Don’t be fooled—B.C. government remains deep in the red

According to the Eby government’s recent fiscal update, the budget deficit is $7.7 billion in 2025/26, $3.2 billion lower than originally forecast in the government’s February budget. But don’t be fooled by misleading headlines—the Eby government is still deep in the red.

The fiscal improvement is mainly due to an accounting choice to include $2.6 billion of a onetime tobacco settlement in revenues. It also reflects delays or “slippage” to expensive capital projects (e.g. roads, schools, hospitals). In other words, the boost to revenues is temporary and the savings are simply spending pushed to a later date.

And nevertheless, a $7.7 billion deficit is massive—the largest on record (inflation-adjusted) in British Columbia. Of course, deficits fuel debt accumulation, which British Columbians must pay for—indeed, debt interest costs this year are more than $800 per British Columbian. Put simply, to put provincial finances back on track, the government must rein in wasteful spending.

Where should the government find savings?

For starters, consider that from 2015/16 to 2025/26, the B.C. government’s Full-Time Equivalent or FTEs (a measure of staff employment—two half-time employees equal one full-time equivalent) grew by 153,604 or 54.0 per cent, dwarfing growth in the province’s population (19.6 per cent) and private-sector job growth including self-employed (16.8 per cent). Put differently, government FTE growth was roughly three times larger than population growth or private-sector job growth over the 11-year period. And these aren’t just essential workers such as doctors or nurses; there’s been an explosion in government bureaucrats.

Let’s put these numbers into perspective.

If Premier Eby were to reduce FTEs to what they would be had FTE growth matched population or private-sector job growth over the last 10 years (a reduction of roughly 100,000 FTE), potential savings are $12.2 billion to $13.2 billion, respectively—enough to eliminate the province’s deficit and then some.

The government also spends billions of dollars on business subsidies (i.e. corporate welfare) to select companies and industries annually ($4.2 billion in 2024, the latest year of available data). And corporate welfare does little if anything to benefit the average British Columbian. This is another clear area to eliminate wasteful spending.

The Eby government is treating a $7.7 billion deficit as a win because it’s lower than originally forecast. In reality, the reduction simply reflects a onetime payment and delayed spending—and British Columbians still face a record-high deficit. Fortunately, there are ways to help end this fiscal disaster.