The provincial government says it needs to reassess the pace of its capital plan over the next three years and redesign projects to lower costs where possible, even as it emphasizes a commitment to protecting the services it says British Columbians need.
The province says this comes in the face of consistent pressures on its fiscal and debt outlook.
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“In addition, the ongoing trade war and tariff threats continue to drive global instability,” Budget 2026 says.
“Material and labour costs have remained persistently high. These create conditions where government must make careful choices on its capital plan in the long term.”
Budget 2026 includes provisions to ‘strategically sequence’ the construction of several major projects across the education, health, and long-term care sectors as a result.
For instance, the province says the Burnaby Hospital Redevelopment project will be reassessed before it moves to Phase 2 of construction.
“The first phase of this hospital project is experiencing delays due to changes in scope and the complexity of renovating an operating acute care facility,” Budget 2026 reads.
“Further work is needed to ensure alignment between scope, design development and cost assumptions in support of delivering the project within approved budgets. This provides an opportunity to refresh plans to ensure the project meets the needs of the community.”
While Phase 1 of the project is expected to wrap up next year, the new budget does not give an updated timeline for the launch of the second phase of construction, nor the completion of the project as a whole.
Phase 2 is currently estimated to carry a price tag of just over $1.8 billion.
Construction timelines on several long-term care homes in the province will also be reassessed to incorporate ‘lessons learned’.
While the province says it’s committed to meeting the needs of the aging population, construction costs on new long-term care facilities have soared.
“Government is experiencing significant and unsustainable costs per long-term care bed — up to $1.8 million per bed in some cases,” budget documents read.
Documents show at least four long-term care projects where costs have exceeded $1 million per bed, including St. Vincent’s Heather Long-Term Care in the Lower Mainland, and Dr. F.W. Green Memorial Home in Cranbrook.
The province says it’s conducting a full review of B.C.’s long-term care infrastructure program to find ways to bring costs down. That includes ‘streamlining mechanical, electrical, and engineering systems’ for better efficiency and looking at modular construction options.
It says once the process is complete, the province will be able to establish revised completion dates for projects and expand long-term care capacity with greater certainty in the years ahead.
Budget documents show there is no confirmed date of completion for long-term care projects in Abbotsford, Campbell River, Chilliwack, Kelowna, Delta, Fort St. John, and in Squamish.
Other projects being re-paced include an expansion of student housing at the University of Victoria, and several housing investments, which includes the reallocation of nearly $1.4 billion dollars across the three-year fiscal plan.
Finance Minister Brenda Bailey framed the capital as ambitious in spite of the re-pacing, and noted that capital spending is still expected to hit ambitious and record highs in the next year before tapering off slightly through the rest of the fiscal plan.
The budget notes the province has a limited number of contractors able to work on complex major projects like hospitals and complex transportation and transit projects — putting pressure on the government’s ability to fund other capital priorities at the same time.
“Furthermore, it leads to a boom and bust cycle of capital investment and increases risks associated with having to replace infrastructure at the same time in the future,” the budget reads.
The plan includes $38 billion dollars in capital spending over the next three years, and Bailey said that while that figure is more than $8 billion dollars lower than projected in last year’s budget, it’s still among the highest per capita in the country.
Bailey said the province is not cancelling projects, but recognizing that it needs to strategically sequence projects to address fiscal pressures.
The updated plan reflects a change in capital spending estimates since the 2025 budget — which estimated spending of $45.9 billion over the three years of that plan. The 2026 budget says the $8.2 billion difference is due to the completion of some major projects, like the new stal̕əw̓asəm Bridge, as well as the resequencing of projects as a result of the spending review.
