B.C. government’s budget error underscores broader fiscal mess

Given so many other exciting happenings in British Columbia politics recently, a financial planning mistake may seem a bit mundane. But the Eby government’s budget error of $1.5 billion (or more) is a real scandal that deserves attention.

For background, on August 26, Business in Vancouver (BIV) reported that the provincial budget back in February contained an error—it massively miscalculated natural gas royalties. Simon Fraser University economist Nancy Olewiler estimated the error to be approximately $500 million per year. The government confirmed a budgeting error, but estimated it to be $292 million (on average) annually over five years, or approximately $1.5 billion in total.

Whatever the error’s true size, it’s not a trivial amount. Even the government’s low estimate of $292 million is equivalent to nearly nine per cent of the $3.4 billion it spent last year on police, courts, correctional facilities and other programs to protect people and property. Olewiler’s $500 million estimate equals almost 15 per cent of that spending. Considering crime rates in B.C., nine to 15 per cent of protective services is nothing to sneeze at.

While financial planning is often complex and everyone makes mistakes, the government made things worse with contradictory explanations and a lack of transparency, claiming it made an “administrative error” connected to “unit and currency conversions.” Moreover, while Premier Eby claimed to have no knowledge of this error, his energy ministry acknowledged it was told of the error back in July. In fact, according to BIV, Eby himself was hand-delivered a letter on July 14 detailing the mistake. So at best, those in government have been sloppy and forgetful; at worst they were misleading the public.

This latest budgeting misstep compounds the B.C. government’s already poor performance on fiscal management and transparency. The government’s public accounts for the 2025/26 fiscal year, published on August 10, showed a $7.7 billion budget deficit. Even after adjusting for inflation, it was the largest deficit in B.C. history, driven by significant spending increases in recent years.

For example, in the past decade, the provincial government’s headcount measured in FTE (fulltime equivalents) increased by 54.0 per cent, compared to only 16.8 per cent private-sector job growth (including the self-employed). The cost to B.C. taxpayers of this government employment growth amounts to approximately $13.2 billion annually over 10 years.

Moreover, the government did not report its massive deficit for 2025/26 until August 10, which itself is a sign of poor fiscal accountability and transparency. The government’s fiscal year-end is March 31. Why should it take more than four months to report its financial results? The answer is, it shouldn’t. Canada’s publicly-traded companies must publish their annual financial statements within 90 days of their fiscal year-end. Many companies, even large and financially complex ones, take far fewer than 90 days. For example, Canada’s large- and mid-sized publicly-traded banks have an October 31 fiscal year-end and publish their annual results in the first week of December. If they can report their financial results in just over a month, there’s no reason the provincial government should take more than four months.

Premier Eby’s office says it will correct its gas royalty revenue budgeting error in its upcoming fiscal update in September. That’s a good step, but it should have properly explained and disclosed the error as soon as it discovered it. And in addition to updating its forecasts, the government should also correct its overspending and report its finances in a more timely manner.