British Columbia is facing a significant financial challenge with a forecasted deficit reaching a record high of nearly $11.6 billion for the first quarter of the 2025-2026 fiscal year. This spike in deficit is primarily attributed to the removal of the carbon tax and concerns surrounding “global trade uncertainty.”
Finance Minister Brenda Bailey has revised projections, anticipating even larger deficits until 2028 as economic growth slows down. The province’s debt is expected to surge by approximately $60 billion over the next two fiscal years.
Bailey’s latest fiscal update paints a dimmer picture, downgrading gross domestic product growth to 1.5% in 2025 and 1.3% in 2026. The projected deficit now exceeds the initial estimate by almost $700 million, surpassing the government’s previous forecast of $10.9 billion.
Looking ahead, deficits are set to climb by around $2.5 billion annually over the next two fiscal years compared to the provincial budget projections. It is anticipated that the deficit will reach $12.6 billion in 2026-2027 and $12.3 billion in 2027-2028. By 2027-2028, British Columbia’s debt is projected to surpass $212 billion, a substantial increase from the current $155 billion.
Despite these challenging financial indicators, Bailey remains optimistic about B.C.’s economic resilience in the face of global trade volatility.
The Canadian Federation of Independent Business has sounded the alarm, urging the province to exercise “fiscal discipline” and curb spending in response to the escalating deficit.
Keyphrase: British Columbia deficit forecast