Monday September 15, 2025 | VICTORIA, BC [Posted at 2:30 pm | Updated 3:30 and 3:55 pm]
by Mary P Brooke | Island Social Trends
British Columbia’s 2025/26 First Quarterly Report was released today by Finance Minister Brenda Bailey.
The top line takeaway is that the province’s deficit is $11.6 B ($665 million more than projected).
Meanwhile, tariff impacts turned out to be less stringent than the projections though exports and investments are weaker than expected.
Bailey says that BC’s economy is diverse, and the BC is being developed with the intention of being the economic engine of Canada.
Certainly with BC having two of five projects included in the federal government’s first list of major projects (LNG Canada Phase 2 and the Red Chris copper mine) is a good sign of fiscal strength to come.
Bailey pointed to uncertainty as an influence on the three-year fiscal plan for the province.
There is a goal of achieving a $1.5 billion reduction in core government spending: $300 million in year 1, and $600 million in each of the following two years. Areas for cutting include contracts, office administration, travel, and discretionary advertising.
A further review of the health authorities and where money can be saved there is still in the works. “The savings are not yet in the forecast,” says Bailey.
There is a BC government worker hiring freeze. Most job elimination so far is due to attrition/retirement.
The Finance Minister says she hopes to reduce size of deficit.
Tax revenues:
In the first quarter corporate income tax revenue was up but that personal income tax revenues were down (both wages and household income). The Minister adds that services are even more important at a time when households are struggling.
The Province’s revenues from natural gas, copper, coal, and stumpage (forestry) are all down in first-quarter 2025/26.
Changes in timing of federal revenues include disaster funding coming later than expected. That’s on top of losing about $2 billion in carbon tax revenue.
Wildfire season costs up:
People are aware that this year’s wildfire season was hot, dry and ongoing.
The wildfire season cost is now shown as $851 million this year, more than in the original Budget 2025.
Tobacco settlement:
BC’s share of the Canada-wide provincial tobacco settlement with large tobacco companies is $3.7 billion over 18 years.
This year $2.7 billion will be shown as revenue. That is to reflect legal costs and discounting regarding the long term nature of the payment schedule.
Population shifts:
BC’s population growth rate was down by 0.9% — down from a previous increase of 3% in recent years.
The drop in population growth is a result of reduced immigration plus economic uncertainty, according to the finance minister today.
Homes sales down:
Homes sales are down 5.6% in the first quarter of 2025/26, and housing starts are down 3.3%.
Fewer house sales means less property tax revenue for the provincial government.
But the housing starts are higher than the 10-year average and are higher than at the start of the BC NDP government in 2017.
People have been shopping:
Retail sales were up seven percent at June 2025 compared to June 2024. But the province expects the pace of consumer spending to ease.
BC’s edge:
Finance Minister Bailey says that BC economy has the benefits of hardworking people, innovative businesses, and skilled creative workers.
BC Conservative comment:
The BC Conservative stance on today’s first-quarter fiscal update is that “creative accounting can’t hid a $11.5 billion deficit”.
Conservative Finance Critic Peter Milobar said the BC NDP government is being misleading by blaming global tariffs, saying “the real problem is reckless mismanagement and failed priorities”.
Milobar cites 70,000 people leaving BC, youth unemployment being up by 51,000, and business confidence being low.
Meanwhile, much of BC’s population surge in recent years was to take advantage of social programs, and now many of those people could be leaving. Youth unemployment is high right across the country.
Milobar says families are “paying the price for delays in health care, housing and infrastructure” though those delays are being addressed in what can only be a slow turnaround (training new personnel, lag time while housing is built, required timelines for major infrastructure).
BCGEU:
The BC Government Employees Union — which is currently exercising job action on picket lines — said today that the provincial government’s First Quarterly Report “confirms what we’ve been saying all along”.
“Investing in public service workers is critical for sustaining the services British Columbians rely on and to driving BC’s economy forward — in particular in our resource sectors,” said Paul Finch, President, BCGEU.
BCGEU says that today’s numbers indicate that “BC’s economy remains strong despite global volatility, with low unemployment numbers and a debt–GDP ratio that remains among the best in the country”, said Finch.
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