The British Columbia government is taking fire after the province saw its credit rating downgraded again by a pair of key rating agencies.
On Wednesday, S&P Global Ratings cut the province’s long-term issuer credit rating to A-plus from AA-minus, while Moody’s Ratings downgraded its baseline assessment to AA2 from AA1.
The agencies pointed to B.C.’s ballooning debt and multi-billion dollar deficits forecast annually into the near future.
“We have a significant deficit. We have committed to protect front-line services for British Columbians, to build hospitals, to build schools, we’re doing that work,” Premier David Eby said Thursday in response to the downgrades, citing the impact of U.S. President Donald Trump’s tariffs.
“And also we need a path to return to balance, that’s why the finance minister has been doing the work and we are doing a review of all of our programs to reduce spending in the provincial government on administration, on things that don’t deliver those front line services, on old programs that no longer meet the moment.”
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Carson Binda, B.C. director for the Canadian Taxpayers’ Federation, accused the province of using Trump’s tariffs as an excuse for the province’s finances.
Rating agencies, he said, were clear about what the problem is.
‘They are not blaming tariffs, they are not blaming Trump, they are blaming a weakening in governance from Victoria, they are blaming massive levels of borrowing, and they are blaming this provincial government for not having a plan to address any of those problems,” Binda said.
B.C.’s 2025 budget projected a record $10.9 billion deficit, which Moody’s predicted could climb as high as $14.3 billion. The province is still working out how to patch a $1.8 billion hole in its budget left by scrapping the consumer carbon price.
The provincial budget also paints a bleak debt picture, with total debt climbing to $156.6 billion this year.
By 2026-27 that figure is projected to top $209 billion, which would cost taxpayers seven cents on the dollar in interest servicing costs.
Binda said the downgrades will make that problem worse by raising borrowing costs for the government.
“This is going to make building new hospitals, building new schools more expensive for taxpayers,” he said.
The opposition BC Conservatives were also quick to pounce, with Leader John Rustad accusing the province of “reckless” spending.
“While global challenges are real, strong leadership can weather any storm,” he added in a statement.
“But instead of preparing for the future, this government keeps digging us deeper into debt, with no plan to get out.”
The NDP maintains despite the downgrades, the province remains in a better position than most Canadian provinces with respect to its debt-to-GDP ratio, unemployment rate and economic growth forecasts.
However, S&P’s downgrade warned that if the province’s “commitment to fiscal consolidation continues to waver” B.C. faces a one-in-three chance of a further downgrade in the next two years.
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