Today Minister of Finance Brenda Bailey tabled the BC budget titled “Securing BC’s Future” after setting the expectations of a budget for “serious times” to address economic uncertainty and long-term sustainability. BC‘s budget release kicks off the 2026 provincial budget season with Alberta’s budget scheduled for next week and other provinces expected to follow in the coming weeks and months.
In her speech to the BC Legislature, the minister of finance framed the budget as making “disciplined spending choices while growing BC’s economy.”
“This budget is about adjusting the pace of some things we want to do so we can do the things we need to do to secure BC’s future,” Minister Bailey said in her speech in the BC Legislature on Tuesday.
The budget arrives at a somber time with the legislature and province having cancelled, postponed or adjusted traditional start of session events around the throne speech in response to the tragedy in Tumbler Ridge on February 10. Traditionally, the throne speech sets the tone for the government’s agenda for the year. In the wake of Tumbler Ridge, the budget speech did double duty instead.
This budget also arrives at a complex moment for the province. Affordability pressures persist. Public sector negotiations continue. Trade uncertainty, sluggish growth, and broader economic headwinds remain very real. Heading into this year’s budget, Government signalled a focus on fiscal discipline and deficit reduction along with a commitment to protecting and improving core services and advancing economic growth.
A year of global uncertainty and national partnerships
Minister Bailey delivered her first budget as finance minister in March 2025, shortly after the fall 2024 election. The 2025 budget lock-up aligned with a dramatic day in the tariff story that saw Canada bracing for the realization of significant tariff threats from the US on BC’s budget day.
The subsequent year has been characterized by new geopolitical realities and shifting tariff threats, including pivots in policy commitments with a new focus on major projects, expansion and diversification of trade markets, and increased defence spending presenting substantial opportunities. The province’s Look West plan, released in November 2025, framed these priorities, with a goal to secure $200 million in private sector investment.
The removal of BC’s carbon tax due to political pressure had a significant impact on provincial finances and the first quarter report in 2025. Additionally, provincial finances and population growth are impacted by the federal government’s changes to immigration levels and international student policies.
Unlike other jurisdictions, BC is seeing resilience in exports despite the impact of US tariffs. Economist Bryan Yu wrote that BC’s export performance moved against the national pattern in November driven by increases in key sectors as well as reduced reliance on the US compared to other provinces.
BC has played a national leadership role in policy conversations since March 2025, including ongoing work to decrease inter-provincial trade barriers and investment in several high-profile trade missions to new markets. BC has also been one of the most successful provinces measured in terms of prioritization on the federal government’s major projects list.
In the current fiscal period, public sector bargaining continues for a large number of bargaining units even as the budget promises a leaner public service.
Economic outlook
Governments across the country and globally are grappling with deficits in the post-pandemic period. BC is no exception, and the deficit has been a primary focus prior to the budget release. While some organizations called for cuts to services before the budget, the province was clear that core services like health care, education, housing, and public safety remain priorities, which aligns with public opinion for expectations of these types of critical services.
Budget 2026 presents an updated deficit of $9.6 billion for 2025-26. This is down from the second quarterly report released in November 2025, which forecast an operating deficit of $11.2 billion. Minister Bailey indicated that the deficit reduction plan will see the deficit come down year over year with debt and expenditure management being prioritized over the long term.
Budget 2026 projects the following deficits over the fiscal plan period:
- $13.3 billion for 2026-27
- $12.2 billion for 2027-28
- $11.4 billion for 2028-29
The budget outlined how our province’s economic forecast is more positive than other jurisdictions, according to private forecasters. Our debt-to-GDP ratio is the second lowest in Canada and BC’s economic growth is projected to be tied for fourth among other provinces in 2026 and improving to second in 2027. The province developed Budget 2026/27 with the benefit of the federal government having delivered their budget first, with Prime Minister Carney releasing his first budget in November 2025. The federal government will transfer over $8.2 billion over three years to the province to fund commitments for programs ranging from health to transit.
Key budget priorities
Highlighted investments in Budget 2026/27 – 2027/28 include:
- $37.7 billion in taxpayer supported capital spending
- $2.8 billion in new spending for health care
- $634 million for the K-12 system
- $330 million in new childcare funding
- $475 million in new funding for children and youth with support needs
- $139 million for community public safety
- $400 million Strategic Investment Fund
- $283 million for skills training
Contingencies of $5 billion are included in each year of the three-year fiscal plan.
Tax measures
The budget frames changes to taxes as “updating taxation,” making the link from tax revenue to service provision in the province. The tax changes are intended to “prevent cuts to services” and keep income tax rates competitive. A number of measures are framed as lining up with taxation in other jurisdictions.
