B.C. government debt set to more than double in six years as deficit crisis deepens
A think tank analysis shows B.C. government total debt expected to reach $180.9 billion in 2026-27, up from $87.1 billion in 2020-21. Debt interest costs alone will total $6.3 billion this year.
Sources · Fraser Institute
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British Columbia's government debt is on track to more than double in six years, with total debt expected to reach $180.9 billion in 2026-27, compared to $87.1 billion in 2020-21, according to analysis from the Fraser Institute, a think tank that advocates free-market policies.
The mounting debt is driven by persistent large deficits. The 2026-27 deficit is forecast at $13.8 billion — $450 million higher than originally projected and the largest on record. While projected revenues are up nearly $800 million this fiscal year, mainly from personal and business income taxes, spending is $1.2 billion higher than Budget 2026 projected, due to additional fire management costs and higher refundable tax credits.
Adding to the fiscal pressure is a $306 million error in natural gas royalty forecasts that the government miscalculated, resulting in lower revenues than initially forecast this fiscal year.
Debt interest costs are consuming an increasing share of provincial spending. The government will spend $6.3 billion on debt interest this year — roughly $1,122 per British Columbian. If debt interest were a government ministry, it would rank third-largest behind health care and education.
The government has received five credit rating downgrades in recent years. Premier David Eby's government, which took office in 2022, has ramped up spending to record levels and has been running historically large budget deficits since taking office.
The Fraser Institute argues that government staffing growth outpaces both population and private-sector job growth. The B.C. government added full-time equivalents (FTEs) from 2015-16 to 2025-26. Over the same period, B.C. population grew 19.6 per cent and private-sector job growth including self-employment was 16.8 per cent. The institute estimates that if FTEs were reduced to match population growth, annual savings would total $12.2 billion; if reduced to match private-sector job growth, savings would reach $13.2 billion.
Deficits are projected to remain elevated at $12.7 billion in 2027-28 and $12 billion in 2028-29.
By the numbers
What is B.C.'s projected government debt for 2026-27?
$180.9 billion, more than double the $87.1 billion recorded in 2020-21.
How much will B.C. spend on debt interest in 2026-27?
$6.3 billion, which equals roughly $1,122 per British Columbian and would rank as the third-largest government expense after health care and education.
What is the projected deficit for 2026-27?
$13.8 billion, the largest on record and $450 million higher than originally projected.
How much could B.C. save annually by reducing government staffing to match population growth?
$12.2 billion, according to Fraser Institute analysis. If staffing were instead reduced to match private-sector job growth rates, annual savings would reach $13.2 billion.
