B.C. government's per-resident spending hits record high under Premier Eby | Daily Hive

B.C. government's per-resident spending hits record high under Premier David Eby

David Eby. (Government of B.C.)

Provincial government spending per resident in British Columbia is projected to reach its highest level on record in 2025, according to a new study that traces 60 years of fiscal history across 12 successive premiers.

The report analyzes inflation-adjusted, per-person program spending in B.C. from 1965 to 2025. By adjusting for both population growth and inflation, it provides a clearer picture of how provincial government spending has evolved over time and how different premiers have shaped provincial fiscal policy.

According to the analysis published today by the Fraser Institute, per-person program spending is expected to reach $13,711 in 2025 under BC NDP Premier David Eby, surpassing all previous peaks in the six decades of data.

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This figure reflects spending on core government programs and services — excluding interest payments on public debt, which the report asserts are heavily influenced by factors outside the sitting premier’s immediate control.

The report shows that provincial spending per resident has risen dramatically over the past six decades, particularly under the BC NDP’s governance for nearly the past decade.

bc premier provincial per capital spending

Fraser Institute

In 1965, inflation-adjusted per-person spending stood at $3,404. By comparison, projected 2025 spending is more than four times higher, underscoring what the report describes as a sustained expansion in the scale of provincial government activity.

However, the increase has not been uniform. Periods of rapid growth, moderation, and even decline can be traced to different political eras and economic conditions. The steepest early increases occurred during the late 1960s and early 1970s, particularly under Social Credit party Premier W.A.C. Bennett and his BC NDP successor David Barrett. Under Barrett’s three-year tenure in the early 1970s, per-person spending rose by more than 50 per cent, driven by large year-over-year increases in 1974 and 1975.

W.A.C. Bennett, the longest-serving B.C. premier, a tenure spanning 20 years through 1972, made some of his biggest policy and spending moves later into his premiership, including creating the provincial Crown corporations of BC Ferries and BC Hydro, building some of the province’s largest hydroelectric dams on the Peace River and Columbia River, expanding the network of highways and BC Rail’s railways across the province, and creating Simon Fraser University and the University of Victoria.

During his short three-year premiership, Barrett fundamentally changed how and how much the provincial government provided public services, including creating public auto insurance by launching the Crown corporation of ICBC, expanding healthcare services and medical coverage, and introducing new social programs.

By contrast, the late 1970s and early 1980s saw a mix of spending restraint and increases under Social Credit Premier Bill Bennett, including a notable decline in his first year in office, followed by several years of growth and subsequent reductions during the recession in the early 1980s. His premiership is often associated with staging the Expo ’86 World’s Fair, building the initial SkyTrain line, the Coquihalla Highway, and BC Place Stadium.

To provide additional perspective, the report ranks premiers based on their average annual change in per-person spending over their time in office. Barrett ranks highest, with an average annual increase of 14.6 per cent, well ahead of all other premiers in the study. The months-long premiership of Rita Johnston ranks second at 6.1 per cent.

More recent premiers show more moderate but still significant increases. Former BC NDP Premier John Horgan ranks fourth overall, with an average annual increase of 5.2 per cent. His tenure coincided with substantial spending growth, particularly during the pandemic, when emergency measures and public health expenditures drove sharp increases in provincial spending.

Under Eby, per-person spending is projected to rise by an average of 1.1 per cent annually. While this rate is lower than that of several predecessors, the absolute spending level under Eby is projected to exceed all previous records, reflecting the cumulative effect of earlier increases.

Fraser Institute

Not all premiers oversaw spending growth. The report identifies three periods in which average annual per-person spending declined: under Michael Harcourt, Glen Clark, and Ujjal Dosanjh of the BC NDP. Dosanjh’s one-year tenure recorded the steepest decline, at 2.6 per cent, though the report cautions that short tenures can exaggerate year-to-year changes.

At the start of the millennium, Gordon Campbell of the BC Liberals presided over a mixed period for provincial spending, marked by early restraint followed by steady growth.

According to the report, inflation-adjusted per-person program spending declined during the first half of Campbell’s tenure, falling by 2.8 per cent between 2001 and 2004 as his government implemented spending reductions. This period coincided with broader fiscal consolidation efforts after Campbell’s Liberals took office, including a 25 per cent cut to personal income taxes across all income brackets upon entering office, selling Crown corporation BC Rail’s assets to CN Rail, and transitioning BC Ferries from a Crown corporation to a provincially-owned private company.

However, the latter half of Campbell’s tenure saw a reversal of that trend. From 2005 through 2010, per-person spending increased nearly uninterrupted, rising by 10 per cent to reach $9,984 by the end of his time in office. Campbell is often associated with building major capital projects — SkyTrain’s Canada Line, Vancouver Centre Centre’s expansion building, the Sea to Sky Highway upgrade, and the new Port Mann Bridge and Highway 1 widening between Vancouver and Surrey — and the 2010 Winter Olympics.

