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B.C. Credit Downgrade Signals Deepening Fiscal Trouble

Published

4 weeks ago

12 minute read

The Opposition with Dan Knight   Dan Knight

Spending is up, debt is exploding, and taxpayers are footing the bill—how David Eby’s reckless economics just pushed British Columbia one step closer to the brink.

So here’s something they’re not going to explain on CBC—British Columbia just got slapped with yet another credit downgrade. Actually, two. On April 2nd, both S&P Global and Moody’s—two of the most powerful financial watchdogs on the planet—downgraded B.C.’s credit rating. And not by accident. This wasn’t a glitch in the system or some market hiccup. This was a direct consequence of political recklessness.

Let’s talk numbers. S&P cut B.C.’s rating from ‘AA-’ to ‘A+’. Moody’s dropped it from ‘aa1’ to ‘aa2’. That’s the fourth downgrade in four years. Four. This is a province that used to hold AAA status—the financial gold standard. That means British Columbia was once considered one of the most fiscally stable jurisdictions not just in Canada, but globally. Not anymore.

Even more alarming? S&P didn’t just hit their long-term rating—they downgraded the short-term rating too, from ‘A-1+’ to ‘A-1’. Why? Because even in the short term, B.C. is starting to look like a risk. A liquidity risk. That means the money might not be there when it’s needed. That’s a red flag for anyone with a calculator and a memory longer than five minutes.

This is not some vague bureaucratic move. This is a direct indictment of the NDP’s economic policies in British Columbia. This is what happens when you treat taxpayers like an ATM machine and the economy like a social experiment. And now, international financial institutions are officially saying what a lot of people have been screaming for years: B.C. is in serious fiscal trouble.

Causes: Spending, Deficits, and Revenue Pressure

The core driver behind the downgrades is the ballooning of operating and capital deficits, coupled with aggressive government spending. According to B.C.’s 2025 budget, unveiled by Finance Minister Brenda Bailey on March 4, the provincial deficit is projected to hit $10.9 billion in 2025–26—up from $9.1 billion the previous year. Moody’s projects an even higher shortfall of $14.3 billion, raising red flags about B.C.’s ability to fund programs without unsustainable borrowing.

S&P cited the impact of reduced immigration levels and ongoing trade uncertainty as key headwinds, limiting economic growth and shrinking the province’s revenue base. Moody’s pointed to persistent budgetary gaps and limited progress on deficit reduction, highlighting the growing gap between revenue and expenditure.

Additionally, spending growth has significantly outpaced both population and inflation. Data from the Fraser Institute shows that between 2019/20 and 2024/25, program spending increased by 51.6%, whereas only 29.2% was needed to keep pace with demographic and price trends. This excess has pushed real per-capita expenditures to historic highs, without a corresponding rise in revenue.

Opposition Blames NDP Mismanagement for Downgrade

But what does that actually mean for real people—not bureaucrats, not lobbyists—but the mom on a fixed income buying groceries? So I reached out to John Rustad, leader of the Official Opposition in B.C., to ask exactly that.

“Two downgrades! Absolute disaster,” he told me. “Under David Eby, we’ve gone from a AAA status to a single A with a negative outlook. This government’s reckless spending and irresponsible management will have a devastating effect—not just today, but for generations to come.”

He’s not exaggerating. According to Rustad, by the end of this fiscal period, B.C.’s debt will have nearly tripled since the NDP took power. Let that sink in—tripled. And no, this isn’t just some abstract macroeconomic trend. This hits you. Directly.

Rustad laid it out. These downgrades mean higher borrowing costs for the province. That’s code for more taxpayer money getting funneled into interest payments instead of hospitals, schools, or—God forbid—tax relief.

“By the end of this fiscal plan, even before the downgrade and before the loss of billions in carbon tax revenue, interest payments were projected to hit $7 billion annually,” Rustad said. “That’s about 30% of personal income tax revenue—just to pay the interest.”

That’s money you send to Victoria every month—just lighting it on fire.

And with the downgrade? Expect to pay another $1 billion more in interest. That’s around $200 per person, per year. Not for roads. Not for services. Just to keep the debt monster fed.

