AXIOME INTELLIGENCE · PUBLIC FINANCE · Q2 2026
British Columbia Spending Compounded
Premier and the Cadence
A fiscal trajectory brief on the Government of British Columbia from November 2022 through Budget 2026. Where the money was forecast to go, where it actually went, how the pattern compares to prior premiers, and what is happening at the ministry level in health, housing, and education.
This brief complements the British Columbia Credit Rating Stewardship Brief (April 2026) already in the Axiome library. That document covered the macro picture: debt growth, downgrades, and the interest bite. This one looks operationally at the ministries where the dollars actually move, and at how the gap between tabled budgets and posted actuals has widened in successive years.
David Eby was sworn in on November 18, 2022, succeeding John Horgan after an uncontested NDP leadership transition. He has now presided over four budgets:
- Budget 2023 (February 28, 2023, Selina Robinson), the first Eby-era budget, tabled at a $4.2 billion forecast deficit
- Budget 2024 (February 22, 2024, Katrine Conroy), $7.9 billion forecast deficit, a provincial record at the time
- Budget 2025 (March 4, 2025, Brenda Bailey), $10.9 billion forecast deficit, breaking the prior record by 38 percent
- Budget 2026 (February 17, 2026, Brenda Bailey), $13.3 billion forecast deficit on $85.5 billion in revenue, the largest in BC history
The pattern is not noise. Every Eby-era budget has set a new provincial deficit record at tabling, and every Eby-era budget has then drifted further into deficit through the in-year quarterly updates.
Budget Versus Actual
The pattern is more nuanced than the headlines suggest. Three observations sit underneath the data.
First, tabled deficits are setting new records each year. Budget 2023 tabled at $4.2 B, Budget 2024 at $7.9 B, Budget 2025 at $10.9 B, Budget 2026 at $13.3 B. Each one was the largest in BC history at the time of tabling.
Second, actuals have come in better than the tabled forecast in the last two completed fiscal years. 2024/25 Public Accounts (released August 2025) printed at a $7.3 B deficit, $564 M lower than the $7.9 B tabled. The 2025/26 Q3 update sits at $9.6 B against a $10.9 B tabled. The pattern is not in-year overshoot. It is record-setting tabled deficits where the actual comes in roughly $0.5 to $1.5 B better, on a base that keeps moving upward.
Third, the one Eby year that did overshoot is 2023/24. Tabled at $4.2 B, the Q3 update widened to $5.9 B, and Public Accounts landed at $5.035 B. The drivers were a record $1.1 B in wildfire response (overshooting the wildfire envelope by $401 M), lower natural resource revenue, and increased spending on health, education, and housing.
Figure 1 — Tabled versus in-year surplus / deficit, Cdn $ billions. Negative values are deficits. 2026/27 in-year figure not yet reported.
Source data
| Fiscal Year | Tabled | Actual / Updated | Variance | Source |
|---|---|---|---|---|
| 2022/23 | +$5.7 B surplus (Budget 2022) | +$704 M surplus | Worse than tabled | Public Accounts 2022/23 |
| 2023/24 | -$4.2 B | -$5.035 B | ~20% worse | Public Accounts 2023/24 |
| 2024/25 | -$7.9 B | -$7.3 B | $564 M better | Public Accounts 2024/25 (Aug 2025) |
| 2025/26 | -$10.9 B | -$9.6 B (Q3 update) | $1.3 B better | Q3 update 2025/26 |
| 2026/27 | -$13.3 B | In-year | $5 B contingency cushion | Budget 2026 (Feb 17, 2026) |
The structural concern is not in-year overshoot. It is the trajectory of tabled deficits. Each Eby budget has set a new BC record at tabling. Even when actuals come in better than tabled, the base keeps moving up by $2 to $3 B per year. Budget 2026 projects $13.3 B for 2026/27 with no return-to-balance plan in the three-year fiscal plan.
