British Columbia once had one of the lowest debt rates among the provinces. Now, its rapidly growing debt is projected to cause B.C. to have the highest per-person debt rate by the end of this decade.
A new study by the Fraser Institute projects that B.C. is on track to have the most debt per person, $36,909, in fiscal year 2029/2030. If fiscal policy doesn’t change, the province is also projected to have a debt-to-GDP ratio of 40.4%, making it the third highest in Canada, behind only Newfoundland, Labrador, and Nova Scotia.
The study examined each province’s fiscal plans in relation to its current per capita debt and debt as a ratio to GDP. It extended the spending rate and debt accumulation past B.C.’s fiscal plan, which ends in 2026/2027, to see if provincial financial trajectories continued where they would rank in relation to each other’s debt rates.
Before NDP Premier John Horgan’s election in 2017, B.C. had one of Canada’s lowest debt rates, which was improving year over year.
“The B.C. government has substantially increased spending and overseen a rapid expansion in government debt,” the report said. “Nominal net debt was just $39.4 billion in 2016/17 and is now forecast to reach $226.8 billion by the end of the decade.”
The study shows that in fiscal year 2016/2017, B.C. had the second-lowest net debt per person in the country, at $8,109. It was second only to Alberta, which had a net debt of $2,122 per person.
In contrast, Newfoundland and Labrador had the highest net debt in the country, with $25,677 per person. Quebec had the second highest, at $23,275, followed by Ontario, with a net debt per person of $22,634.
In the same fiscal year, B.C. had the country’s third-lowest net debt as a percentage of GDP, at 14.9%. Saskatchewan had the second-lowest, with 13.5% debt to GDP, and Alberta had the lowest, with 2.9%.
“In less than 15 years, the provincial government is planning to increase the province’s debt, relative to the size of the economy, by almost three times,” Ben Eisen, a senior fellow at Fraser Institute and co-author of the study, said in a news release.
From 2000 to 2017, real per-person spending increased by 0.5% in the province, the provincial budget was balanced, and the province’s debt-to-GDP ratio had “steadily” decreased for “several years.”
According to the report, B.C. has the fastest-growing debt in Canada. From 2016/2017 to the current fiscal year of 2024/2025, it experienced a “uniquely rapid increase” in both measures of provincial debt.
The study showed that B.C.’s spending increased by 4.7% yearly from 2017/2018 to 2021/2022.
Since the B.C. NDP has been in office from 2016/2017 to the current fiscal year; the province’s net debt has grown by $8,213 per person, the largest increase in the country. Newfoundland & Labrador had the second-largest increase in that period, at $7,282, followed by Alberta at $6,426.
B.C.’s debt-to-GDP is forecasted to have increased by 7% at the end of this fiscal year when compared to when the B.C. NDP was first elected, making it the largest increase among provinces in Canada. Ontario’s debt-to-GDP, for example, has decreased by 0.6%, and Quebec’s fell by 7.6% in the same period.
In February, the B.C. NDP government unveiled a $7.9 billion deficit for the 2024/2025 fiscal year.
Carson Binda, the B.C. director of the Canadian Taxpayer Federation told True North in an interview that the deficit has only worsened since the budget was announced.
“The last budget presented by this government was an absolute dumpster fire, as far as taxpayers were concerned. And with today’s quarterly financial report, the government put that dumpster fire and poured gasoline all over it,” he said. “Our province is staring down a $9 billion deficit right now. Bad budgeting from this government is the reason why.”
He said that according to the province’s latest financial report on Tuesday, British Columbians face $4.7 billion in interest on their debt alone, which amounts to about $940 per British Columbian.
According to the government’s quarterly report, by the end of the fiscal year B.C. will be $128.6 billion in debt, making it the worst year for deficits in the province’s history.
“(That’s) money that taxpayers are going to have to pay back with interest, and that interest is already taking a huge bite out of our province’s finances, $4.7 billion this year alone,” Binda said.“That’s more money than this government is collecting in the carbon tax and motor fuels tax combined.”
He said if the Eby government had dealt with its debts, British Columbians could be looking at tax cuts, not the “constant tax hikes” it is seeing today.
“The very least taxpayers should expect from our politicians is that they’re able to stick to their own budgets,” he said. “Unfortunately, we’re not even seeing that bare minimum from the David Eby government.”
The B.C. NDP did not respond to True North’s requests for comment.
The next provincial election in B.C is scheduled for Oct.19, 2024.