factored in a loss of revenue sources, including property transfer tax, sales tax, natural resources, government contributions, and costs related to fire management.
Earlier this year, two of the world’s largest credit rating agencies also downgraded the provincial government’s credit rating for a second year in a row.
Bailey said in a release that despite the province’s challenges, the government remains “focused with [its] spending, making smart decisions where [it] can.”
B.C’s job market is also experiencing a major downturn. In September, the latest Labour Force Survey from Statistics Canada showed that B.C. suffered one of the largest employment declines in Canada in August.
According to StatCan, employment in the province decreased by 16,000 jobs, or 0.5 per cent. It is the second consecutive month of job losses in B.C., with the unemployment rate rising to 6.2 per cent.
While the province has been grappling with its economic outlook, Premier David Eby’s approval rating has also struggled.
Data from a recent Angus-Reid Institute survey, published on Sept. 9, found that Eby’s approval rating has dropped to 41 per cent — down five points from June and 12 from March.
Angus Reid noted that this is the lowest rating Eby has received since being in office, and he has the second-lowest approval rate amongst Canada’s other premiers, tied with Ontario’s Doug Ford.
With files from Daniel Chai and Kenneth Chan