B.C. government spent its way into fiscal disaster—here’s the first step to fix it

The Eby government has released its first-quarter update, which provides an updated look at the province’s finances including fiscal projections for 2026/27. Unfortunately, the government’s fiscal disaster is set to continue with a $13.8 billion projected budget deficit this fiscal year—$450 million more than originally projected—and the largest deficit on record.

This fiscal year, projected revenue is up nearly $800 million (thanks mainly to a boost in personal and business income taxes), but higher spending has more than offset any gains. Indeed, projected spending is $1.2 billion higher than in Budget 2026, mainly due to additional fire management costs and higher refundable tax credits (e.g. the renters tax credit). The Eby government also received significant backlash for miscalculating natural gas royalties, which has resulted in $306 million lower revenues than initially forecast this fiscal year. All in all, British Columbians face a record-breaking deficit with another whopping $12.7 billion deficit projected in 2027/29 and a $12 billion projected deficit in 2028/29.

In the face of this red ink, the Eby government routinely references the “significant headwinds” caused by the U.S. tariffs, but this fiscal disaster didn’t happen overnight. Since taking office in 2022, the Eby government has quickly ramped up spending to record levels—well before the Trump tariffs—while running historically large budget deficits and accumulating debt at an unprecedented pace.

After years of fiscal mismanagement, the Eby government expects its total debt to reach $180.9 billion in 2026/27. For perspective, total debt stood at $87.1 billion in 2020/21 as the province emerged from the pandemic—that means debt is expected to more than double in just six years.

Ultimately, you’re responsible for financing provincial government debt through your tax dollars. If debt interest costs were run as a government ministry, they’d be the third-largest, behind only health care and education. Overall, British Columbians will pay a projected $6.3 billion (roughly $1,122 per British Columbian) in provincial government debt interest this year. And the heavy burden on taxpayers may only increase—the B.C. government has received five credit rating downgrades in recent years, which indicates to lenders that the provincial government is seen as an increasingly risky borrower. A higher risk premium means higher borrowing costs.

Put simply, Premier Eby urgently needs to rein in spending to reduce deficits and slow debt accumulation. So, where to begin?

The first step is reducing the size of government, which has skyrocketed in recent years. From 2015/16 to 2025/26, the B.C. government’s full-time equivalents, or FTEs (a measure of staff employment—two half-time employees equal one FTE) increased by 54.0 per cent, dwarfing growth in the province’s population (19.6 per cent) and private-sector job growth including self-employment (16.8 per cent).

For perspective, if the Eby government reduced FTEs to what they would be had growth matched population or private-sector job growth over the last 10 years, potential savings are an estimated $12.2 billion and $13.2 billion annually, respectively—enough to effectively eliminate the deficit.

The Eby government’s first quarter fiscal update spells more bad news for British Columbians who are stuck footing the bill for sky-high government spending. It’s time to right this fiscal ship, and reducing the bloated government sector is the clear first step.