The NDP may have lost its hard-won reputation as a competent fiscal manager under B.C. Premier David Eby.DARRYL DYCK/The Canadian Press
The finances of British Columbia have taken a stunning turn in recent years. The province’s debt load, which had been relatively stable, is soaring, outpacing economic growth.
As the accompanying chart shows, the dollar value of the province’s debt is projected to more than double over a half-decade, rising to $208.8-billion from $89.4-billion. And the ratio of debt to the province’s gross domestic product will surge as well, nearly doubling over that same span. Unsurprisingly, the province’s credit rating has been downgraded repeatedly.
What happened in Year 5 to trigger this fiscal calamity, you might ask? Perhaps the economic crisis sparked by the pandemic? Or maybe it was Donald Trump’s global trade war?
Neither – the answer is the arrival of David Eby as Premier in the fall of 2022, succeeding John Horgan. That year, fiscal 2022-23, was the last year of the relative fiscal sobriety of Mr. Horgan’s BC NDP government. Now, British Columbia is on a dangerous fiscal path, as last week’s release of the fiscal 2025 public accounts makes clear. Under Mr. Eby, the NDP has lost its hard-won reputation as a competent fiscal manager.
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Under the late Mr. Horgan, the NDP most certainly spent but did so with an eye to fiscal stability, a sharp contrast to the big-deficit ways of 1990s NDP governments. The pandemic, of course, resulted in a big deficit in fiscal 2021-22, but the provincial government returned to surplus the very next year.
Mr. Horgan bequeathed a solid fiscal record to his successor, including what should have been a substantial surplus in fiscal 2023. But Mr. Eby has squandered that inheritance, beginning with a reckless decision within months of taking office to hurriedly spend $3-billion in the spring of 2023. Otherwise, horror of horrors, those billions would have had to gone to paring down the province’s debt.
Since then, the deficit has soared and is projected to hit $10.9-billion in the current fiscal year. That is likely a best-case scenario. The budget was released before Mr. Trump’s tariff war got into full swing, and before Mr. Eby axed the provincial carbon tax. Both of those factors promise to swell the deficit further, particularly if the government does not cashier the climate-change programs meant to be funded by the carbon tax.
In response to the dismal fiscal picture emerging from the public accounts, the Eby government essentially shrugged. The finance ministry did note that the deficit for last year was $564-million smaller than originally forecast. True enough – but what the ministry did not say is that the deficit could have been $2-billion smaller if the government had simply stuck with the (big) spending plans laid out in the 2024 budget.
There was similar tip-toeing around inconvenient facts when the ministry touted B.C.’s relatively low debt-to-GDP ratio compared to other provinces. Again, that is true. But the boast ignores the reality that the Eby government is fast eroding that advantage. In fiscal 2023, B.C.’s taxpayer-supported debt equaled 15.1 per cent of provincial GDP, not much higher than fiscal 2020, before a wave of pandemic deficit spending.
But under the Eby government, that ratio hit 23.2 per cent in fiscal 2025 and is projected to spike to 34.4 per cent by fiscal 2028. That fact alone would be bad enough news for B.C. taxpayers.
Even worse is that the government has no plan, at least not one shared publicly, to reverse course. The finance ministry, in an email, said the government has a spending review under way that will save $1.5-billion over three years and that the size of the public service will not “materially change” over that period.
That response is grossly inadequate, particularly considering the growth in spending and in the size of the public service under the Eby government.
Any serious effort to get B.C.’S finances under control will have to involve reducing the number of civil servants, outright reductions in spending outside of core services such as health and, most importantly, a plan to balance the budget.
The longer that Mr. Eby waits, the harsher the fiscal reckoning will be. The inevitably painful ending to the NDP’s fiscal recklessness is no mystery at all.
Editor’s note: An earlier version of this editorial incorrectly reported that the three-year savings from a British Columbia government spending review would be $3-billion. This version has been corrected.