In recent years, many economists and policy analysts have sounded the alarm about British Columbia’s rapidly deteriorating provincial finances.
The province has gone from having some of the most sound finances in Canada a decade ago to the least sustainable finances of any province, according to the Parliamentary Budget Officer, Canada’s budget watchdog.
So how did we get here?
In short, debt has grown much faster under Premier David Eby than under any of his recent predecessors—specifically, by an annual average rate of $2,612 per year (inflation-adjusted) during his government’s two years at the helm. As a result, the B.C. government’s per-person debt burden increased by 44 per cent from 2022 to 2024 (when it eclipsed $17,000).
This rate of debt accumulation significantly outpaces all other 11 premiers since 1969. For example, while Rita Johnson, Mike Harcourt and Glen Clark rank second through fourth in terms of debt growth, under these three premiers B.C.’s per-person debt (inflation-adjusted) increased at less than half of Eby’s rate.
Why?
Because after a prolonged period of spending restraint during roughly the first decade and a half of this century under then-premiers Gordon Campbell and Christy Clark, the Horgan and Eby governments dramatically increased spending.
Indeed, from 2000 to 2017 under Campbell and Clark, per-person program spending (day-to-day spending excluding debt interest) increased at an annual average rate of 0.5 per cent compared to 3.1 per cent from 2017 to 2024 (all numbers adjusted for inflation). Given this fundamental shift in spending, it’s no surprise that large deficits have emerged in recent years and debt has started to pile up at a record pace.
Some may try to blame the COVID-19 pandemic and associated recession, but this explanation doesn’t withstand scrutiny. Spending did indeed surge during the COVID period but it has not meaningfully come back down in subsequent years.
In other words, while the pandemic-related recession is long over, the government has generally maintained the “emergency” spending levels of that era. And you also can’t blame the rapid deterioration of B.C.’s fiscal health on Canada’s trade war with the United States.
In reality, the provincial government has abandoned the spending discipline that a decade ago put the province in a strong fiscal position, resulting in significant debt accumulation. Ultimately, taxpayers today and in the future will bear the burden of these choices, in the form of increased government debt interest payments (which leave less money for services and less fiscal room for tax relief) and potentially higher taxes.
Ben Eisen is a senior fellow at the Fraser Institute and Nathaniel Li is a Fraser Institute analyst.
