Fraser Institute News Release: B.C. government increased spending by 27.7% since 2016/17, triggering debt boom

VANCOUVER, BC, Feb. 19, 2025 /CNW/ - After nearly two decades of fiscal restraint, the British Columbia government has increased per person inflation-adjusted program spending by a projected 27.7 per cent from 2016/17 to 2026/27, putting the province's finances at risk, finds a new study published today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

"Since 2016, the B.C. government has significantly increased spending and racked up mountains of debt in the process," said Ben Eisen, senior fellow at the Fraser Institute, and co-author of Spending is the Cause of B.C.'s Debt Boom: 2025 Update.

Specifically, from 2000 to 2017, program spending grew at an average annual rate of just 0.5 per cent per person, compared to 4.8 per cent from 2017 and 2023 (all numbers adjusted for inflation). Again, that's an increase of more than 27 per cent.

This spending increase—which excludes COVID-related spending—has serious implications for provincial finances because much of the new spending was financed by borrowing. This borrowing has increased the province's overall debt as share of the economy. A higher debt-to-GDP ratio can limit the government's ability to fund essential services and/or respond to future economic challenges.

For example, had the government simply maintained the rate of spending growth from the 2000-2017 era, B.C.'s debt to-GDP ratio—an indicator of the government's ability to service and manage its debt—would be 6.0 per cent today instead of a projected 27.4 per cent by 2026/27.

"For nearly two decades, British Columbia was on solid financial footing, but due to a spike in spending and borrowing, the province's finances have dramatically deteriorated," Eisen said.

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The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, Halifax and Montreal and ties to a global network of think-tanks in 87 countries. Its mission is to improve the quality of life for Canadians, their families and future generations by studying, measuring and broadly communicating the effects of government policies, entrepreneurship and choice on their well-being. To protect the Institute's independence, it does not accept grants from governments or contracts for research. Visit www.fraserinstitute.org

SOURCE The Fraser Institute

MEDIA CONTACT, Ben Eisen, Senior Fellow, Fraser Institute; To arrange media interviews or for more information, please contact: Emily Rigden, 604-688-0221 ext. 620, [email protected]