Business in Vancouver | February 18, 2026
‘This is a very deep hole and, sadly, I’m not sure how British Columbia gets out of it,’ says GVBOT president
It’s quite an accomplishment to produce a provincial budget that nobody likes. But the B.C. government managed to pull it off Tuesday, with its 2026-27 fiscal plan.
At the centre of this rare feat is the double whammy of hiking taxes by almost $1 billion next year while still posting record deficit and debt levels.
It means voters get all the annoyance of watching more of their hard-earned money siphoned away to government, but none of the benefit of it actually meaning anything in the wake of a historic $13.3-billion deficit.
It’s all pain, no gain budgeting.
Finance Minister Brenda Bailey was unapologetic about this latest strategy. She said the budget is “about stepping back from many of the things we’d like to do and focusing on what we have to do.”
Except for spending at a rate that far exceeds growth in revenue and the economy. New Democrats have been doing that since David Eby took power in 2022, and it continued Tuesday with government expenses budgeted to rise almost four per cent while revenue flatlines at 0.5 per cent and the economy slumps to 1.3 per cent.
In other words, the NDP is still growing government three times faster than the private sector that funds it.
Not all the changes Tuesday were confined to the budget itself.
Quietly in the legislature, buried within one of its budget bills, New Democrats moved to shut down the independent Office of the Merit Commissioner, as they seek to cut back the public service by 15,000 full-time employees (FTE) and start shuffling people around to save money.
That merit commissioner is supposed to oversee fair hiring within the public service to ensure governments don’t award plum jobs to partisan friends and insiders, among other things. Removing that independent oversight while simultaneously cutting 15,000 FTEs gives the Eby cabinet unprecedented discretion over who stays, who goes and who gets promoted.
It’s a big deal. But it wasn’t acknowledged in the budget, spoken about by the many government officials in the budget lockup, or communicated by Bailey when she introduced her legislation in the house.
Instead, Eby’s deputy minister, Shannon Salter, broke the news in a memo to the public service Tuesday.
“As part of an efficiency review process, government has introduced legislation to amend the Public Service Act so that the responsibilities of the Office of the Merit Commissioner would return to the PSA,” she wrote. “The commitment to the merit principle remains unchanged.”
Colour me skeptical on that one.
Back in the budget, New Democrats coughed up around $1 billion over the next year to old steady core services like health care, education and social services. But teachers, nurses and health workers quickly pointed out that a stand-pat budget at a time of hospital closures, crowded classrooms and strained services is not much of a help.
“Stabilizing health-care spending, when we look at the demands on the system, translates to, in some regards, a cut,” said Adriane Gear, BC Nurses Union president.
The rest of the budget appeared to be mostly an exercise in spreading pain around.
The personal income tax hike is broad-based, hitting everyone with a 0.5 per cent increase on the first $50,000.
It will be a deeply unpopular move. So unpopular the last government to try something like that was the 2000 BC Liberals under Gordon Campbell, who were in the middle of ripping up public sector labour contracts as part of their budget process.
Seniors were next. PST exemptions on land lines and cable are gone. Property tax deferrals (a program designed to help cash-poor seniors stay in their homes longer) will now carry higher, compounded interest.
Families will lose a $1,200 government RESP contribution program. Northern residents lost a $200 annual tax credit. And businesses lose PST exemptions on private security they’re increasingly forced to hire because the province cannot control retail theft and street disorder.
Page after page, the NDP’s latest budget paper is a series of paper cuts designed to bleed $4 billion in new tax revenue out of the public over the next three years. And yet, it barely moves the needle on eye-watering deficit and debt projections.
Total provincial debt is set to hit $183 billion in 2026-27. That’s a rise of 18 per cent in a single year, 49 per cent from when Eby took office and 178 per cent since the NDP formed government in 2017.
The cost of just paying interest on the provincial debt is rising to $6.5 billion under the budget, surpassing the Ministry of Social Services and Poverty Reduction to sit at the third most expensive ministry in government.
Put another way, B.C. is now paying more on servicing its gigantic debt every year than it is on helping its most vulnerable citizens with welfare and disability payments. By the end of this latest three-year plan, annual interest payments will almost hit what B.C. spends on the entire education system
“This is a very dark day,” said Bridgitte Anderson, president of the Greater Vancouver Board of Trade.
“The size of the debt is growing two and a half times the economy. That’s just not sustainable.”
B.C. already had its credit rating downgraded in 2024, and speculation is rising it could happen again.
“This is a very deep hole and, sadly, I’m not sure how British Columbia gets out of it,” said Anderson.
Based on this budget, it doesn’t look like the government knows either.
Rob Shaw has spent more than 18 years covering B.C. politics, now reporting for CHEK News and writing for BIV. He hosts the weekly show Political Capital.