Health Ministry, The Engine of Spending Growth
Health is roughly 40 percent of the provincial operating budget and the single largest driver of the spending trajectory. Approximate Ministry of Health operating budget figures, year over year:
Figure 2 — Ministry of Health operating budget, Cdn $ billions. Horgan years (2017/18 to 2022/23) shown in gold; Eby years (2023/24 onward) shown in mint.
Source data
| Fiscal Year | Health Operating Budget | Year-over-Year Growth |
|---|---|---|
| 2017/18 | $18.3 B | baseline |
| 2019/20 | $21.4 B | +8.2% (two-year) |
| 2021/22 | $25.7 B | +10.0% (two-year, actual) |
| 2022/23 | $27.5 B | +7.0% |
| 2023/24 | $30.2 B | +9.8% |
| 2024/25 | $33.5 B | +10.9% |
| 2025/26 | $35.0 B+ | +4.5% (Budget 2025 uplift) |
Under Horgan (2017/18 through 2022/23), Health operating grew at a five-year compound rate of about 8.5 percent. Under Eby (2022/23 through 2025/26), the three-year compound rate is roughly 8.4 percent. The Health Ministry envelope has grown by 91 percent since 2017/18, from $18.3 B to over $35 B, more than doubling in nominal terms. The acceleration is not in the percentage growth rate but in the absolute dollar increase: under Horgan, Health grew by about $9 B over five years; under Eby, it has grown by about $7.5 B over three years.
What drove the acceleration
- Health authority operating top-ups to cover wage settlements with the nurses, paramedics, and allied health unions following 2022 to 2023 bargaining cycles
- Surrey Hospital and BC Cancer Centre capital commitments, plus the second Cowichan District Hospital
- Primary care network expansion and the new physician payment model rolled out in 2023
- Mental health and addictions spending through the Ministry of Mental Health and Addictions, which sits alongside Health but is reported separately
Budget 2026 directs $2.77 B of the $5.1 B in new spending announced to the Ministry of Health, by far the largest single-ministry allocation. Of that envelope, $131 M is earmarked for intensive mental health and addictions treatment, $34 M annually for in-vitro fertilization access, and $447 M in federal contributions for seniors' care. The acceleration is no longer about pandemic-era top-ups; it is about a structural rebasing of what BC spends on health each year.
Housing, Eby's Signature File
Housing is the file Eby owns politically. He was Minister of Housing under Horgan from 2020 to 2022, made it a standalone ministry in late 2022 once he became Premier, and the policy infrastructure built around it (BC Builds, Speculation and Vacancy Tax expansion, Rental Protection Fund, secondary suite policy) is identified with him personally. Budget 2026 marks a notable shift: the province is now slowing the pace of its own housing strategy.
Per the Union of BC Municipalities' analysis of Budget 2026, the province is reallocating $1.4 billion away from its housing strategy over the three-year fiscal plan. A portion of that money comes from closing the Community Housing Fund indefinitely, which had been intended to support building affordable rental homes.
What Budget 2026 actually does on housing
- $1.4 B reallocated from the housing strategy across 2026/27 to 2028/29, used to support other priorities and reduce the deficit
- Community Housing Fund closed indefinitely, ending a key affordable rental construction program
- BC Builds continues but at a slower trajectory than originally tabled, with the province projecting 8,000 to 10,000 units over the first five years of the program
The headline housing numbers, reconciled
- Housing supply target: 114,000 new homes by 2027/28. Nearly 92,000 have been delivered or are underway as of the most recent provincial release. The 119,000-home figure from Eby's 2022 leadership campaign has since been re-baselined to the 114,000 target.
- BC Builds projection: 8,000 to 10,000 units over the first five years of the program (2024 launch through 2029), per provincial estimates. The program targets middle-income earners on government, non-profit, and underutilized land.
- Capital partners: the $950 M in low-cost federal-backed financing has been augmented by additional contributions from Ottawa to extend the program.
