Can B.C. Conservatives cut taxes, reduce the deficit and grow the economy at once?

The B.C. Conservatives may hold two-thirds of the seats in the next legislature, giving them a strong mandate to pursue election promises to cut taxes, reduce the deficit and grow the economy. The party forecast growth of 3.2 per cent, but several economists say achieving all three goals at once will be difficult.

Cutting taxes while fixing the budget “are contradictory,” said Werner Antweiler, a professor at the University of British Columbia. Marc Lee, senior economist with the Canadian Centre for Policy Alternatives, said the surge in government spending is also helping drive economic growth. That spending is behind a projected record deficit of $14 billion.

Premier-designate Lorne Doerkson has promised to appoint a panel to review the finances before presenting his government’s first budget. Jairo Yunis, policy director at the Business Council of B.C., said the review will not produce easy answers and the government faces tough choices. Public-sector employment has grown by more than 45 per cent since 2019 under the NDP, he said, while private-sector employment rose by only about three per cent over the same period.

Yunis said public-sector cuts should be a major part of a broad spending review, which could draw lessons from former federal Liberal prime minister Jean Chrétien and his governments. The review should ask whether the province still needs certain programs, whether work is duplicated and whether services can be delivered differently. “My point is to make choices based on priorities and outcomes,” he said.

Yunis said the deficit could be halved through the review, more discipline in the use of contingencies, economic growth and lower regulatory burdens. But it will not be easy. “That is going to entail a lot of hard choices,” he said.

‘Shrink we must’

The Conservatives promised to raise B.C.’s basic personal income tax exemption to $32,000, a $1,000 tax cut for most individual workers. Their platform pledged to reduce the deficit with the help of growth it forecast at 3.2 per cent, well above most predictions. It did not spell out what spending might be cut to balance the books.

Antweiler agreed the Conservatives would need to shrink the public workforce. But the government would also have to raise more revenue, and it cannot cut taxes and fix the budget at the same time, he said. Voters gave Doerkson a mandate, Antweiler said, but plans may need to change after the financial assessment, and nothing should be ruled out.

“There are things we cannot do right away, that may have to wait later until economic conditions improve [and] actually enable us to do that,” he said. “There needs to be a small dose of austerity to fix what is quite obviously broken.” He said the public service accounts for a “huge chunk” of expenditures, but reducing it can be difficult because it is heavily unionized. Doerkson’s government also cannot cut health care, education or public safety without compromising quality.

“Provincial governments have a limit how far they can go, because many of these expenditures are written in stone,” Antweiler said. He said public-service cuts must make a meaningful difference to the budget without triggering labour unrest. “But shrink we must, because I don’t think there is any other avenue,” he said.

The Conservative platform projects that economic growth will reach 3.2 per cent in 2029, generating an additional $2.62 billion without tax increases. Antweiler called the forecast “lofty” and unrealistic.

Lee said the provincial economy has sometimes improved quickly in the past, but uncertainty remains. “We don’t even know what is going to happen next week after the U.S. election,” he said. “If there is a major stock market crash, which seems incredibly likely in the next six months, that’s going to change the situation.”

Lee said B.C.’s economy runs on trade, housing and immigration, as well as government spending. The trade engine is sputtering because of the trade war, he said, while changes in immigration have left the housing engine “completely dead.” “The B.C. budget has been contributing to B.C.’s economic growth,” Lee said. “If we didn’t have that budget deficit, we would probably be in a recession.” He said reducing the deficit would require tax increases or spending cuts.

Antweiler favoured an all-of-the-above approach, combining cuts with higher revenues from economic growth and more indirect forms of taxation. He said the outgoing NDP government of Premier David Eby made a mistake by eliminating the carbon tax, leaving a $2-billion hole in the budget. He urged the next finance minister to consider all options, including higher resource royalties, shifting taxation from income to consumption and encouraging investment. The Conservatives may need to “jump over their shadow” and break their tax promises, he said.

Yunis said B.C. has more of a spending problem than a revenue problem and needs to improve its tax competitiveness. All three economists agreed the new finance minister faces a difficult file. “A new chapter needs to be turned now,” Antweiler said. “It’s not too late to turn the wheel around.”

This report by Wolfgang Depner of The Canadian Press was first published Oct. 28, 2026.