These measures include:
- Increase in tax rates for the first income bracket by 0.54%
- Increase to BC Tax Reduction Credit for low-income British Columbians
- Increase to the Additional School Tax rates from 0.2% to 0.3% for property values between $3 million and $4 million
- Expansion of the PST tax base to include professional services
- PST removal from some good and services
- Temporary 15% manufacturing and processing investment refundable tax credit
- Increase in speculation tax for foreign property owners
The proposed taxation updates still maintain BC’s income tax rates as the lowest in Canada for people making less than $149,000 annually. In addition, 40% of British Columbians will get an effective tax cut with the increase to the BC Tax Reduction Credit.
Continuation of the Expenditure and Efficiency Review
The province initiated an expenditure and efficiency review in early 2025 with the aim of finding savings in government operations. The budget states that they are on track for the review’s $300 million target. Premier Eby said before the budget that “there is room for us to reduce the bureaucracy, and administration while protecting core frontline services for British Columbians and that is what we are going to do.” Another $3.5 billion in estimated savings is targeted over the timeline of the fiscal plan.
For Budget 2026, the finance minister said that the budget focuses on making the public sector leaner. The budget commits to reducing the size of the public sector by 15,000 FTEs over a 3-year period while seeking to maintain frontline services. This initiative includes public sector FTEs outside of direct government service like health authorities, post-secondary institutions, and Crowns. The target also includes a reduction in management level and excluded positions, with about 1,500 FTEs already reduced largely through attrition. Voluntary departures and retirements are the primary mechanisms planned to reduce FTEs.
A continued focus on Look West and major projects
The Look West plan released in November 2025 remains the province’s economic plan, maintaining the focus on “nation building projects” with the potential to add to provincial revenue. Prior to the budget release, Premier Eby said the 2026 budget will emphasize “the shift to a new Canadian economy.”
- The mining sector has been a primary focus of the province in the past months. The budget continues the province’s focus on streamlining permitting and regulations with $40 million for permitting capacity.
- Skilled trades are tied to the priorities in major projects and infrastructure with $283 million in new funding.
- The new Strategic Investment Fund was highlighted as key to the major projects initiatives which will allow the province to capitalize on federal funding opportunities.
- The First Nations Equity Financing Program will launch this spring with the intention of a $1 billion special account for equity financing opportunities where there is “shared interest and readiness with the Province.”
- Manufacturing sectors and life sciences are both target sectors in the Look West plan, and both see new measures with a new temporary Manufacturing and Processing Investment Tax Credit and the exploration of a patent box regime for life sciences.
The expectation is that the major project investments generate revenue; however, most are not reflected in Budget 2026/27 due to their current status.
Maintaining core services to support British Columbians
The BC government has outlined its focus on safeguarding the services people rely on in Budget 2026 , like health care and education, and supporting people who need care and assistance. Capital spending remains focused on investments in schools, supporting post-secondary institutions, expanding and upgrading health facilities, supporting the transportation investment plan, and investments in housing.
The major change is the pacing of infrastructure projects so that the Province can manage cost escalation and the debt-to-GDP ratio. This “re-pacing” is an opportunity to sequence major projects over longer terms and, where needed, redesign projects to find savings. This will impact capital project timelines into the future, and we will be diving deeper into this in the coming days.
Examples of key capital projects include:
- The new St. Paul’s Hospital
- The Surrey Langley SkyTrain
- The Woodland Park affordable rental housing project in Port Moody
Budget 2026 invests significantly in children and youth with disabilities by providing families with direct funding for support services and adding more service providers in their communities.
Climate, conservation, and the environment
While the budget did not include headline references to CleanBC or new conservation strategies, it is clear that expanding clean energy capacity will remain a priority for this government.
Budget 2026 includes $35 million for the 2026 intake of the Clean Industry Fund, a program that supports the development, trial, and deployment of projects that reduce greenhouse gas emissions from large industrial operations across the province.
While the new $400 million British Columbia Strategic Investments Special Account has a primary focus to enable BC to work with the federal government as it invests billions of dollars to defend Canada’s sovereignty, creating jobs and economic opportunities, it will also focus on investments in the clean energy sector.
Funding largely remains stable across ministries with conservation mandates.
Access all Budget 2026/27 documents here.
Opposition parties respond
The BC Green Party responded to the budget in a press release Tuesday afternoon, criticizing the government’s focus on industry growth and maintaining the “status quo”, rather than investing in systemic issues in BC. The Greens questioned that focus, and argued that Budget 2026 does not prioritize services like health care and child care. Read more
BC Conservative Finance Critic Peter Milobar delivered the Opposition’s response in the Legislature, focusing on tax changes, criticizing income tax measures, and overall deficit projections. The BC Conservative response also criticizes the budget’s approach to health care and services for seniors. Read more