Premier Eby defends budget after credit drop, but Opposition says B.C. is going broke

VICTORIA – British Columbia’s credit rating has been downgraded, but Premier David Eby said government made a “very clear choice” between making cuts to “meet a credit rating” and “prioritizing British Columbians.” 

“We have to meet people where they’re at,” Eby said at an unrelated event in Metro Vancouver. “They are sicker, and they stay in hospital longer. We need to ensure high-quality health-care services and services for British Columbians generally. We have to build these projects to get our province moving.”

Moody’s Ratings said Thursday it has lowered B.C.’s baseline credit rating to Aa1 from Aa2, among other changes in creditworthiness.

The agency said it has seen a “marked deterioration in the province’s credit fundamentals” and expects “sizable and entrenched deficits” for the next three years.

“This deterioration is driven by continued growth in operating and capital spending, resulting in large, structural deficits and rising leverage,” it said in a statement. 

While B.C. is looking for ways to raise more revenues and cut costs, “uncertainty related to global and U.S. trade conditions adds risks to the fiscal outlook,” it added.

This year’s budget forecasts a record deficit of $13.3 billion, and Eby said the budget was “incredibly challenging” for a number of reasons, including rising health-care and infrastructure costs.

Eby said this year’s budget presented government with a choice.  

“Were we going to, as the Conservatives suggested, make health-care bear the brunt of cuts to be able to meet a credit rating?” Eby said. “Or were we going to make sure that we were doing all we can to deliver services for British Columbians, find efficiencies in government and grow the economy to make sure that we’re able to pay for the services British Columbians deserve?”

Interim B.C. Conservative leader Trevor Halford said financial markets are telling the government that “B.C. is going broke,” and he said it is time for government to table a budget that restores confidence.

He said B.C.’s fifth credit downgrade in four years puts the provincial finances at risk, because of the growing interest costs. 

“Bond rating agencies are giving the NDP budget the equivalent of an F,” Halford said. “The government needs to take this seriously, go back to drawing board, and table a budget that will restore confidence in world financial markets.” 

Government figures forecast that B.C.’s debt will hit $183.3 billion this fiscal year, rising to $209.8 billion next year, and $234.5 billion the year after that.

Those same figures also forecast that B.C.’s debt-to-GDP ratio will rise from 30.6 per cent this year to 37.4 per cent in 2028-29.

The interest bite will rise from 6.2 cent on the dollar to 8.2 cent on the dollar in 2028-29.

Moody’s decision to downgrade B.C.’s baseline credit rating was not the only change to the provincial creditworthiness. Moody’s also downgraded B.C.’s long-term issuer and senior unsecured debt ratings to Aa2 from Aa1 and senior unsecured program and shelf ratings to (P)Aa2 from (P)Aa1. 

Moody’s added that B.C.’s outlook remains negative.

But Moody’s also affirmed B.C.’s commercial paper ratings, and had some praise for the overall economic direction.

“British Columbia’s credit profile is supported by a resilient and diversified economy that underpins a broad tax base and limits reliance on any single sector,” it said. 

It added that exports are also more diversified than those of most peers, with lower dependence on the U.S. market, which reduces single-market trade risk. 

“While the province is working to further diversify trade toward Asia-Pacific and Europe, the U.S. remains the main destination for several key exports, including natural gas, electricity and lumber, leaving these sectors exposed to the ongoing U.S. trade uncertainty,” it reads.

Finance Minister Brenda Bailey said in a statement that despite the rating change, B.C. remains one of the highest-rated Canadian provinces with strong access to global capital markets.

This report by The Canadian Press was first published March 19, 2026.