B.C.’s deficit rises to nearly $13.8B after first quarter report released

B.C.’s deficit rises to nearly $13.8B after first quarter report released

Published 4:19 pm Monday, September 14, 2026

B.C.’s deficit is now projected to hit a new record of nearly $13.8 billion in the 2026/27 fiscal year, up $450 million from the amount projected when the budget was released in February.

The provincial government continued to blame outside economic factors.

“B.C.’s economy is navigating a period of significant global uncertainty,” said Finance Minister Josie Osborne, who took over the role from Brenda Bailey in mid-August and presented her first fiscal update on Monday, Sept. 14.

The province brought in $887 million more in income tax revenue than expected when the budget was written, but this was almost entirely offset by an additional $614 million needed to fight wildfires.

The Finance Ministry also adjusted provincial revenue downward after discovering an accounting error that overstated natural gas royalty revenues. This revision decreased revenue by nearly $1.5 billion over five years.

Many major economic indicators are also going in the wrong direction this year in British Columbia, which Osborne blamed primarily on the expanding trade dispute with the United States and the economic impact of the war in Iran.

The fiscal projections released on Monday account for the latest round of U.S. tariffs, which placed a 50-per-cent levy on nearly $30 billion in Canadian products, but do not include Canadian countermeasures.

“We are amidst significant headwinds, trade uncertainty, changing U.S. tariffs, conflict in the Middle East, and tightening federal immigration policy that’s led to a decline in population here in B.C.,” Osborne said.

As of August, jobs are down 16,400 for the year, pushing the unemployment rate up 0.4 percentage points to 6.5 percent. Population is down 0.9 per cent, inflation is up to 2.9 per cent, housing starts are down 9.3 per cent, and home sales are down six per cent.

Projected overall real GDP growth was downgraded from 1.3 per cent to 0.9 per cent.

On the brighter side, B.C. increased worldwide exports by 4.2 per cent, despite a 6.2-per-cent cut in U.S.-bound exports. Retail sales also grew 1.9 per cent.

The deficit is now forecast at nearly $12.2 billion for 2027/28, and projected at almost $11.5 billion for 2028/29.

This will push the province’s debt sky-high, now expected to exceed $235 billion in 2029.

Peter Milobar, who leads an as-yet-unnamed breakaway party from the B.C. Conservatives, called the quarterly report a “pretty depressing read.”

“It clearly demonstrates that this government simply does not have control over how to bring the financial situation of British Columbia under control,” he said.

Milobar notes that spending continues to soar even though the province has recently put off or cancelled many major infrastructure projects, from a hospital expansion in Burnaby to several planned long-term care homes.

While the government has blamed tariffs for provincial fiscal woes, Milobar points out that the NDP passed a signature piece of tariff-response legislation nearly a year and a half ago, but has not used it.

“Their actions are not matching up with what is actually needed to try to get the economy going,” Milobar said.

Premier David Eby recently said this was because the federal government is taking the lead in tariff response, and the bill, commonly known as Bill 7, has now sunsetted.

The Greater Vancouver Board of Trade called the fiscal outlook “bleak” and pressed for a more “disciplined” approach.

“The quarterly update makes it clear that B.C.’s finances are structurally out of balance,” Board of Trade President Bridgitte Anderson said in a news release. “Repeated warnings about the state of provincial finances have not been heeded, and spending is still growing faster than the economy that pays for it.”

B.C. Conservative Finance Critic Gavin Dew piled on, putting it succinctly in a written statement, saying the province seems to have a “spending problem and a math problem.”

“The government is collecting more tax revenue and still can’t keep the books under control,” he said.