The B.C. government is now projecting a deficit of $11.6 billion, which is $665 million more than projected in the latest budget.
The government is projecting a deficit of $12.6 billion next year and $12.3 billion in 2027-28.
B.C. Minister of Finance Brenda Bailey said that despite disruption and uncertainty around global trade at this time, the province’s economy remains steady.
“While B.C.’s diversified economy is better positioned than many to weather these headwinds, there’s no doubt that tariffs are challenging our economy and there is pressure on our fiscal position,” she said.
“We’re being focused with our spending, making smart reductions where we can, being strategic with our investments to drive economic growth and foster innovation to build a stable economic future for B.C., and support the services people count on.”
Bailey said the increased deficit comes from decisions such as eliminating the carbon price (a loss of $2.8 billion), along with a decrease in revenue sources, such as property transfer tax (a loss of $247 million), sales tax, natural resources, federal government contributions and higher fire management costs.
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The 2025-26 deficit is partially mitigated by an increase in corporate income tax revenues and from B.C.’s share of the historic $32.5-billion lawsuit against tobacco companies in recognition of the harms caused by the companies’ actions, the province said in a statement.
“In the current fiscal and economic climate, we’re focusing on the key services that people and families need, and protecting the services we all depend on now, and for the future. This work is ongoing as we plan for Budget 2026,” Bailey said.
According to information provided by the provincial government, lower economic growth is projected for 2025 and 2026 due to impacts from tariffs, a slowing global economy and a slowdown in the housing market.
A stable labour market, exports of liquefied natural gas and an increase in residential construction are expected to help B.C.’s economy recover in the medium term.
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