British Columbia’s 2026 budget includes a series of tax increases, capital project delays and a planned reduction of 15,000 public sector jobs over the next three years. Despite these measures, the province is forecasting continued major deficits.
Tax Increases and Debt
Finance Minister Brenda Bailey described the budget, presented to the legislature on Tuesday, as different from previous budgets, attributing the province’s economic condition to factors like U.S. Tariffs and a cooling housing market. A significant deficit of $13.3 billion is projected for the 2026-27 fiscal year, an increase from $9.6 billion this year. Deficits of $12.1 billion and $11.4 billion are forecast for the following two years, with provincial debt expected to rise from $154 billion to $235 billion over the same period.
The government plans to increase the basic tax rate—affecting all income earners—from five per cent to 5.6 per cent. While raising taxes, Bailey defended the increasing debt by comparing B.C.’s net liability as a percentage of GDP to other Canadian provinces. The government also intends to increase the provincial portion of property taxes for homes assessed at over $3 million and raise the speculation and vacancy tax from three per cent to four per cent. The province will expand the Provincial Sales Tax (PST) to include services like clothing alterations, basic cable, and landline telephone services.
Impact on Services and Programs
The budget includes adjustments to existing programs. The number of new providers for the $10-a-day childcare program will be frozen, and several capital projects will be delayed, including seven long-term care facilities, phase two of the Burnaby Hospital, and student housing at the University of Victoria. Of the 15,000 planned job cuts, 2,500 are expected to come directly from the B.C. Public Service, with the remainder coming from Crown corporations, health agencies, and schools, largely through attrition and hiring freezes.
Despite the cuts and delays, Bailey stated that the budget is “not an austerity budget,” but did not provide a timeline for when the budget might be balanced. She expressed hope that British Columbians would view the measures as “protective action” focused on essential needs rather than new initiatives.
Frequently Asked Questions
What is the projected deficit for the 2026-27 fiscal year?
The projected deficit for the 2026-27 fiscal year is $13.3 billion.
How many jobs are expected to be cut over the next three years?
The government plans to reduce 15,000 public sector jobs over the next three years.
What tax increases are included in the budget?
The budget includes an increase to the basic tax rate from five per cent to 5.6 per cent, increased property taxes for homes over $3 million, a higher speculation and vacancy tax, and an expansion of the PST to certain services.
As the province navigates these economic challenges, what impact will these changes have on the daily lives of British Columbians?
