B.C. government had fastest provincial spending growth in Canada before pandemic

The End of Spending Restraint in British Columbia

Summary

• This bulletin analyzes fiscal developments in British Columbia since the election of John Horgan’s NDP government in 2017 to assess the extent to which fiscal governance in the province has been characterized by either change or continuity from the policy approach of its various predecessors since the turn of the 21st century.
• From the turn of the 21st century until recently, provincial governance in British Columbia has been characterized by spending restraint compared to most other provinces. This spending restraint contributed to positive fiscal outcomes.
• Starting in fiscal year 2017/18 and coinciding with the election of John Horgan’s New Democratic government, the pace of operating spending growth has accelerated.
• During the restraint era (2000-2017), real per-person spending grew at a compound annual rate of 0.5 percent. Since the start of 2017/18, the compound rate of real per-person spending growth has increased to 4.7 percent.
• British Columbia’s net debt to GDP fell from 18.4 percent in 1999/00 to 14.4 percent in 2016/17. In 2022/23, British Columbia forecasts its net debt-to-GDP ratio will increase to 15.6 percent.
• Canadian history has many examples of governments that have changed, but in which fiscal policy has not—it has maintained its continuity. There are also many examples of fiscal policy undergoing significant reorientation following changes in government. The election of the Horgan government is clearly an example of the latter.