Fraser Institute: B.C. government’s land deals with First Nations threaten its ability to borrow money
Like any borrower, for the provincial government to borrow money there must be an investor willing to lend. The lending side has two groups—bond rating agencies and the actual lenders. Rating agencies analyze the sustainability of government debt to help lenders determine credit worthiness and the level of interest they should charge given the financial strength and creditworthiness of governments.
There are already worrying signs, with five downgrades of B.C.’s provincial debt by rating agencies in recent years. And there’s a real possibility that lenders will be increasingly reluctant—or potentially outright refuse—to provide debt financing to the B.C. government as its debt grows and the reality of bilateral agreements, related court cases and provincial legislation regarding Aboriginal title become clearer. This is not hyperbole. Lenders refused to provide financing to the governments of Nova Scotia and Saskatchewan in the 1990s and to Greece from 2009 to 2018. And in the early 1990s, lenders were increasingly worried about Ottawa’s debt level, causing marked increases in interest rates.
For the B.C. government (and thus, B.C. taxpayers), the financial risks linked with these agreements and court cases could result in marked increases in the interest payments lenders demand to compensate them for increased risks. Indeed, a one-percentage point increase in interest costs on the government’s existing debt would equal roughly an additional $1.9 billion this year alone. That means even more borrowing as the deficit increases.
And Victoria has racked up an almost unimaginable amount of debt in recent years, and the scale of the increase is unprecedented. Coming out of COVID in 2020/21, total provincial government debt stood at $87.1 billion and is expected to reach $183.4 billion this year (2026/27) and $234.6 billion by 2028/29, which is a total increase of 169.3 per cent in just eight years.
Re BC and debt / money …. I have a condo in BC on the ski hill at Fernie.
We have always called BC – Bring Cash because of the level of taxation of every type imaginable. BC is quite the socialist shithole but perfect if you are a queer commie!
The problem is less First Nations and more poor government. This …
“Coming out of COVID in 2020/21, total provincial government debt stood at $87.1 billion and is expected to reach $183.4 billion this year (2026/27) and $234.6 billion by 2028/29, which is a total increase of 169.3 per cent in just eight years.”
Add poor government to giving away your land to First Nations and I’m glad I don’t live in B.C.
It’d be a shame if they couldn’t borrow money anymore, eh?
Cryin’ shame.
Oh, they’ll lend all right and at reasonable rates, too. It would be a shame if a bank didn’t and problems developed within the bank.
I would not want to own property in BC now – lots can and will go sideways.
But I also think there is going to be a HUGE “reckoning” for all western governments in the next decade and for the people who have treated their homes as ATM’s.