‘Securing B.C.’s future’ – Analysis of B.C. Budget 2026
Protecting core services amidst another large deficit
After warning she might be the “least popular person in the province,” Finance Minister Brenda Bailey tabled a 2026 budget built around difficult trade-offs while still deepening the province’s red ink.
With a new $13.3 billion deficit, the BC NDP government is betting voters prefer protecting core services over austerity-level cuts. Spending on health care, education and social supports is largely maintained or increased – a contrast New Democrats will make against Conservative calls to take a bigger bite out of the deficit.
Bailey says this year’s deficit comes alongside structural changes to slow spending growth. Major infrastructure projects are being slowed to manage escalating construction costs, while an internal spending review and public sector workforce reductions are expected to generate additional savings. The budget also raises modest new revenue through a small increase to the lowest income-tax bracket, PST adjustments on some goods and services, and higher school taxes on homes valued above $3 million.
Slow-to-moderate growth is expected, with real GDP growth forecast at 1.5% in 2026 – stronger than the national average, but well below recent years amidst global trade uncertainty. A new strategic investment fund, targeted business tax credits and the government’s Look West strategy will be leaned on to support longer-term growth.
“We are choosing to safeguard what we’ve built, while growing our economy to secure good jobs and economic prosperity for people and families.”
– Finance Minister Brenda Bailey
By the numbers
| $98.8 billion | $13.3 billion | 1.5% | $5 billion |
| Total spending (up 4.4% from 25-26) | Deficit in 26-27 declining over 3 years | Real GDP growth forecast 4th in Canada | in contingencies |
Speeding up major projects, attracting new investment
Digging out of the fiscal hole will depend on stronger economic growth, and the government is leaning heavily on its Look West strategy, which aims to unlock $200 billion in private investment over the next decade.
Budget measures include a new $400-million Strategic Investments Special Account to co-invest in major projects, a temporary 15 per cent refundable manufacturing and processing investment tax credit, an extension of the shipbuilding tax credit to 2027, and $283 million over three years for skills training for high-demand jobs.
Tax tinkering
The budget includes a series of targeted tax changes designed to raise modest new revenue while limiting the impact on most households. The lowest income tax bracket will rise slightly to 5.6%, adding about $76 annually for the average taxpayer, though rebates are expected to offset costs for many. The government will also pause tax bracket indexing from 2027 to 2030, increase speculation and vacancy taxes for foreign owners, adjust school taxes on homes worth over $3 million, and expand the PST to cover most professional services and eliminate some exemptions.
Safeguarding critical services
Health care spending will rise by $2.8 billion over three years to hire more frontline workers and expand mental health, addictions and involuntary care capacity. The budget also invests $330 million to maintain child care fee reductions while pausing new enrolment in the $10-a-day program.
New education funding includes $634 million for teachers and student supports, and another $475 million will go toward improving disability services for children and youth. The government will spend $139 million to target repeat violent offending and chronic property crime.
What’s next?
With another large deficit and few new promises, this is unlikely to be a popular budget. The government argues it reflects careful choices to set up B.C. for long-term success. Attention now shifts to an 11-week legislative sitting, where 20 to 25 bills are expected. The most contentious could amend the Declaration on the Rights of Indigenous Peoples Act following a court decision affecting private property rights.
Upcoming dates of note:
- May 28 – End of Spring sitting
- May 30 – New B.C. Conservative leader to be announced
- Sep. 14-18 – Union of B.C. Municipalities Convention
- Oct. 5 – Fall Sitting begins
- Oct. 17 – B.C. municipal elections