A recent poll revealed that 36 per cent of British Columbians—that’s more than one in three residents—say they’re “seriously thinking” about leaving the province because of the cost of housing. Incidentally, last year B.C. experienced a net loss of 8,000 residents to other provinces. Given that the provincial government has failed to adequately address affordability woes, it’s no surprise that people want out.
British Columbia has some of the least affordable housing in Canada. It’s a simple supply and demand problem—housing costs rise when the number of would-be buyers or renters outpaces the number of available homes, and the province currently faces a generational shortage in housing. From 2018 to 2022, each year (on average) the province added 86,339 residents while only adding 39,776 home completions—which equals 2.2 new residents for every new house completed.
To fill this gap and restore housing affordability, an estimated 610,000 new homes must be built in the province by 2030. To meet this goal, annual housing completions must more than double. While the Eby government did introduce legislation earlier this year that begins to address the issue, mainly by helping reduce building fees, the government may not have gone far enough.
Housing affordability is not the only concern in B.C. According to the poll, many residents also worry about the cost of living, economic growth and government spending.
And British Columbians are right to be concerned. B.C. lags behind its regional neighbours (including Alberta, Washington and Oregon) on key measures of wellbeing such as per-person GDP (a broad measure of living standards) and employment income. In other words, British Columbians are worse off than residents in neighbouring jurisdictions. Yet despite this clear prosperity gap, the Eby government continues to pursue policies that make the problem worse.
For example, economic growth relies in large part on the ability of businesses to attract investment and capital to equip their workers with tools and technology that allow them to be more productive. Currently, a lack of business investment is driving a national emergency in terms of economic growth.
In B.C., although there’s a clear need to attract new investment, the Eby government’s fiscal policy is doing the opposite. Over the next three years, the government is expected to run annual budget deficits of at least $6.3 billion each year and accumulate $55.1 billion in new net debt (total debt minus financial assets).
Combined with long-term capital spending, this means that provincial net debt will reach a projected $128.8 billion by 2026/27, which is more than double the level in 2022/23 ($60.7 billion). Empirical research suggests that when government debt rises it can increase the costs of private borrowing, which can deter private investment.
Moreover, B.C. has some of the highest personal income tax rates in North America, which puts the province at a competitive disadvantage when trying to attract high-skilled workers. Reduced competitiveness, and the fact that high taxes reduce incentives to work and invest, further compounds the province’s economic woes.
B.C. has long been among the most desirable provinces to live in, but recent polling data suggests that many residents may leave (or have already left). While some factors are beyond its control, the Eby government should address widespread concerns about housing, economic growth and the dismal state of provincial finances to help make B.C. a desirable place to live again.
Grady Munro and Jake Fuss are fiscal policy analysts at the Fraser Institute.
