B.C. premier defends red-ink 2026 budget, urges to be 'judged on the outcomes'
Premier David Eby faced a highly skeptical business audience Friday morning as he defended the BC NDP-led provincial government’s controversial 2026 budget, telling the Greater Vancouver Board of Trade (GVBOT) that British Columbia must grow its economy to stabilize the provincial finances — even as the provincial government confronts a projected $13-billion deficit and sharply rising taxpayer-supported debt approaching a quarter trillion dollars before the end of this decade.He placed B.C.’s fiscal challenges in a broader context, telling business leaders that provincial governments across Canada — and governments in the U.K., U.S., and European Union — are all grappling with declining revenues, rising costs, and growing deficits in a slowing global economy. You might also like:- B.C. government's budget deficit to soar to new all-time historic high of $13.3 billion- B.C. government to slow pace of building new housing and infrastructure projects, including Burnaby Hospital redevelopment- B.C. government to cut 15,000 jobs over three years, including executive positions- B.C. government hikes school property tax, changes property tax deferment rules- B.C. government increases speculation and vacancy tax rate for the second consecutive year- B.C. personal income tax increased for first $50,363 earned starting in 2026- B.C.’s PST will be expanded to more areas of the economy in 2026, especially for real estate- 'Deeply worrying': B.C. budget response is overwhelmingly negative to say the leastHe also highlighted the emerging uncertainty and instability in Alberta, with Premier Danielle Smith announcing this week her province will hold a public referendum in Fall 2026 on a wide range of constitutional and federal matters, including immigration.“We can hold ourselves to a higher standard and we will. But I think that the only way to demonstrate to this room, to the Board of Trade, to others is through success and I think when we deliver tens of billions of dollars of direct investment into British Columbia that will be the answer,” said the Premier.“If you are looking at a stable jurisdiction that is growing, that is hiring, that is training, that supports immigration, that supports skilled workers coming in and building a life here still, then British Columbia is the place. And, you know, if the PST on the accounting bill is sufficient to move you to another province, I don’t know what to say about that, except to say that it may not be, in the long term, in terms of Alberta’s current trajectory, necessarily one that’s going to support the long-term success of business.”Against that backdrop, Eby said the budget is built around three priorities: growing the economy, stabilizing provincial finances, and protecting services.With an aging population arriving at hospitals “sicker, and needing more time in hospital,” he argued that cuts alone will not solve the problem, with healthcare costs being the single largest operating cost by a wide margin and the largest cost escalator.“We have to grow the economy in order to be able to meet that demand. It’s as simple as that.”OPERATING DEBT VS. INFRASTRUCTURE DEBTFollowing the budget announcement earlier this week, GVBOT provided the provincial government with a D grade for its 2026/2027 budget.“D was a very hard mark. In previous years, the lowest mark we had given was a C-, and we have been doing the report card for over 20 years, maybe 25 years, looking at some in the group who would know that,” said GVBOT president and CEO Bridgitte Anderson during the event on Friday morning.“So I didn’t take that lightly and neither did the team as we were giving that grade, but we simply, looking at previous budgets, could not give it a C-.”When further pressed by Anderson about the staggering annual operating deficits for the foreseeable future adding to debt, Eby tried to reframe the debt conversation.He argued much of the borrowed money is going into infrastructure that businesses can see and are participating in, such as new hospitals, schools, bridges, and roads. He called it infrastructure that was “long neglected” [and] “announced many times that it would be built, never funded,” asserting, “We inherited a massive infrastructure debt.”“I think we can agree that that kind of debt that’s tied to infrastructure is positive in that it drives growth. It has to be paid for in advance. It gets paid back over time. It’s an investment in the province,” said Eby, before emphasizing that the provincial government is trying to reduce and eliminate debt that is based on operating budget deficits, which is currently extraordinary. “That is not positive debt.”“WE’RE NOT LOOKING AT BRINGING IN THE HST IN BRITISH COLUMBIA”One of the most contentious measures remains the expansion of the Provincial Sales Tax (PST) to a wider range of professional services, especially in the real estate and building development sector, to generate more revenue.Anderson highlighted that the application of the PST to more areas of the economy, particularly in that sector, will add to the cost of struggling housing projects and major projects, as well as many small businesses. She says this achieves the opposite of reducing red tape and cutting the cost of doing business in B.C.Eby defended the PST measure by bringing up the elimination of the provincial government’s consumer carbon tax since April 2025, which he says was a $2 billion hit to revenues.