Budgets are about choices.
With Budget 2026, the BC government has prioritized deficit and debt reduction at the expense of public investment that could have made life more affordable for BC families and built a more equitable future for the next generation.
Modest new tax measures are projected to add $757 million this year—a far cry from the $2 billion hole left by the elimination of the consumer carbon tax. The government’s unwillingness to ensure that higher income British Columbians and wealthy property owners contribute more is what’s keeping the deficit as high as it is.
BC Budget 2026 delivers modest new investments in skills training, health care, child care, K-12 education and services for children and youth with disabilities but cuts nearly $1.4 billion previously earmarked for housing investments over the next three years.
There is no relief for BC families struggling with the affordability crisis.
In addition, unspecified $3.5 billion cuts through so-called “expenditure management” and “recalibrating program delivery” have the potential to further strain already stretched public services. Fewer staff mean longer wait times for disability assistance, slower enforcement of labour and environmental protections and an erosion in service delivery.
Further, slowing down the delivery of approved long-term care projects at a time when our population is aging and access to long-term care is already stretched is asking vulnerable seniors to take the hit for reducing the provincial debt.
BC’s deep affordability crisis demands bold solutions. So do rising inequality, the housing crisis, uneven access to health care and child care, growing homelessness and the climate crisis. The cost of climate inaction grows every year as we see in the massive cost of fighting wildfires and dealing with floods.
Instead of asking those who have more to contribute more, the BC budget asks youth, working families, people in poverty and seniors to fend for themselves amid public services stretched beyond capacity and huge rural-urban gaps in access to health care, transit and other key services.
The delay in housing and health care infrastructure investment combined with public service increases that do little more than keep up with inflation will be deeply felt across the province.
Article sections
- Modest tax reform should have gone further
- What about the deficit?
- A budget that doesn’t meet rising poverty rates
- Abandoning the housing crisis
- Increasing the social service deficit
- Final takeaway
- Attend the briefing
Modest tax reform should have gone further
Positively, BC Budget 2026 indicates that revenue reform is on the agenda. Modest tax reform measures collectively raise $757 million this year, rising to $1,937 million in 2028/29. Unfortunately, the new tax measures fail to fully replace revenues lost from the carbon tax elimination.
The newly announced increase on the lowest personal tax rate from 5.06% to 5.60% as of July 1 is a step in the right direction but more could have been done to ask those who have more to contribute more.
The accompanying increase in BC’s tax credit ensures the small tax increase is offset for the lowest-income people. Taken together, these two measures would raise $353 million more this year and just under $400 million per year going forward. The maximum increase will be $201 in 2026 and the BC government estimates it will be paid by approximately 1% of the population.
BC Budget 2025 misses an opportunity to raise significantly higher revenues by, for example, increasing all personal income tax rates by the same amount that the bottom bracket tax rate. Personal income tax brackets and non-refundable credits will be frozen from 2027 until 2030 and represent an additional tax increase of about $500 million per year starting next year. There are small increases to property tax rates for residential properties valued over $3 million (from 0.2% to 0.3% up to $4 million and from 0.4% to 0.6% above $4 million), which could have gone farther.
Despite the revenue reforms tabled in Budget 2026, BC has still not recovered from sharp declines in the early 2000s and is raising far less revenues as a share of GDP than we used to.
What about the deficit?
The BC government is projecting declining deficits from $13.3 billion in 2026-27 to $12.2 billion in 2027-28 and $11.4 billion in 2028-29 with large contingency allocations of $5 billion each year.
While large, the deficits tabled in Budget 2026 are appropriate and manageable, not a threat to BC’s long-term fiscal health.
Taxpayer-supported provincial debt is projected to grow roughly on the same trajectory as what was projected at budget time last year, reaching $143 billion in 2026/27 or 30.6% of GDP. The provincial debt numbers will be the subject of many headlines but despite debt increases BC still has among the lowest debt-to-GDP ratios of any province, leaving the government room to maneuver.
