Officials have acknowledged that this is unsustainable. In Budget 2026, Finance Minister Brenda Bailey tried to find a middle way – improving the province’s finances without major cuts or large tax hikes. However, despite finding some efficiencies and promises to decrease the size of the civil service, it does present a real solution to the province’s financial woes. According to Royal Canadian Bank (RBC), while the deficit will trend down after 2026-27, there is no path to balance. RBC’s analysis states that “Budget 2026 achieves only minimal headway, with structural pressures remaining that will leave stabilizing BC’s fiscal situation a task to another day.” [1]

One of the most interesting parts of the Budget was the government’s choice to manage finances by “strategically sequencing” nearly $38 billion in capital projects. This means already approved projects (and some that are already underway) will be slowed down, scoped down or reevaluated. This move will have long term impacts on the province’s infrastructure.

The BC government does not want (and cannot afford) for their policies to slow the province’s economic growth. There were several investments meant to improve its economic outlook, including a new $400-million British Columbia Strategic Investments Special Account that will enable B.C. to take advantage of opportunities to work with the federal government as it invests billions of dollars to defend Canada’s sovereignty. The special account will help the Province attract investments that leverage B.C.’s strength in sectors such as clean energy, sustainable forestry manufacturing, responsible mining and clean technology. This special account will allow the Province to directly participate in the revenue growth of B.C. businesses through direct investments, equity and loans to support private-sector growth and good jobs for British Columbians.

There was also funds to remove barriers and avoid duplication in permitting across the natural resource and tourism sectors. This funding will build on efficiencies already created, which include:

• almost 35% more exploration permits issued in 2025 than in 2024
• reducing timelines for major mines applications by 35% since 2019
• record-breaking investments of more than $750 million in mining exploration.

This budget also includes a new, temporary 15% Manufacturing and Processing Investment Refundable Tax Credit for businesses investing in buildings, machinery and equipment used in manufacturing and processing. This measure will help businesses become more productive and competitive and help boost B.C.’s manufacturing sector.

The BC government also announced plans to work with industry and the federal government on examining the suitability of adopting a patent box regime in B.C. A patent box regime could provide a reduced tax rate on income made from intellectual property in B.C.

As Budget season continues, we can expect to see governments across the country make tough decisions about how to balance deficits and services. There will most likely be a trend of governments cutting civil service positions, trying to find operating efficiencies and focusing their spend on core, frontline services like healthcare and education.

[1] B.C. Budget 2026: Falls short on fiscal course correction amid challenges – RBC Economics