Opinion: B.C. has the least sustainable government finances of all provinces
By Ben Eisen and Tegan Hill
In recent years, the British Columbia government has run large budget deficits and racked up massive amounts of debt. However, British Columbians may not be fully aware of the sheer scale of the damage and the speed at which the province is careening towards fiscal disaster. According to two recent reports, B.C. is on track to become one of the biggest debtor provinces in Canada.
Start with this year’s annual report from the Parliamentary Budget Office (PBO), a budget watchdog that delivers annual updates on the sustainability of government finances across Canada. Not that long ago, in the mid-2010s, B.C. was in the PBO’s top half of provinces in terms of long-term fiscal health.
This year’s report, published on Aug. 28, tells a very different story. B.C. has the least sustainable government finances among all provinces. Which means that unless the provincial government raises taxes, it must reduce spending substantially to avoid increasing the province’s debt burden relative to the size of its economy. Simply put, the government’s current approach to spending is unsustainable without future tax hikes or service cuts.
Meanwhile, British Columbians continue to pay a lot to merely finance the existing debt load. This fiscal year (2024-25), debt interest costs are more than $700 per person and are projected to rise to nearly $1,000 per person by 2026-27.
The Fraser Institute has just published a new report (co-authored by one of us) that tells a similar story. Even though B.C. was recently one of the least indebted provinces in Canada, it’s on track to become one of the highest-debt provinces by 2029-30. Five years ago, the B.C. government’s net debt was $9,175 per person. But if it continues on
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