“I know that’s not a popular decision in the room and it’s not one that we take lightly but it is a reflection as well of the changing nature of the economy of British Columbia. It’s an economy that historically has been entirely dependent on resource development. And while that will continue to be and I hope to be a more significant part of the economy going forward, service delivery is a growing and important sector in our province as well,” he said.“We do require a tax base in order to support the services that your employees count on.”Anderson floated the idea of bringing back the 12 per cent Harmonized Sales Tax (HST) of combining the seven per cent PST and five per cent federal Goods and Sales Tax (GST), which is commonly seen as a way to stimulate investment and increase productivity.HST was briefly put in place in BC a decade and a half ago, but the public backlash and resulting public referendum result led to its quick removal and the return of the PST, and it greatly contributed to the political downfall of Premier Gordon Campbell.“We’re not looking at bringing in the HST in British Columbia,” said Eby. “If that’s a campaign that business community wants to take on, I’d be happy to hear the public discussion about it. I don’t hear a lot of appetite for it.”“It would add additional sources of revenue for the province because it taxes things that we don’t currently tax, which was the big reason why people in the province voted against it last time. So I think that issue would have to be addressed. But ensuring reduction of paperwork and duplication between federal and provincial tax regimes is, I think, an admirable goal. But there is a significant hurdle in terms of what people are willing to tolerate right now.”GROWING CONCERNS OVER FIRST NATIONS HURDLESEby also pushed back against growing concerns in the business community and among other critics that agreements and partnerships with First Nations are a major economic drag and a burden to the collective good of British Columbians.“There is not one of those major projects, not one of those multi-billion dollar investments not one of those investments that will employ literally thousands of British Columbians that doesn’t have strong First Nations partnership. And that wouldn’t be extremely worried about proceeding to Final Investment Decision if they didn’t have those partnerships,” he said.“By talking with First Nations, by entering into partnerships with them, we do things like deliver major mines like the Eskay Creek project, like LNG Canada Phase 2. So, Ksi Lisims’ LNG is actually an Indigenous-led energy project. In fact, the suggestion that by terminating our relationship with First Nations or treating First Nations with hostility or ignoring their rights is the path to certainty for our economy is completely wrong.”At the same time, he acknowledged business concerns about certainty with regards to fee-simple title private property ownership, especially in the backdrop of the last year’s Cowichan Tribes’ court decision that granted Aboriginal title to both public and private properties in southeast Richmond.Federal, provincial, and municipal governments, along with other First Nations and private property owners, are challenging the decision in an effort to have it overturned and to avoid setting a concerning precedent province-wide — and potentially elsewhere in Canada.He recognizes that if people are unsure if they actually own property, it will be a barrier to the investment climate.“Private property, clarity of title, understanding what you own is a cornerstone, is the foundation of our economy. If you don’t know that you own a piece of property, then you can’t invest, you can’t make decisions and whether you’re talking about a family or a business, the result is the same, which is instability and uncertainty,” said the Premier.He promised the provincial government would defend that property ownership principle in court, and insisted the intent of the Declaration on the Rights of Indigenous Peoples Act (DRIPA) must be implemented by elected officials, not judges, to ensure predictability.So far this year, he has repeatedly committed to amending DRIPA to address the concerns raised, while the Conservative Party of British Columbia and other critics have called for an immediate repeal to eliminate its effects on all B.C. laws and legislation to provide a great degree of certainty and clarity.“I look forward to British Columbia being the economic engine of the country, which we will be because of geography, people, resources, and what we’re offering right now, which is what the world needs,” said Eby.“And at the end of the day, I think that I would ask to be judged on the outcomes and we’re going to get there.” You might also like:- B.C. government's budget deficit to soar to new all-time historic high of $13.3 billion- B.C. government to slow pace of building new housing and infrastructure projects, including Burnaby Hospital redevelopment- B.C. government to cut 15,000 jobs over three years, including executive positions- B.C. government hikes school property tax, changes property tax deferment rules- B.C. government increases speculation and vacancy tax rate for the second consecutive year- B.C. personal income tax increased for first $50,363 earned starting in 2026- B.C.’s PST will be expanded to more areas of the economy in 2026, especially for real estate- 'Deeply worrying': B.C. budget response is overwhelmingly negative to say the least
