The British Columbia (BC) government announced its 2026 budget on February 17th. The budget, titled “Securing BC’s Future,” is centred around significant cuts to the public sector, strengthening medical and education services, extending the completion time for large-scale public works projects, and supporting skilled workers and natural resource-related projects. However, the provincial budget deficit is expected to be the largest in history.
Finance Minister Brenda Bailey blamed the state’s economy on factors including US tariffs and a slowing housing market, and said, “Now is the time to pause some of the things we want to do and focus on what we really need to do,” describing the budget as “a serious budget for very serious times.”
The priority areas are health, education, and safety. In the health sector, an additional $2.8 billion will be invested over the next three years, including for mental health and addiction treatment, expanded access to in vitro fertilization (IVF), and increased medical personnel. In public education, $634 million will be invested over three years to increase the number of teachers and strengthen special needs systems.
In the safety sector, an additional $139 million will be allocated over three years to reduce recidivism, violent crime, and property crime, and to support swift access to justice. Budget allocation will also be made to combat extortion, which has become a problem in recent years. In addition, spending aimed at promoting economic activity will include accelerating permits and licenses in the natural resources and tourism sectors, skilled trades programs, and measures to promote business investment.
On the other hand, the basic tax rate for the first income bracket, which applies to all taxpayers, will increase from 5% to 5.6%, which will result in a tax increase of $76 for the average taxpayer, although tax credits will help offset the tax increase for about 40% of taxpayers. The bill also raises provincial property taxes on homes assessed at over $3 million, as well as speculation and vacancy taxes.
Finance Minister Bailey said, “Under this government, British Columbia has one of the lowest tax burdens for working and middle-class people,” and emphasized, “That will not change.” Several public works projects will be delayed cutting costs, including construction of long-term care facilities, student accommodation at the University of Victoria, and the second phase of Burnaby Hospital, and 15,000 public sector jobs will be cut over the next three years.
The deficit is expected to increase dramatically next fiscal year, from $9.6 billion this year to $13.3 billion, with deficits projected for the following two years of $12.1 billion and $11.4 billion, respectively. Finance Minister Bailey stressed that “this is not an austerity budget” and said the deficit would be reduced through structural reforms.