Meanwhile, Premier David Eby—well, he’s had months to plan for replacing the carbon tax, and guess what? Still no plan. Rustad told me he expected Eby to raise industrial taxes to make up the difference, but even that hasn’t happened yet. For now, the hole is just growing—a $2 billion loss in carbon tax revenue on top of an $11 billion deficit.

So What Does This Mean for the Average Mom?

In response to a direct question about what this credit downgrade means for a mother living on a fixed income, Opposition Leader John Rustad laid out the long-term consequences in no uncertain terms:

“The average person will not notice this immediately. But what it does mean is higher borrowing costs, So with the massive deficit and debt, more money will need to be spent on interest payments. By the end of this fiscal, before loss of billions in carbon tax revenue and before the debt downgrades, interest payments would increase to about $7 billion by the end of the fiscal plan. To put that in perspective, that would be the equivalent of 30% or more of personal income taxes just to pay interest.”

He continued:

“The debt downgrades mean the province will have to pay more in interest—likely 1/4 to 1/2% more. On $220+ billion, that could mean $1 billion more in interest. That could be about $200 per man, woman and child annually in more interest by 2027.”

And with no plan to rein in spending, Rustad issued a stark warning:

“The compounding problem is: will this mean service cuts, more taxes, or yet more debt to be paid by our children?”

Final Thoughts

So here’s a question no one on CBC is going to ask: What actually happens when a progressive government can’t manage a budget? I’ll tell you. You get poorer. That’s what happens. You, the person who gets up every day and works a real job, pays the price while the people in charge keep living large off your labour.

Let’s walk through it. First, you pay provincial income tax—a tax just for working. Imagine that. You go out, earn a living, and the government takes a cut just because you dared to be productive. Then there’s the PST—you buy something, anything, and you get taxed again. Why? Because you had the audacity to participate in the economy.

And then there’s the carbon tax, the holy grail of progressive grifts. This wasn’t about saving the planet—it was about propping up the very same government that couldn’t manage a piggy bank, let alone a provincial budget. That tax was floating David Eby’s spending addiction. Now it’s gone, and surprise—there’s no plan to replace it. Just more debt, more interest, and more economic chaos.

But wait—here’s the part that really insults your intelligence. After taxing you into the ground, they turn around and say, “Don’t worry, we’ll give you a rebate.” A rebate? You mean you’re going to give me back a tiny fraction of the money you stole from me and act like you’re doing me a favour? Please. That’s not generosity—it’s gaslighting. It’s economic abuse wrapped in a government cheque.

And that’s why I keep saying it: fiscal responsibility matters. Because I’d rather have that money in my wallet, feeding my kids, paying my bills, building my future—than watching David Eby burn it on pet projects, political theatre, and bloated bureaucracy.

But here’s the thing—there is hope. It’s not all doom and despair. In the last election, something incredible happened. The BC Conservatives, a party written off by the elites and ignored by the media, pulled off a political miracle. They surged from obscurity to contention—why? Because regular people are waking up. Because the voters who pay the bills, raise the kids, and still believe in common sense are done being treated like ATMs for a government that doesn’t even pretend to respect them.

And maybe—just maybe—after a little more pain, after a little more David Eby-style financial recklessness, the voters of this province will finally realize why fiscal responsibility matters. Not because it sounds good in a press release, but because without it, your future vanishes. Your freedom shrinks. And the people in charge? They just keep spending.

So next time, when the ballots are counted and the smoke clears, maybe British Columbia will finally remember who this province belongs to—not to bureaucrats, not to activists, not to the political class in Victoria—but to you.

And that day can’t come soon enough.

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Automotive

Major automakers push congress to block California’s 2035 EV mandate

Published on April 28, 2025

By

MXM logo MxM News

Quick Hit:

Major automakers are urging Congress to intervene and halt California’s aggressive plan to eliminate gasoline-only vehicles by 2035. With the Biden-era EPA waiver empowering California and 11 other states to enforce the rule, automakers warn of immediate impacts on vehicle availability and consumer choice. The U.S. House is preparing for a critical vote to determine if California’s sweeping environmental mandates will stand.

