B.C.\u2019s NDP government is preparing to deliver Tuesday what could be one of the worst budgets since it took office almost a decade ago.<\/p>\n
The administration of Premier David Eby is battling a record-setting deficit of almost $12 billion, built upon three years of accelerated spending that far exceeded the rate of growth in revenue and the economy.\u00a0<\/p>\n
Finance Minister Brenda Bailey has said she does not intend to raise taxes, or make large cuts. That despite Eby\u2019s deputy minister Shannon Salter warning in an internal memo recently that the deficit is \u201cunsustainable\u201d for the provincial treasury.<\/p>\n
\u201cHow I would describe the budget is disciplined, focused and serious,\u201d said Bailey. She told reporters in a pre-budget media event that it is a \u201cserious budget for very serious times.\u201d<\/p>\n
Bailey promised her plan will focus on \u201cprotecting core services\u201d including health care, education, social services and public safety.\u00a0<\/p>\n
However, those areas represent 78 per cent of the roughly $95 billion annual budget, leaving questions about where, exactly, the government intends to trim to make any sort of meaningful impact on the deficit.<\/p>\n
The current 2025-26 budget, which ends March 31, has government expenses growing at almost four per cent while revenue drops 0.32 per cent from the previous year and the economy is projected to grow around 1.5 per cent.<\/p>\n
That kind of gap has existed since the 2022-23 fiscal year, when B.C. enjoyed an unexpected one-time tax windfall due to the economic rebound from the pandemic.\u00a0<\/p>\n
Eby, who had just inherited the premiership from John Horgan, had a $5 billion surplus to spend at the time, and subsequently ramped up spending.\u00a0<\/p>\n
Health care costs, for example, are up almost 30 per cent since 2022. Health care is the single biggest cost for government and accounts for almost 40 per cent of the total budget. Yet it nonetheless suffers from shortages in health staff that have caused hospital curtailments, ER closures and long wait times for diagnostic tests and services.<\/p>\n
Meanwhile, the economy, and revenues, have collapsed since 2022 \u2014 most recently due to the global economic turmoil caused by U.S. President Donald Trump\u2019s tariff threats against Canada and other countries.<\/p>\n
Bailey last year promised to trim $300 million in efficiencies from the budget, representing barely 0.3 per cent of spending. She signaled more aggressive cuts are coming. A review to find efficiencies in the health care system last year identified only $60 million in savings, which amounted to the equivalent of 13 hours of running the system.<\/p>\n
\u201cWe do know that government does need to operate more efficiently,\u201d said Bailey.<\/p>\n
She pointed to almost a reduction of almost 1,500 people in the public service, amounting to barely a three per cent cut to a public sector of almost 48,000. Most of that was through attrition and retirements. The NDP government has almost doubled the size of the public sector since 2017.<\/p>\n
The BC General Employees\u2019 Union on Monday warned the government not to cut too deeply.<\/p>\n
\u201cGovernment decisions have reduced revenue without a sustainable replacement plan,\u201d the union said in a statement.<\/p>\n
\u201cThe answer is not austerity. Cuts alone are not a responsible economic strategy. Instead, investments that drive the economy are needed.\u201d<\/p>\n
The NDP\u2019s recent decision to abandon its public sector wage offer of 3.5 per cent over two years, in favour of a much more lucrative 12 per cent increase over four years, is expected to add another $14 billion in unbudgeted cost pressures to the government over the next four years. That\u2019s combined with the recent decision to cancel the carbon tax, which cost government more than $2 billion in revenue.<\/p>\n
Meanwhile, total provincial debt has skyrocketed 70 per cent in the last three years, to sit at $156.6 billion. The province has suffered several credit rating downgrades by financial agencies, making it more expensive to borrow.\u00a0<\/p>\n
Interest payments on the debt have doubled since 2022 and at almost $5.1 billion annually are now the equivalent of the fourth most expensive ministry in government.<\/p>\n