B.C. debt grows 50 per cent in two years to $134b despite lower-than-expected deficit

The provincial government ended its fiscal year in the red, according to audited public accounts.

British Columbia is weighed down by rapidly growing debt despite a lower-than-forecasted deficit for 2024, something that Finance Minister Brenda Bailey said the government is working hard to address.

But Bailey said the province needs to grow its revenue in addition to finding efficiencies in spending, a challenge in the economic uncertainty driven largely by tariffs imposed by the United States.

With that backdrop, Bailey said current debt levels are necessary in the shorter-term to fund infrastructure such as hospitals, schools and transportation networks while the province works toward a longer-term solution.

“Yes, we are experiencing increased debt,” Bailey said Thursday during the release of B.C.’s public accounts for 2024-2025. “And that reflects the fact that our government remains committed to ensuring that we support British Columbians, and we’re going to continue to do that.”

B.C.’s final deficit for the fiscal year came in at $7.3 billion, $564 million lower than the number projected in Budget 2024 and about $1.8 billion lower than the most recent third-quarter forecast.

But provincial debt climbed to almost $134 billion, spiking 50 per cent in just two years.

It includes a $23.7 billion boost in taxpayer-supported debt from the previous year, bringing the figure to $99.1 billion — an increase of more than 31 per cent.

The Finance Ministry attributed the debt spike to the province having “supported people through climate emergencies and high costs,” and Bailey said the province was working on an efficiency review to find spending cuts.

But she said B.C. cannot rely on cuts and must increase revenue despite the current economic headwinds.

“There is no question that that challenge is more complex in the current trade environment,” she said. “But British Columbia has everything we need to be successful.

“We have incredible natural resources. We have amazing skilled workers and we have incredibly determined entrepreneurs. And our task as government is to set those groups up for success. That is the work we’re doing now.”

The B.C. Conservatives’ finance critic Peter Milobar said in a statement that the rising debt levels aren’t being reflected in the level of support for the public, saying the government was “racking up record levels of debt while delivering the worst public services in a generation.”

“This year alone, the NDP added $15.78 billion in new operating debt — and what do British Columbians have to show for it?" Milobar said. “ERs are still closing, schools are crumbling, and ferries can’t run on time.”

“David Eby isn’t just borrowing more — he’s making life more expensive for future generations while failing to fix anything today,” he said of B.C.’s premier.

University of British Columbia Sauder School of Business associate professor Thomas Davidoff said the public accounts match what’s typically seen in an economic downturn where there’s “more need and less revenue.”

But that didn’t mean cost savings can’t be found if the province is willing to change tack on certain policies.

“I am confident that there are some inefficiencies, as there are in any budget,” Davidoff said in an email. “If I were in charge, I would not spend money on trying to make brand new housing units affordable, for example.”

Greater Vancouver Board of Trade president Bridgitte Anderson said she recently met Minister of Jobs and Economic Growth Ravi Kahlon to express concerns about the “dire” situation faced by businesses in light of tariffs and trade uncertainty.

The board launched a campaign in January to challenge to province to achieve three-per-cent annual economic growth.

“It is very clear that there needs to be an economic growth plan plus a sound fiscal plan to get us back in track, and the government has been talking about that and making some indications that they’re going to do that,” she said.

The public accounts show B.C.’s taxpayer-supported debt-to-GDP ratio was still lower than most other provinces at 23.2 per cent, compared with 41.6 per cent in Ontario, 41.9 per cent in Quebec and 22.1 per cent in Alberta.

So-called self-supported debt, incurred by revenue-generating Crown corporations and other entities, also rose from $32.1 billion to $34.8 billion.

BC Chamber of Commerce interim chief executive Alex McMillan said the taxpayer-supported debt-to-GDP ratio is a figure his group focuses on, so that future generations are not burdened with paying for services received by people today.

“There’s the debt to build stuff like the hospitals, the schools, the roads that we need,” McMillan said. “But then there’s the debt to pay for services that we’re receiving today, which is really what I think that the business community is most concerned about.”

Bailey said B.C. was able to report a lower-than-projected deficit largely due to revenue from the Insurance Corporation of British Columbia.

But the higher revenues from ICBC and elsewhere, were offset by lower natural resource revenue, her ministry said.

Bailey added that the deficit coming in lower than projected does not offer her any comfort.

“Let’s be clear, it’s a $7.3 billion deficit, and I take that very seriously,” she said. “We have a lot of work to do ahead of us to get back to a path to balance, and that’s the work that we’re engaged in now.”

Total revenue was about $2.5 billion higher than expected, while GDP grew by 1.2 per cent, lower than the Canadian average of 1.6 per cent.

The ministry said the province spent a record $10.4 billion on infrastructure including roads, hospitals and schools.

Among the projects were the Mills Memorial Hospital replacement in Terrace, the Broadway Subway in Vancouver, and high schools and student housing throughout the province.

The unemployment rate was 5.6 per cent.

“While our work to improve our fiscal position is underway, it is clear that, despite challenging economic conditions, this government is making progress on the things that matter to British Columbians, Bailey said.

The province is expected to release its first quarterly report for the current fiscal year on Sept. 15. Bailey’s budget in March forecasted a record deficit of about $10.9 billion.

This report by Chuck Chiang, The Canadian Press, was first published Aug. 7, 2025.