British Columbia's deficit is expected to reach $11.6 billion in Fiscal Year 2025-26 — $665 million higher than initially budgeted.The government admitted their decision to eliminate the consumer carbon tax was largely to blame.According to Finance Minister Brenda Bailey, expenses for FY 2025-26 are forecast to be $74 million lower than expected, partially due to the elimination of the climate action tax credit. Debt servicing costs, however, are set to be $140 million higher than anticipated due to "a higher opening debt balance, higher interest rates, and accelerated timing of in-year borrowing."Revenue for FY 2025-26 is forecast to be $83.3 billion, which is $739 million lower than what was predicted in Budget 2025. Included in that number is BC's $2.7 billion share of a successful lawsuit against tobacco companies, though it should be noted that the sum will be split over 18 years.Natural resource revenue is set to take a $225 million hit, a result the government chalked up to lower commodity prices.."We've made a commitment to review every dollar being spent to make sure it's serving the needs of British Columbians and that work is reflected in our initial savings of $300 million this year," Bailey said. "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."The deficit is set to hit $12.6 billion in FY 2026-27 and $12.3 billion in FY 2027-28.The news was met with concern by the Canadian Federation of Independent Business, which urged the government to "show fiscal discipline by limiting spending growth and publishing a credible path back to balance.""The province’s financial picture is deteriorating at a moment when small businesses need stability," the CFIB lamented. "A record-setting $11.6 billion deficit should be a wake-up call. Small business owners are tightening their belts and making hard choices every day. They expect government to show the same restraint."They went on to note that, "businesses cannot be asked to shoulder more taxes and fees to plug budget gaps," and that "98% of small business owners told us they want government to focus on economic growth to balance the budget, not higher taxes."