The “interest bite” on taxpayer-supported debt in the BC budget remains reasonable today, though it is projected to rise from 5.1 cents per dollar of revenue in 2025/26 to 8.0 cents in 2028/29. The taxpayer-supported debt could be reduced if the BC government were willing to engage in bolder, progressive revenue reform to reduce the need for borrowing to cover current operating costs.
At a time when major trade and geopolitical tensions are driving deep economic uncertainty and slowing the economy, when a growing number of families are one job loss away from not being able to make ends meet, it is responsible to run large deficits to protect the services people rely on. The government should invest in programs that make life less expensive like affordable housing, low-cost child care, accessible transit and re-training programs.
Many of the big challenges BC faces today— child care, housing, health care, education, climate and poverty—have roots in earlier austerity and cuts to public services in the 2000s under the previous BC Liberal government. To make up for over a decade of underinvestment, the government has had to steeply increase investment in services and infrastructure. Despite some welcome reinvestment in recent years, a tremendous amount of work still needs to be done to undo the damage, restore and strengthen public services and invest in new and upgraded infrastructure that was neglected for decades.
A budget that doesn’t meet rising poverty rates
BC has the highest poverty among seniors of all the provinces and the second-highest overall poverty rate.
One in eight people in BC live below the poverty line and Food Bank use has surged 79% since 2019, including a shocking rise among people who work. In a province as wealthy as ours this is not only a disgrace but also extremely expensive. We all pay for poverty and homelessness in higher healthcare costs, lower school success, higher policing and criminal justice costs and lost productivity.
Budget 2026 adds $121 million over three years for income, disability and supplementary assistance—a negligible increase over the $3 billion over three years committed to last year, which did not move the needle on poverty reduction. There are no increases to income and disability assistance rates which continue to keep recipients well below the poverty line. At a minimum, the government must increase social assistance and disability rates to the poverty line and index them to inflation.
Announced last week, new income-tested BC children and youth disabilities supplement will provide much-needed support for families with children and youth with disabilities.
In December 2025, the removal of the spousal cap on disability assistance for couples with both partners on disability benefits and the increase in the annual earning exemption for couples where one person is on disability benefits and the other is not, have helped some families on disability assistance get more money in their pockets. However, the vast majority of people on disability benefits, who are single, have not seen their benefits increase for more than two and a half years (since August 2023) while inflation has gone up by 4.8%, grocery prices by 6.8% and rent by 11.4% over that period. People living on income assistance have also not seen an increase since August 2023 and are expected to survive on $1,060 per month, less than half of the poverty line.
Abandoning the housing crisis
A major contributing factor to poverty is the cost of housing.
Yet in this housing affordability crisis, Budget 2026 cuts nearly $1.4 billion from housing development. While $900 million of this cut is being reallocated to existing essential housing services and programs: non-profit housing, assisted living supports for seniors and people with disabilities and the Attainable Housing Initiative partnership with the Musqueam, Squamish and Tsleil-Waututh Nations—this will set the province far behind in reaching its goal to build affordable, non-market housing to 7,500 units annually—a target that needs to be increased. The province should invest in building 25,000 affordable, non-market units per year.
This lack of investment in the housing supply will exacerbate an already severe shortage, costing BC residents stability, affordability and opportunity.
Better housing policy is a lever that can offer increases to economic growth and productivity and increasing the affordable housing supply would increase government revenue, lowering rents and transportation costs for households. The higher density would also allow public infrastructure dollars to be spent more efficiently, rather than fueling sprawl, which is more expensive to service.
One in six renters spend over 50% of their income on housing. And our recent research finds that 43.7% of senior renters live in unaffordable housing (costing over 30% of income) and one-third of senior renter households are in core housing need. Yet there are no new increases to Shelter Aid for Elderly Residents (SAFER) or Rental Assistance Program (RAP) supplements. The number of SAFER recipients is just over 25,000 and the number of RAP recipients, just over 4,000 yet over 150,000 British Columbians are in core housing need.
And while Indigenous Peoples make up 40% of the unhoused population in BC the budget fails once again to fully fund the Urban, Rural and Northern Indigenous Housing Strategy, which would go a long way to mitigating this inequity.