Key Details:

  • Automakers argue California’s rules will raise prices and limit consumer choices, especially amid high tariffs on auto imports.

  • The House is set to vote this week on repealing the EPA waiver that greenlit California’s mandate.

  • California’s regulations would require 35% of 2026 model year vehicles to be zero-emission, a figure manufacturers say is unrealistic.

Diving Deeper:

The Alliance for Automotive Innovation, representing industry giants such as General Motors, Toyota, Volkswagen, and Hyundai, issued a letter Monday warning Congress about the looming consequences of California’s radical environmental regulations. The automakers stressed that unless Congress acts swiftly, vehicle shipments across the country could be disrupted within months, forcing car companies to artificially limit sales of traditional vehicles to meet electric vehicle quotas.

California’s Air Resources Board rules have already spread to 11 other states—including New York, Massachusetts, and Oregon—together representing roughly 40% of the entire U.S. auto market. Despite repeated concerns from manufacturers, California officials have doubled down, insisting that their measures are essential for meeting lofty greenhouse gas reduction targets and combating smog. However, even some states like Maryland have recognized the impracticality of California’s timeline, opting to delay compliance.

A major legal hurdle complicates the path forward. The Government Accountability Office ruled in March that the EPA waiver issued under former President Joe Biden cannot be revoked under the Congressional Review Act, which requires only a simple Senate majority. This creates uncertainty over whether Congress can truly roll back California’s authority without more complex legislative action.

The House is also gearing up to tackle other elements of California’s environmental regime, including blocking the state from imposing stricter pollution standards on commercial trucks and halting its low-nitrogen oxide emissions regulations for heavy-duty vehicles. These moves reflect growing concerns that California’s progressive regulatory overreach is threatening national commerce and consumer choice.

Under California’s current rules, the state demands that 35% of light-duty vehicles for the 2026 model year be zero-emission, scaling up rapidly to 68% by 2030. Industry experts widely agree that these targets are disconnected from reality, given the current slow pace of electric vehicle adoption among the broader American public, particularly in rural and lower-income areas.

California first unveiled its plan in 2020, aiming to make at least 80% of new cars electric and the remainder plug-in hybrids by 2035. Now, under President Donald Trump’s leadership, the U.S. Transportation Department is working to undo the aggressive fuel economy regulations imposed during former President Joe Biden’s term, offering a much-needed course correction for an auto industry burdened by regulatory overreach.

As Congress debates, the larger question remains: Will America allow one state’s left-wing environmental ideology to dictate terms for the entire country’s auto industry?

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Business

Net Zero by 2050: There is no realistic path to affordable and reliable electricity

Published on April 28, 2025

By

  By Dave Morton of the Canadian Energy Reliability Council.

Maintaining energy diversity is crucial to a truly sustainable future

Canada is on an ambitious path to “decarbonize” its economy by 2050 to deliver on its political commitment to achieve net-zero greenhouse gas (GHG) emissions. Although policy varies across provinces and federally, a default policy of electrification has emerged, and the electricity industry, which in Canada is largely owned by our provincial governments, appears to be on board.

In a November 2023 submission to the federal government, Electricity Canada, an association of major electric generators and suppliers in Canada, stated: “Every credible path to Net Zero by 2050 relies on electrification of other sectors.” In a single generation, then, will clean electricity become the dominant source of energy in Canada? If so, this puts all our energy eggs in one basket. Lost in the debate seem to be considerations of energy diversity and its role in energy system reliability.

What does an electrification strategy mean for Canada? Currently, for every 100 units of energy we consume in Canada, over 40 come to us as liquid fuels like gasoline and diesel, almost 40 as gaseous fuels like natural gas and propane, and a little less than 20 in the form of electrons produced by those fuels as well as by water, uranium, wind, solar and biomass. In British Columbia, for example, the gas system delivered approximately double the energy of the electricity system.

