B.C. government to slow pace of building new housing and infrastructure projects, including Burnaby Hospital redevelopment
“After years of building up infrastructure to close gaps and strengthen services, B.C. is adjusting the pace of the capital plan,” states the budget document, noting the change will bring “more fiscal sustainability and predictability and will allow infrastructure investments to continue over the longer term” — effectively spreading out the major investments over a longer period of time.
Over the next three fiscal years through the 2028/2029 fiscal year, the provincial government is allocating $37.7 billion in taxpayer-supported capital spending, alongside $15.3 billion in self-supported projects by commercial Crown corporations — mainly in BC Hydro’s electricity generation and transmission infrastructure.
This includes $18.68 billion in taxpayer-supported capital spending in 2026/2027, $18.17 billion in 2027/2028, and $16.08 billion in 2028/2029. In 2025/2026, such capital spending reached $17.07 billion.
Major capital spending over the three-year cycle includes $13.8 billion for public transit and transportation — such as SkyTrain’s Broadway and Surrey-Langley extensions, which will reach completion in 2027 and 2029, respectively.
For years, it was stated that the George Massey Tunnel replacement project would begin construction in 2026, but this completely depends on the provincial government receiving an environmental assessment certificate. The budget hints there will be an updated construction budget and schedule after design and contract negotiations with the selected private consortium are finalized.
Another $11.1 billion will be spent on new and improved hospitals, and $3.9 billion for schools buildings.
Within that crowded queue are complex healthcare projects like the Burnaby Hospital redevelopment, now caught in a broader effort to stage work over a longer timeline.
The second phase of the redevelopment of Burnaby Hospital is by far the most expensive project in the 2026 budget to be re-paced, with the provincial government now intending to work with Fraser Health Authority to “refresh” the plans to ensure the project needs the community’s needs.
In the previous budget in 2025, it was noted that the second phase of the Burnaby Hospital redevelopment and the construction of a new BC Cancer Centre — complete with a new 160-bed inpatient tower, plus an oncology ambulatory care unit and chemotherapy and radiation therapy facilities — carried an estimated cost of $1.8 billion, with $1.771 billion covered by internal sources/borrowing. Construction was supposed to have begun in late 2025 for a completion in 2030.
The first phase of the hospital’s redevelopment will reach completion later this year at a cost of about $700 million, which is also largely financed by internal sources/borrowing.
There are still plans to proceed with the $1.96-billion redevelopment of Richmond Hospital, with construction on the new acute-care tower starting in 2028 and reaching completion in 2033. About $1.89 billion will come from internal sources/borrowing.
Many of the delays as part of the new strategy relate to approved long-term care projects to “incorporate the lessons learned from projects already underway and from its ongoing review of the long-term care infrastructure program,” including planned projects in Abbotsford, Campbell River, Chilliwack, Cottonwoods (Kelowna), Delta, Fort St. John, and Squamish.
Another project that will be re-paced is the student housing expansion at the University of Victoria.
Housing is also a central focus of the re-timing of capital projects. The provincial government states it is slowing the pace of new housing projects and reallocating nearly $1.4 billion across the fiscal plan. More than $900 million of that will be reinvested to support demand for existing housing services and programs, including increased funding for non-profit housing operators and additional assisted-living supports for seniors and people with disabilities. The budget also specifies support for thousands of new below-market homes through the Attainable Housing Initiative partnership with the Musqueam, Squamish and Tsleil-Waututh First Nations.
Even with the slowdown, the provincial government notes that housing spending remains elevated. The budget goes as far to state that housing capital expenditures are nearly five times higher than in 2016, framing the re-pacing as a sequencing change rather than a retreat from long-term targets.
The budget frames the overall approach as a balancing act: keep building, but not all at once.
Taxpayer-supported capital spending reached about $12.5 billion in 2025/2026, and it is expected to further increase to $13.66 billion in 2026/2027 before falling to $13.12 billion in 2027/2028 and $10.89 billion in 2028/2029.
The provincial government states lower capital spending in the near term helps improve the debt outlook. Taxpayer-supported debt — the method of funding most of these projects — is estimated to reach $116.5 billion at the end of 2025-26, about $2.2 billion lower than forecast last year, with the debt-to-GDP ratio now expected to be 26.1 per cent for that year.
Over the longer term, however, provincial debt is still projected to rise significantly as the B.C. government continues to build schools, roads, hospitals and public transit, with the debt-to-GDP ratio forecast to climb later in the decade. A large portion of the growing debt can also be attributed to continued substantial annual operating budget deficits reaching $9.6 billion in 2025/2026, and growing to a new historic record of $13.3 billion in 2026/2027 before falling to $12.17 billion in 2027/2028 and $11.44 billion in 2028/2029.
With continued major operating budget deficits and a heightened capital budget on the construction of new facilities and infrastructure, taxpayer-supported debt will jump by 23 per cent to $142.9 billion in 2026/2027, with further increases to $167 billion in 2027/2028 and $189 billion in 2028/2029.
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