Premier David Eby defended his government’s latest budget at the Greater Vancouver Board of Trade (GVBOT) on Friday morning, after the organization gave the fiscal plan a letter grade of “D” in its annual report card.
Finance Minister Brenda Bailey tabled the budget on Tuesday. It showed the deficit is expected to climb to $13.3 billion before declining over the following two years.
Rising provincial debt means the taxpayer-supported debt-to-GDP ratio is forecast to climb to more than 37 per cent by 2028-29. The ratio measures the government’s debt load compared with its ability to repay it.
The budget also laid out a plan to increase income taxes for the lowest tax bracket to 5.6 per cent and expand the range of goods and services subject to the provincial sales tax (PST).
The GVBOT said the addition of PST to the cost of professional services such as accountants, engineers, architects, and property management will hurt businesses.
“Despite significant new tax increases, the province’s fiscal situation continues on a perilous trajectory, with an eye-popping $80 billion to be added to the debt over the next three years,” said GVBOT president and CEO Bridgitte Anderson in a statement Tuesday.
Anderson questioned Eby on Friday about the province’s plan to address the mounting deficit and debt.
Eby said the province is working to address what he called a “massive infrastructure debt.” He pointed to the expansion of the Fraser Highway and long-overdue hospital upgrades in Vancouver, Fort St. John, and elsewhere.
“I hope we can agree that that kind of debt that’s tied to infrastructure is positive and that it drives growth,” said Eby. “It gets paid back over time.”
Eby said the province is relying on several major projects expected to reach final investment decisions over the next year to help create some “economic momentum.” That includes six liquefied natural gas facilities that Eby said will help boost lagging natural resource revenue.
He also noted that B.C. is expected to see a significant chunk of the $82 billion earmarked by the federal government for defence spending within Canada over the next five years.
Asked about the expansion of the PST to professional services, Eby said the elimination of B.C.’s carbon tax blew a $2 billion gap in revenues.
“Our economy is, while still heavily resource-dependent, shifting to a service economy. We do need to recognize that in terms of the revenue that we’re able to generate for the province,” said Eby.
He said B.C. is not looking to introduce a harmonized sales tax, as several other provinces, including Ontario, have done.
The GVBOT’s rating for the 2026 budget was a downgrade from the 2025 budget, which the board gave a “C-.”
Eby said he’ll be closely watching the release of Alberta’s budget on Feb. 26, saying he expects it to also reflect lower prices for resources such as oil.
“I don’t mind getting a ‘D’ if other students in the class are also graded,” said Eby. “I think we’re doing an OK job compared with our relevant comparators.”
You must be logged in to post a comment.