B.C. Deficit Forecast Climbs to $13.8B as Wildfire Costs and Trade Pressures Mount

Liam O'Connell

9/15/20262 min read

British Columbia’s projected deficit for the 2026/27 fiscal year has increased to $13.8 billion as the province faces higher wildfire costs, trade uncertainty and growing spending on tax credits.

Finance Minister Josie Osborne presented the province’s latest quarterly fiscal update Monday, her first since moving from the health portfolio to finance last month.

The new forecast is nearly half a billion dollars higher than the deficit projected in February.

Osborne said economic conditions through the first quarter have been mixed, with international trade tensions and a costly wildfire season placing additional pressure on provincial finances.

Wildfire Costs Rise Sharply

The province now expects wildfire-related spending to reach approximately $850 million this year.

That is about $614 million more than initially budgeted.

Spending on provincial tax credits has also increased by approximately $458 million, Osborne said, as more residents and businesses access programs including the renters’ tax credit and the production services tax credit.

The fiscal update incorporates the impact of the latest 50 per cent U.S. tariffs, although it does not include the effects of federal counter-measures introduced afterward.

Despite those pressures, Osborne said the province continues to expect stable, though modest, economic growth.

Exports Outside U.S. Increase

B.C. officials pointed to stronger trade with markets outside the United States as one positive economic indicator.

Goods exports to non-U.S. destinations have increased 16 per cent so far this year, according to the province.

International tourism has also risen 6.6 per cent.

Real gross domestic product, which measures economic output adjusted for inflation, is forecast to grow by 0.9 per cent in 2026 and 1.9 per cent in 2027.

Osborne said those numbers suggest the province remains on a path toward continued economic expansion despite the broader uncertainty.

Minister Addresses $1.5B Budgeting Error

Osborne also responded to criticism surrounding a major budgeting error that emerged in recent weeks.

The Energy Ministry previously said four separate mistakes were made while forecasting natural gas royalty revenues in the 2026 budget, resulting in an estimated $1.5-billion overstatement.

Osborne said the province now believes the eventual overestimate will be closer to $800 million over five years once actual royalty revenues are received.

The error has added to scrutiny of the government’s fiscal planning at a time when the projected deficit is already growing.

Milobar Calls Fiscal Update ‘Depressing’

Peter Milobar, MLA for Kamloops Centre and leader of a new provincial political party that has not yet been named, criticized the government’s financial position following the release of the report.

He described the first-quarter update as a “pretty depressing read.”

“Spending is quite literally out of control,” Milobar said.

He pointed to several capital projects that are not currently included in the budget, including seven long-term care facilities and the second phase of the Burnaby Hospital redevelopment.

“You see further delays; you see further cancellations,” he said.

Milobar argued that the province needs stronger private-sector investment to improve its fiscal outlook.

“It means that government has to not just talk about trying to attract large projects and get the private sector economy going, but they actually truly need to get out of the way,” he said.

With wildfire costs rising and trade tensions continuing, the province’s next fiscal updates will provide a clearer picture of whether B.C. can keep economic growth on track while managing a deficit that is now approaching $14 billion.

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