Budget 2026 reverses the prior posture on housing spend. The signature file Eby built his premiership around is now the source of a $1.4 B three-year reallocation, with the Community Housing Fund (rental affordability) closed indefinitely. This is the operational tradeoff being made to manage the deficit trajectory. The political narrative still emphasizes housing as a priority. The fiscal plan no longer does.
Education and Child Care
K-12 education sits in the Ministry of Education and Child Care. Post-secondary education sits in the Ministry of Post-Secondary Education and Future Skills. Approximate combined operating allocations:
| Fiscal Year | K-12 (Education and Child Care) | Post-Secondary | Combined |
|---|---|---|---|
| 2017/18 | $5.9 B | $2.0 B | $7.9 B |
| 2022/23 | $7.5 B | $2.4 B | $9.9 B |
| 2024/25 | $8.5 B | $2.6 B | $11.1 B |
| 2025/26 | $9.0 B+ | $2.8 B | $11.8 B+ |
Budget 2026 education commitments
- $634 M new operating funding for teachers, student services, and inclusive learning as enrolment in inclusive learning programs continues to rise
- $167 M Classroom Enhancement Fund for more teachers, special education teachers, school psychologists, and counsellors
- $3.9 B capital allocation for seismic replacements, upgrades, and enrolment-driven new school construction in the Lower Mainland and Interior
- $330 M ChildCareBC lift to stabilize the $10-a-day child care system while government works to modernize its delivery
Post-secondary growth has been slower than K-12. The 2024 federal international student cap materially affected several institutions' revenue models, and the province has not increased operating grants in real terms to compensate. Several institutions, notably in the Fraser Valley and on Vancouver Island, are reporting deficits.
Education spending growth is the most defensible of the three ministries reviewed here. K-12 enrolment has grown, particularly in the Lower Mainland, and per-student operating funding has tracked roughly with inflation plus enrolment. Budget 2026 protected the K-12 envelope while reducing the housing envelope, a deliberate ranking of priorities.
Premier Comparison, Eby Versus Horgan and Clark
A clean way to read the Eby spending posture is against the two preceding premiers.
| Premier | Tenure | Surplus / Deficit Pattern | Taxpayer-Supported Debt at Exit |
|---|---|---|---|
| Christy Clark (BC Liberal) | 2011-2017 | Consistent surpluses 2013-2017 | ~$42 B taxpayer-supported (total debt $66.7 B in 2016/17) |
| John Horgan (NDP) | 2017-2022 | Small surpluses, COVID deficit, returned to surplus | $59.9 B taxpayer-supported (2022/23) |
| David Eby (NDP) | 2022-present | Record-setting tabled deficits each year | $99.1 B taxpayer-supported (end of 2024/25, +$23.7 B in one year) |
Taxpayer-supported debt under Horgan grew from approximately $42 B to $59.9 B over five years, an increase of roughly $18 B. Under Eby, taxpayer-supported debt grew by $23.7 B in 2024/25 alone, crossing $99 B by the end of that fiscal year. The Globe and Mail's editorial board described Horgan's per-person debt growth as "one of the lowest rates among BC premiers." Eby's is on pace to be among the fastest in the province's recorded history.
The Clark period is included for long-baseline context. Clark's last full year (2016/17) posted a $2.7 billion surplus. Five fiscal years later Horgan's last full year (2022/23) posted a $704 M surplus. Three Eby fiscal years after that (2025/26), the province's Q3 update sits at minus $9.6 B. The cumulative deficit across the Eby budgets (2023/24 actual through 2026/27 tabled) is approximately $35 B and rising.
What the Trajectory Implies
The credit-rating consequences are documented in the prior Axiome BC brief. Four operational observations follow from the budget-versus-actual data, separate from the rating story.
First, the rebasing is the story, not the variance
Actuals coming in $0.5 to $1.3 B better than tabled is not the structural concern. The concern is that the tabled number has moved up by roughly $2 to $3 B per year, year after year. Budget 2023 tabled $4.2 B. Budget 2026 tabled $13.3 B. That is a 217 percent increase in the tabled deficit baseline in three years.
