Paul Forseth is a commentator from BC and served as a Member of Parliament from 1993 until 2006.Premier Eby called an election, but the BC NDP government cannot run on its financial record. Under Eby's leadership, it appears to be the greatest threat to healthcare and other social services. It has run huge, unsustainable deficits, and a cost crunch is coming. This fiscal year, the deficit may reach a staggering $14 billion. British Columbia's debt has grown significantly, shaped by fiscal profligacy, economic cycles, and recent infrastructure and pandemic-related spending.The BC government's financial behaviour has brought bond rating downgrades. The most recent downgrade occurred in April 2025, marking the fifth downgrade in a series of negative ratings from Moody's and S&P Global Ratings, reflecting ongoing BC budgetary disarray and high debt levels. As international confidence in BC governance declines, borrowing costs rise. The projected picture is as follows:.The bond market is beginning to expose what the government has desperately tried to hide. This is happening because governments borrowed heavily when money was cheap and convinced themselves that interest rates would remain artificially low for some time.This is how a debt crisis begins. It does not require a government to admit that it is bankrupt. Capital begins demanding more interest to lend the government money. As interest rates rise, refinancing existing debt becomes more expensive, creating a larger deficit that forces more borrowing. The government then enters a vicious cycle of borrowing to service what it already borrowed.The Ministry of Finance cannot dictate what investors must accept. If the market wants 6% or more to absorb government paper, then that becomes the cost of borrowing, regardless of what politicians proclaim..Governments enjoyed declining interest rates and misbehaved to gain political popularity. They expanded the welfare state, bureaucracies, and project spending while refinancing yesterday's promises. Now the debt issued at 2% matures and must be replaced at 5% or 6%. Nothing new is purchased, so the interest expense explodes. They are paying more for the same old debt.This is where the political crisis begins because the NDP will not voluntarily admit they made promises they can no longer afford. They will have to raise taxes, cut services, raid pension funds, impose regulations on capital, blame speculators, and express resentment against the so-called rich before admitting that the problem was their own spending and borrowing. At the same time, they will continue ideologically discouraging the business sector. Blaming Trump is not working. Consequently, the socialist tax increase, driven by ideological resentment, was announced on October 4. The provincial personal income tax is on top of the federal income tax. The proposed rates by income bracket are:$190,504 to $265,545: The tax rate would rise from 16.8% to 18.8%$265,545 to $1 million: The tax rate would rise from 20.5% to 22.5%Over $1 million: The tax rate would rise from 20.5% to 24.5%Premier Eby made the announcement Sunday while campaigning in Comox on Vancouver Island. Earlier in the campaign, Eby promised to introduce a new tax on empty condominiums. .In response, the BC Conservatives said the NDP plan would mean taxing doctors, specialists, and other highly sought-after talent that every community is fighting to recruit. The increase would likely drive some doctors out of the province. There appears to be no problem the NDP doesn't think can be fixed by raising taxes. In contrast, BC Conservative leader Lorne Doerkson announced on September 27 that he would impose no new taxes on British Columbians throughout his government’s term. Spending politicians will eventually tell taxpayers to sacrifice personally because they spent money without planning for who would ultimately pay the bill. Their political ideology of envy and resentment cannot build a prosperous society with the resources to meet real needs.The bond market is beginning to answer the unspoken question. It is pricing the government according to confidence, and confidence cannot be legislated. When capital starts questioning sovereign debt through rating downgrades, the government can give all the speeches it wants and try to shift the blame. However, the market ultimately decides what the promises are worth. BC voters will decide the worth of their politicians on October 24.Paul Forseth is a commentator from BC and served as a Member of Parliament from 1993 until 2006.