How much electricity will we need? According to a recent Fraser Institute report, a decarbonized electricity grid by 2050 requires a doubling of electricity. This means adding the equivalent of 134 new large hydro projects like BC’s Site C, 18 nuclear facilities like Ontario’s Bruce Power Plant, or installing almost 75,000 large wind turbines on over one million hectares of land, an area nearly 14.5 times the size of the municipality of Calgary.

Is it feasible to achieve a fully decarbonized electricity grid in the next 25 years that will supply much of our energy requirements? There is a real risk of skilled labour and supply chain shortages that may be impossible to overcome, especially as many other countries are also racing towards net-zero by 2050. Even now, shortages of transformers and copper wire are impacting capital projects. The Fraser Institute report looks at the construction challenges and concludes that doing so “is likely impossible within the 2050 timeframe”.

How we get there matters a lot to our energy reliability along the way. As we put more eggs in the basket, our reliability risk increases. Pursuing electrification while not continuing to invest in our existing fossil fuel-based infrastructure risks leaving our homes and industries short of basic energy needs if we miss our electrification targets.

The IEA 2023 Roadmap to Net Zero estimates that technologies not yet available on the market will be needed to deliver 35 percent of emissions reductions needed for net zero in 2050.  It comes then as no surprise that many of the technologies needed to grow a green electric grid are not fully mature. While wind and solar, increasingly the new generation source of choice in many jurisdictions, serve as a relatively inexpensive source of electricity and play a key role in meeting expanded demand for electricity, they introduce significant challenges to grid stability and reliability that remain largely unresolved. As most people know, they only produce electricity when the wind blows and the sun shines, thereby requiring a firm back-up source of electricity generation.

Given the unpopularity of fossil fuel generation, the difficulty of building hydro and the reluctance to adopt nuclear in much of Canada, there is little in the way of firm electricity available to provide that backup. Large “utility scale” batteries may help mitigate intermittent electricity production in the short term, but these facilities too are immature. Furthermore, wind, solar and batteries, because of the way they connect to the grid don’t contribute to grid reliability in the same way the previous generation of electric generation does.

Other zero-emitting electricity generation technologies are in various stages of development – for example, Carbon Capture Utilization and Storage (CCUS) fitted to GHG emitting generation facilities can allow gas or even coal to generate firm electricity and along with Small Modular Reactors (SMRs) can provide a firm and flexible source of electricity.

What if everything can’t be electrified? In June 2024, a report commissioned by the federal government concluded that the share of overall energy supplied by electricity will need to roughly triple by 2050, increasing from the current 17 percent to between 40 and 70 percent. In this analysis, then, even a tripling of existing electricity generation, will at best only meet 70 percent of our energy needs by 2050.

Therefore, to ensure the continued supply of reliable energy, non-electrification pathways to net zero are also required. CCUS and SMR technologies currently being developed for producing electricity could potentially be used to provide thermal energy for industrial processes and even building heat; biofuels to replace gasoline, diesel and natural gas; and hydrogen to augment natural gas, along with GHG offsets and various emission trading schemes are similarly

While many of these technologies can and currently do contribute to GHG emission reductions, uncertainties remain relating to their scalability, cost and public acceptance. These uncertainties in all sectors of our energy system leaves us with the question: Is there any credible pathway to reliable net-zero energy by 2050?

Electricity Canada states: “Ensuring reliability, affordability, and sustainability is a balancing act … the energy transition is in large part policy-driven; thus, current policy preferences are uniquely impactful on the way utilities can manage the energy trilemma. The energy trilemma is often referred to colloquially as a three-legged stool, with GHG reductions only one of those legs. But the other two, reliability and affordability, are key to the success of the transition.

Policymakers should urgently consider whether any pathway exists to deliver reliable net-zero energy by 2050. If not, letting the pace of the transition be dictated by only one of those legs guarantees, at best, a wobbly stool. Matching the pace of GHG reductions with achievable measures to maintain energy diversity and reliability at prices that are affordable will be critical to setting us on a truly sustainable pathway to net zero, even if it isn’t achieved by 2050.

Dave Morton, former Chair and CEO of the British Columbia Utilities Commission (BCUC), is with the Canadian Energy Reliability Council. 

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