Commentary
By Tegan Hill and Grady Munro
According to last week’s fiscal update, the David Eby government will record a staggering $11.2 billion budget deficit this fiscal year (2025/26).
And while the government continues to blame U.S. tariffs, the true cause of this fiscal disaster is simple—out of control spending.
Consider this. In its first official budget in 2023, the Eby government projected program spending (total spending minus debt interest costs) to be $80.6 billion in 2025/26. In this latest update, that number has jumped to $89.9 billion—an increase of more than 11 per cent.
You can’t explain this jump in spending by pointing to inflation or a growing population. After adjusting for both factors, program spending is expected to be a whopping $1,624 per person higher this fiscal year than the government originally planned in 2023.
And again, Premier Eby also can’t blame U.S. tariffs. Consider last fiscal year (2024/25), which was largely over before tariffs took effect. Originally, Eby’s budget in 2023 projected program spending would be $79.3 billion in 2024/25. In the following year’s budget, that projection jumped to $85.3 billion. And when the final numbers were tallied, the Eby government actually spent $87.1 billion in 2024/25, which was an overall jump of $7.8 billion—nearly the exact size of the deficit that year ($7.3 billion). After adjusting for inflation, spending was $1,419 higher per person in 2024/25 than projected in the 2023 budget.
Part of the explanation is an explosion in the size of the B.C. government. For perspective, from 2019 to 2023, private-sector employment in B.C. increased by only 12,000 jobs while the number of government jobs—provincial, federal, local—in the province increased by 102,100. Given these government workers tend to earn relatively high wages and enjoy cushy pensions, the boom in government employment has undoubtedly helped fuel spending growth.
It's no wonder Premier Eby has recorded some of the highest levels of per-person (inflation-adjusted) spending on record. And if it doesn’t stop soon, there’s no telling how bad things could get.
According to the update, total provincial debt will skyrocket from $89.4 billion in 2022/23, when Eby first took office, to $155.1 billion this fiscal year. That means more taxpayer money will go towards government debt interest rather than services for British Columbians. Indeed, debt interest costs will reach a projected $5.1 billion by 2025/26—that’s nearly $900 per person that could have gone towards health care, education or even tax relief. Instead, those tax dollars will be paid to bondholders.
The recent fiscal update is further evidence of the Eby government’s spending problem. The government can blame tariffs all it wants, but until it accepts accountability and changes course, it will continue to cost British Columbians.
Tegan Hill is Director, Alberta Policy at the Fraser Institute. Grady Munro is a Policy Analyst at the Fraser Institute.
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