Opinion: B.C.’s debt surge is no accident under Premier David Eby

Record per-person spending

Photo: Province of BC/Flickr

The deficits of Premier David Eby's government are diverting billions from public services, argue economists from the Fraser Institute.

The B.C. government plans to run a staggering $11.2-billion budget deficit in fiscal 2025-26, fuelling an explosion in government debt. To change course in the upcoming February budget, the government must rein in record-high spending levels.

In fact, according to the Fraser Institute’s new study, in 2025 the Eby government posted the highest level of program spending (on a per-person inflation-adjusted basis) in British Columbia since 1965 (latest year of comparable data), at $13,711. Premier David Eby also recorded the second-highest year of program spending (again, per-person inflation-adjusted) at $13,269 in 2024. (Raw dollar figures can be misleading because populations grow and prices rise. Adjusting spending for population and inflation strips out those effects so different years can be compared on equal terms.)

The Eby government’s record-high spending levels are fuelling budget deficits and skyrocketing provincial debt. Indeed, after you combine longer-term capital spending (e.g. on schools and highways) and program spending (e.g. social assistance), total provincial debt will surge from $89.4 billion in fiscal 2022-23, when Eby first took office, to $155.1 billion this fiscal year. In fact, Eby is adding debt faster (on a per-person inflation-adjusted basis) than any premier in B.C. history.

Why should British Columbians care? Because government debt comes with real consequences. For one, it means more and more taxpayer money will go towards government debt interest rather than services for British Columbians—debt interest costs will reach a projected $5.1 billion in 2025-26, which is more than twice the amount this government will spend on child welfare. And it may mean higher taxes in the future to pay for today’s debt.

Fortunately, there are some clear options to reduce spending and slow the pace of debt accumulation. B.C.'s public sector saw substantial growth under former premier John Horgan. Government jobs come at a significant cost—spending on total government employee compensation typically consumes half of all provincial spending in B.C.

There’s no mystery—Eby’s record-high spending is fuelling B.C.’s massive debt accumulation. If the government wants to change course and reduce this massive burden on the shoulders of British Columbians, in its upcoming budget it must reduce spending and the size of its bloated government.

Tegan Hill and Joel Emes are economists with the Fraser Institute.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.