BC's five credit downgrades and a Trump excuse

Within living memory, British Columbia balanced its budget five years in a row.^⁠[1]

That was the Clark government, 2013 through 2017, while BC led the country in growth^⁠[2] and every agency rated the province AAA.^⁠[3]

Three records in a row

The NDP has budgeted a record deficit three years running. The $9.1 billion forecast for 2024-25 gave way to a $10.9-billion budget for 2025-26,^⁠[4] which came in at $9.6 billion,^⁠[5] then $13.3 billion for 2026-27, revised this month to $13.8 billion.^⁠[6]

Total provincial debt is now expected to pass $235 billion in 2029.^⁠[6] Taxpayer-supported debt climbs from 30.6% of GDP in 2026-27 to 37.4% in 2028-29.^⁠[5] RBC read the plan and found no path to balance and no point where the debt ratio stabilizes.^⁠[7]

Interest is the part you feel last. Ken Peacock calculates real per-person debt servicing nearly tripling, from $553 in 2022-23 to $1,432 by 2028-29.^⁠[8] That money buys no nurse, no teacher, and no bridge.

Interest payments of $6.5 billion a year are set to pass what BC spends on social assistance and disability payments.^⁠[9] S&P counts debt up 49% since Eby took office, to $183 billion this year, and rising toward 255% of operating revenue, "among the highest for Canadian provinces."^⁠[9]

Record deficits, and cuts anyway

Here is the part that breaks the usual defence. A deficit is supposed to buy something, and this one arrives alongside tax increases and a plan to cut 15,000 public-sector jobs over three years.^⁠[10] Record borrowing and shrinking services at the same time means the money is going to interest and to yesterday's promises, not to you.

What the rating agencies keep saying

S&P has downgraded BC five times since 2021, from AAA down to A.^⁠[3] Moody's has cut twice, citing "large, structural deficits and rising leverage."^⁠[11]

Eby shrugged at the March 2026 cut. His government, he said, made a "very clear choice" between cuts "to meet a credit rating" and "prioritizing British Columbians."^⁠[12] But British Columbians are getting the cuts anyway, along with the downgrades.

The government publishes no estimate of what the downgrades cost. A typical AAA-to-A premium of about 25 basis points would put it in the ballpark of $75 million a year, by Rob Shaw's rough reckoning.^⁠[9] That is money for nothing, paid every year the rating stays down.

What the borrowing bought

Unemployment went from 5.6% in 2024 to 6.8% by April 2026, the highest in more than a decade outside the pandemic, and CPABC describes an economy propped up by the public sector.^⁠[13] That April, BC had 44,700 fewer jobs than a year earlier, 56,300 fewer of them full-time, and 210,700 people out of work.^⁠[14]

By August the province was still down 16,400 jobs for the year, and its population had shrunk 0.9%.^⁠[6] Alberta has led the country in interprovincial migration for three straight years, with British Columbians the largest stream of arrivals.^⁠[15]

The excuse

Trump.

The tariffs are real and they hurt. They also arrived in March 2025, four years after BC's first downgrade and after two record deficits were already on the books.^⁠[3] The record $10.9-billion budget was tabled the same day the first tariffs took effect.^⁠[4] It was built long before them.

This month the finance minister blamed the trade war and a bad wildfire season for the latest deterioration.^⁠[6] The wildfires cost $614 million, and income tax came in $887 million over budget, more than covering them. The bigger hit was an accounting error that had overstated natural gas royalties by nearly $1.5 billion over five years.^⁠[6]

There is always a reason. It is never the decade of spending choices, and a government that cannot name what went wrong will not fix it.