By Ben Eisen
During the depths of the pandemic and the associated recession, governments across Canada ran large deficits and racked up considerable debt, borrowing and spending on priorities including loan and grants to businesses, support for individuals and health-care infrastructure.
British Columbia participated in the COVID-era pan-Canadian debt binge, running a budget deficit of more than $5 billion in 2020. However, recent forecasts from the Eby government suggest the province is about to embark on a new, much more expensive period of debt accumulation, which will make the COVID era look like small potatoes.
The numbers tell the story. According to the government’s forecast, this year’s operating deficit will be $5.6 billion—almost exactly the same size deficit (in nominal terms) the province ran during the worst days of the pandemic and steep recession of 2020.
However, that’s just the tip of the iceberg, representing the deficit for just one year and only counting day-to-day spending while excluding money spent on longer-term capital projects. The province’s most recent detailed multi-year fiscal forecast predicts that once these costs are included, provincial net debt will increase by $42.7 billion over the next three years.