Second, Budget 2026 is the first one that admits tradeoffs
For the first time under Eby, the budget formally cuts: 15,000 public sector jobs over three years (2,500 from the BC Public Service, 12,500 from broader Crown corporations, school districts, and health authorities), $1.4 B reallocated away from the housing strategy, the Community Housing Fund closed indefinitely, capital project delays. The Bailey budget is the first formal acknowledgment that the prior spending trajectory was not sustainable.
Third, the contingency is doing real work
Budget 2026 carries $5 B in contingencies each year of the fiscal plan, explicitly earmarked for caseload pressures, the current collective bargaining mandate, trade uncertainty, and emergency response. That cushion is what stands between the headline $13.3 B deficit and a materially worse print. A bad wildfire season, a tariff shock, or a health authority overrun draws it down.
Fourth, the spending mix has shifted toward operating, not capital
A AAA province borrows to fund productive capital (hospitals, transit, schools) and balances operating. Debt-financed operating deficits at this scale invert that principle. Multiple credit rating agencies (S&P, Moody's, Fitch, DBRS) have cited this specific pattern in successive downgrade actions through 2025 and 2026.
The single load-bearing question for any voter or stakeholder reviewing this trajectory is where the multi-year plan to return operating budgets to balance has been tabled. As of Budget 2026, no such plan exists in the three-year fiscal plan window. The absence is what the rating agencies specifically cite. The Bailey budget shows the government is now willing to cut, but the cuts announced are insufficient to flatten the tabled deficit trajectory, let alone reverse it.
Sources and Verification Status
Primary and secondary sources used in this brief:
- BC Ministry of Finance. Budget and Fiscal Plan 2026/27 to 2028/29 (bcbudget.gov.bc.ca/2026)
- BC Public Accounts. 2022/23 (BIV, Globalnews coverage of $704 M surplus); 2023/24 (-$5.035 B per Globalnews and gov.bc.ca release); 2024/25 (-$7.3 B per CBC, am1150.ca, gov.bc.ca August 2025 release)
- Q3 update 2025/26. -$9.6 B deficit forecast, reported by CBC News February 17, 2026
- BC Budget 2026 highlights and ministry materials. bcbudget.gov.bc.ca/2026/highlights, ministry service plans, gov.bc.ca news releases
- Ministry of Health. $35 B+ for 2025/26 per IHSTS and Globalnews coverage; 2021/22 actual $25.713 B per Annual Service Plan Report
- Housing. Union of BC Municipalities Budget 2026 analysis; BC Builds projections (8,000 to 10,000 units over five years) from BC Housing releases; 114,000 unit supply target from gov.bc.ca news
- Public sector cuts. CBC News, Daily Hive Vancouver, Bloomberg, BCGEU analysis of Budget 2026
- Debt history. Globe and Mail editorial board (Horgan per-person debt growth), Fraser Institute "Debt Accumulation by Premier" (2025), Tyee historical reporting on Clark era
- Credit ratings. Moody's rating action March 19, 2026; S&P downgrades April 2025 (AA- to A+); Wealth Professional and Benefits and Pensions Monitor coverage
- Prior Axiome work. British Columbia Credit Rating Stewardship Brief, April 2026, available in /generated_reports/2026-bc-credit-rating-stewardship-brief.html
Headline figures (tabled deficits, Public Accounts actuals, credit rating actions, Budget 2026 ministry allocations) are sourced from primary BC government documents or major news coverage. Two figures retain caveats. First, the Health Ministry historical operating budget series uses Annual Service Plan Report data for 2021/22 ($25.713 B confirmed) and Budget 2025/26 ($35 B+ confirmed); intermediate years are interpolated from Service Plan tables. Second, the Clark-era taxpayer-supported debt figure ($42 B) is an approximation; total provincial debt was $66.7 B in 2016/17 per Tyee reporting, and the taxpayer-supported subset is the figure Eby's office uses for comparison.