B.C. Budget 2026: LNG Exports Shine as Business Groups Decry Deficits and Tax Hikes
Finance Minister Brenda Bailey's 2026 provincial budget for British Columbia presents liquefied natural gas exports as a significant economic bright spot, while facing sharp criticism from business organizations over mounting deficits and increased taxation.
Resource Sector Revenue Boost
The commencement of LNG exports from the Kitimat terminal in June 2025 has delivered substantial revenue growth for the province. By the end of the 2026-27 fiscal year, natural gas royalties are projected to reach $1.3 billion, representing a 38 percent increase in total royalty payments. This amount constitutes approximately 43 percent of the anticipated $3 billion in revenue from British Columbia's natural resources sector during that period.
"We're going gangbusters on this, because economic growth is going to help us," Minister Bailey stated during her budget presentation, emphasizing the government's focus on prioritizing economic expansion to secure the province's future.
Business Community Concerns
Despite the positive revenue projections from LNG, business groups have expressed significant dissatisfaction with the budget's fiscal direction. The Greater Vancouver Board of Trade awarded the budget a 'D' grade, citing concerns about ballooning deficits and accumulating debt over the three-year fiscal plan.
"The budget confirms slow growth, higher taxes, and continued runaway spending," said Bridgitte Anderson, CEO of the Greater Vancouver Board of Trade. "Despite significant new tax increases, the province's fiscal situation continues on a perilous trajectory, with an eye-popping $80 billion to be added to the debt over the next three years."
Economic Growth Measures
The budget includes several initiatives aimed at stimulating economic development:
- $241 million in additional funding for skilled-trades training programs
- $400 million allocated to a new "B.C. strategic investments account" designed to partner with federal spending on sovereignty projects
- Tax credits intended to encourage industrial development across multiple sectors
These measures target key industries including clean energy, value-added forestry, manufacturing, and artificial intelligence. The strategic investments account will enable the province to directly fund projects alongside federal government contributions.
Fiscal Challenges and Uncertainty
Minister Bailey acknowledged that the 2026-27 fiscal period remains shadowed by economic uncertainty. The budget represents what some analysts characterize as a "hold-the-line" approach, with line ministries expected to operate with reduced funding while the government pursues its economic growth agenda.
Business organizations had previously advocated for tax reform and measures to achieve three-percent economic growth, expressing disappointment that the budget instead introduces additional tax increases while projecting continued deficit spending.
The budget's success will depend heavily on the timely delivery of promised major projects beyond LNG exports, including initiatives to speed up mining permits and other resource sector developments that could provide additional revenue streams for the province.
