At a Regular Council meeting on March 16th, 2026, our Council approved a budget that will bring in a 3.5% tax increase, with 2% allocated to operating expenditures and 1.5% for infrastructure renewal.
To prevent a larger tax increase, the District was forced to reduce operating costs by $5,000,000 across a variety of departments. The choices are difficult, but we remain committed to the goal of careful fiscal discipline. As a Local Government, we are prohibited by Provincial Legislation from borrowing to fund operating expenses.
Not so the Provincial government, which recently tabled a budget that relies heavily on borrowing to fund operations. The 2026 budget forecasts a $13.3 billion deficit (the largest in Provincial history), with debt to rise to $178.5 billion in 2026, and then to keep rising to $230 billion by 2028-2029.
The cost of servicing this debt, meanwhile, is expected to rise from 4.7% of revenue in 2025-2026 to 7.9% in 2028-2029. In dollar terms, this will mean the Provincial taxpayer will bear an estimated $5.1 billion in annual interest payments in 2025-2026, rising to $8.7 billion by 2028-2029, much of this money flowing out of the Province to foreign bondholders. These facts have caused Moody’s to once again downgrade the Province’s credit rating, which will further increase the cost of borrowing.
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In defence of the budget, we have heard statements that these deficits will protect health care, which has been declining in quality and availability in recent years. But do sustained budget deficits actually serve the purpose of benefiting health care delivery in the Province? The “father of Medicare” and founder of the New Democratic Party, Tommy Douglas, was elected Premier of Saskatchewan in 1944, inheriting the second-highest per capita debt level of any Province at the time, at 38% of GDP.
By 1953, this debt had been fully retired, and the Douglas government ran budget surpluses continually throughout their 17 years in office. Premier Douglas believed it was better to spend on public services than on bond interest, and pursued a long-term fiscal strategy to maximize the money that could be available for achieving public goods.
In British Columbia, over the next four years alone, we will spend something in the order of $25 billion in interest payments to bondholders. Had we pursued better fiscal policies during this same time, we could have instead been building dozens of hospitals, dozens of schools, multiple rapid-transit projects, and addressing so many other social needs. This is why I support balanced budgets.
I couldn’t agree more with the sentiment of your well written article Jim. I may use it as a model. In the meantime is there a book that outlines how Douglas was able to achieve the financial remediation? Thanks for sending me this article.