The credit agencies agree: David Eby is squandering B.C.’s fiscal credibility

He described the budget as “incredibly challenging” and argued the alternative would have been to let health care bear the “brunt of cuts.” He has tried to turn a warning about deteriorating finances into a morality play about compassion versus austerity. The public hasn’t bought it. The budget is the least-liked in the province’s recent history. The business community is enraged by tax increases and a feeble growth strategy. Eby’s personal rating has declined, as has his party’s. No serious critic argues B.C. should balance its books overnight by gutting hospitals, classrooms, or social supports. The issue Moody’s raised is not about government spending but about its path. Debt is rising so fast that even a province long regarded as a national fiscal standout is now being told it is losing the confidence that reputation once bought. The implication of the downgrade is not about one or two bad years but the perception of a prudent manager who has become a chronic overborrower. It has frittered a reputational premium as one of the better-run large provinces, a place with a strong economy, broad tax base, and enough restraint to preserve room for manoeuvre when a real emergency struck. That reputation made borrowing easier, helped reassure investors and gave governments a cushion when they needed to spend aggressively. A downgrade chips away at that. Eby would like the public to believe Moody’s was merely frowning because the government refused to worship at the altar of austerity. But rating agencies are not grading ideological purity. They are assessing whether a borrower looks increasingly risky. When Moody’s points to entrenched deficits, worsening fiscal management, and rising leverage, it is not asking whether the government means well but whether it appears to be in control. Right now, the answer appears to be: less than before. The premier’s framing is a choice between serving people and satisfying markets. In reality, sound finances are part of serving people. A government that weakens its fiscal position does not punish abstract bond traders. It narrows its own future options. It makes it harder to absorb recessions, trade shocks, disasters and demographic pressures without either raising taxes further or cutting programs later under much worse conditions. In other words, indiscipline today is often austerity delayed. This government has grown comfortable speaking as though every criticism of its finances is an argument against public services. The more responsible question is whether this government can distinguish between necessary spending and politically convenient spending, between strategic borrowing and habitual borrowing, between temporary deficits and structural ones. Moody’s has signalled that distinction is getting blurrier. Once governments lose the benefit of the doubt on financial management, every budget promise sounds less believable, every new spending commitment sounds riskier, and every external shock becomes more dangerous. That is why this downgrade should sting. Fiscal credibility is neither the opponent of public service nor the enemy of compassion. It is one of the conditions that makes durable public service possible and what makes compassion affordable when the next emergency arrives. And that is where the ratings agencies are converging. They are not saying B.C. is poor or that it lacks economic strengths. All of them acknowledge the province’s diversified economy, adequate tax base and strong market access. What they are saying is more unsettling: B.C. is still wealthy and creditworthy, but squandering it. And governments that treat fiscal discipline as optional eventually discover that markets, taxpayers and events do not.