Increasing the social service deficit
BC Budget 2026 cuts a drastic $3.5 billion from the public sector through “recalibrating program delivery” and cutting 15,000 FTE jobs over the next three years. The focus of the cuts is promised to be on managerial roles, which have increased significantly in recent years. It would have been better, however, to redistribute this spending to improve capacity of more critical staffing roles.
Core provincial staffing levels per capita are already substantially lower than they were in 2000, leaving critical agencies like the Employment Standards Branch (ESB) with massive backlogs. A fully funded ESB could ensure more wages remain in the pockets of workers. Worse, the province may be planning on replacing these roles with risky problematic AI systems, an investment in a speculative bubble that transfers wealth from workers to corporate shareholders while further eroding service quality. We cannot protect workers, enforce standards, or deliver essential services with a hollowed out public service.
Public services are critical for affordability.
Boosting investment in key public services creates good, family-supporting jobs and has significant macroeconomic benefits at a time of deep economic uncertainty, with every dollar invested in public services acting as an economic multiplier two to three fold. The private sector cannot function without a healthy, educated and housed workforce that is not overburdened by caring responsibilities for children, elders and family members with serious illness or disability. When public services fail, people must pay more out-of-pocket, which is effectively a massive, regressive tax on workers that hits lowest-income families hardest.
The budget provides $5.1 billion in new operating funding over three years for health care, education and social services and $15 billion in annual contingencies to address unforeseen costs.
It protects and marginally increases health care funding in order to respond to growing demand for health care services. $131 million of this funding is for “intensive mental health and addictions treatment,” committing to involuntary approaches to care rather than preventative and evidence-backed solutions.
Absent from the budget is a clear shift towards the evidence-based team-based model in primary care that could reduce costs across the health care system through a more effective use of health care workers and a focus on prevention. These models could better address mental health and addictions through wrap-around community-based services. Capital spending on health care has been reduced from $15 billion to $11.1 billion over the fiscal plan by pausing and “pacing” upgrades and new construction of hospitals and long-term care facilities.
Budget 2026 increases funding to child care by $330 million, which is essential for maintaining the affordability improvements made in recent years. However, the government has paused any expansion to the $10 a Day ChildCareBC program that parents in BC have been fighting for for years. This is a huge missed opportunity to support affordability for parents with young children, to support healthy child development and to support more parents in the workforce. This is a cost that will be borne by far too many BC families in need.
The budget also fails to address the existential crisis in our post-secondary sector, as the federal cap on international students collapsed a provincial revenue model built on the exploitation of racialized students. In the early 2000s, public funds covered nearly 70% of operating costs; today, that ratio has nearly inverted, offloading the burden onto students. By offering only marginal funding increases rather than restoring a publicly funded model, Budget 2026 guarantees that program cuts and job losses will continue while pushing higher education further out of reach for working class families as it foreshadows likely revisions to the 2% annual cap on domestic student tuition increases.
Final takeaway
BC families are squeezed—wages are not keeping up with the cost of living, young people can’t find stable work and food bank use is up 79% since 2019, including a shocking rise among people who are employed.
There are no easy answers in today’s slow economy, but there is some room for us, as a society, to make choices. We can choose to get serious about the pressing problems we face—like ballooning poverty—we can choose to strengthen our public services and build the affordable housing our communities need.
Or we could choose to continue to be a low tax province with low wages and frayed public services, with rising income inequality and persistently high levels of poverty. And this seems to be the choice our current government’s making.
This budget asks people to wait until the economy is stabilized. But we shouldn’t have to wait. The government could make policy choices that make life more affordable, create family-supporting jobs and address our serious social and environmental deficits as seriously as the budget deficit. These measures would help stabilize the economy.
Unfortunately, that is not the choice the BC government made with Budget 2026.
What does BC Budget 2026 actually mean for public services, affordability, climate action and your community?
Join us on Thursday, February 19 at noon PT to hear from our team and stand.earth guest Sven Biggs on how BC Budget 2026 could impact you and your community. There will be time for audience Q&A.
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