Overall, Campbell recorded an average annual increase of 1.5 per cent in per-person spending, placing him in the middle of the rankings among B.C. premiers.

BC Liberals’ Christy Clark’s tenure, by contrast, was characterized by relative spending stability rather than growth.

The report shows that inflation-adjusted per-person spending declined slightly over her time as premier, falling by 0.2 per cent from the final year of the Campbell government to her last budget in 2016, when spending stood at $9,960 per person. On an average annual basis, Clark’s record amounts to essentially no change, with spending flat at zero per cent growth per year. This places her among the few premiers whose tenure did not see an overall increase in per-person spending, alongside Bill Bennett. The findings suggest that Clark’s government largely maintained existing spending levels rather than significantly expanding or contracting the size of provincial programs.

It is emphasized that the report is intended as a historical and analytical overview rather than a judgment on whether spending levels were appropriate. By focusing on per-person, inflation-adjusted figures, the study aims to isolate policy choices from external pressures such as population growth and rising prices.

The analysis is based on provincial public accounts data and includes spending approved by the legislature, covering major sectors such as health care and education. Data for 2025 are projections derived from the province’s fiscal plan, meaning final figures may differ once public accounts are released.

The report concludes that inflation-adjusted per-person spending is a critical but often overlooked measure of fiscal policy. While government spending is frequently discussed as a share of GDP, the report states that per-person figures provide a more intuitive sense of how much provincial government activity each resident supports over time.

With provincial spending projected to remain near historic highs, the findings are likely to fuel ongoing debates over fiscal sustainability, public service delivery, and the appropriate role of the provincial government.

Current headwinds and policy choices

Eby’s record-high budget deficits contributing to provincial debt are the result of record-high spending levels, weaker-than-expected revenues from a challenging economic, business, and real estate climate, and lingering post-pandemic fiscal effects, including market inflation of labour and capital costs — combined with a deliberate choice to sustain public services rather than pursue immediate and drastic fiscal belt tightening. Revenue growth has weakened — partly due to Canada-U.S. trade challenges — at the same time, spending has increased.

Healthcare costs have skyrocketed since the pandemic, which continues to rise faster than inflation due to an aging population, major staffing shortages, and labour agreements. As well, pandemic-time spending expansion has now become entrenched in healthcare and public services.

Generally, while capital costs for construction do contribute to overall provincial costs — especially those funded by borrowing, with ongoing interest payments — the main drivers relate to increases to operating costs, which often become a structural component of the budget, returning each and every year as an added layer to the cake of costs.

Eby’s wide range of major housing initiatives in a bid to improve affordability has also added strain to the provincial budget. Additionally, the provincial government under Eby has significantly increased capital spending on building new, improved, and expanded public schools and hospitals, as well as major transportation infrastructure projects, such as the SkyTrain extension projects of the Broadway extension and Surrey-Langley extension, the new Pattullo Bridge, Highway 1 widenings in the Lower Mainland, highway repair and upgrade projects following the 2021 floods and landslides, and the upcoming George Massey Tunnel replacement.

Over the last few years, interest costs have also increased sharply. While program spending excludes debt interest, deficits do not. Rising interest rates have significantly increased the cost of servicing existing debt and new borrowing. Even if program spending growth moderates, higher interest payments can push overall deficits higher, especially when borrowing is used to finance large capital and operating commitments. It should be re-emphasized that the Fraser Institute’s report did not account for interest payments.

Reconciliation-related spending and policies directly for the benefit of First Nations have also risen. As well, there are also further uncertainties over how court decisions relating to Aboriginal title land claims and other rulings related to provincial authority could further impact the already challenging economic and investment sentiment in B.C.

Late last year, Eby suggested the provincial government could potentially provide $150 million as a backstop for property owners in southeast Richmond impacted by the Cowichan Tribes’ land claim and forthcoming years-long appeal process, with some critics suggesting $1 billion may be needed for the entire claim area. There are similar title claims going through the legal process impacting other private and public properties elsewhere in B.C.

In the provincial government’s most recent fiscal update made in September 2025, it was indicated that the forecast deficit for the 2025/2026 fiscal year had grown to a record $11.6 billion — up by $665 million compared to earlier estimates. It was stated then that the deficit is expected to reach $12.6 billion in 2026/2027, followed by a slight decrease to $12.3 billion in 2027/2028.

Due to such annual deficits, the provincial government’s debt is expected to rise from just under $134 billion in 2024/2025 to over $155 billion in 2025/2026. Total debt has risen from $89.4 billion in 2022/2023, when Eby first took office, and from about $66 billion in 2019/2020, with that fiscal year ending in March 2020 just a few weeks after the pandemic’s onset.

In 2025, the world’s largest credit agencies downgraded the provincial government’s credit rating for a second year in a row.

The provincial government is expected to release its 2026/27 budget later in February 2026. The previous 2025/26 budget was relatively austere compared with earlier post-pandemic budgets.

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