Loss of carbon tax boosts B.C. deficit as economic growth set to slide

British Columbia's forecasted deficit has hit a record high of almost $11.6 billion for the first quarter of the 2025-2026 fiscal year, largely due to the elimination of the carbon tax and amid ``global trade uncertainty.''

Finance Minister Brenda Bailey is also projecting higher deficits than she previously forecasted through to 2028 as growth slides, while the province's debt is predicted to spike by almost $60 billion over the next two fiscal years.

Bailey's fiscal update revises gross domestic product growth down to 1.5 per cent from 1.8 per cent in 2025, and to 1.3 per cent from 1.9 per cent in 2026.

The projected deficit is almost $700 million higher than the government's original $10.9 billion set out in the last update.

Deficits over the next two fiscal years are also set to spike by about $2.5 billion each year compared to predictions in the provincial budget, with a $12.6 billion deficit forecast in 2026-2027 and $12.3 billion in 2027-2028.

B.C.'s debt is also projected to rise to more than $212 billion in 2027-2028, up from about $155 billion in the current fiscal year.