Post-secondary institution expenditures over the next three years will modestly increase, according to B.C.’s provincial budget tabled Tuesday afternoon, while the province will sink into a record-breaking $13.3 billion deficit.
Government expenses in the sector are projected to rise from $9.1 billion in 2025-26 and reach $9.5 billion by 2028-29, marking a $394 million or four per cent increase. The annual increase is not projected to keep up with inflation.
According to the government, the rise in expenses are primarily driven by amortization and operating costs associated with new major infrastructure initiatives across the institutions, and inflation on operating costs. Salary expenses are also expected to significantly contribute to the rising expenses as many unionized employees who work in post-secondary institutions and research universities have negotiated new collective agreements.
The province is also increasing the tax rate of the lowest income tax bracket from 5.06 per cent to 5.60 per cent. Additionally, school tax rates are going up, and PST exceptions on certain goods and services are being removed.
With marginal increases to post-secondary funding, some student organizations have already criticized the government’s spending plan.“If we want a strong workforce, investments in our colleges and universities must at least keep pace with inflation,” AMS VP External Solomon Yi-Kieran said in a statement on Tuesday.
“While Budget 2026 maintains current funding levels for post-secondary education, it does not come close to addressing decades of underfunding,” the advocacy organization B.C. Federation of Students (BCFS) wrote in a public statement on Tuesday.
The budget comes at a tumultuous time for the post-secondary sector.
Last November, the province launched an independent review of its public post-secondary education system set to be released this March, citing the “significant” financial challenges the sector has faced since 2018. The review, which aims to strengthen the sector, drive economic growth and ensure B.C. has the skilled labour force required to meet future needs, came at a time when many of the 25 post-secondary institutions in the province were in “a critical position,” according to the government.
With an environment riddled with high borrowing costs, global inflation and declining domestic enrolment, many institutions were already struggling before the federal government began implementing a series of policy changes in 2024 that would cap the number of international student visas issued to students in B.C. — along with other provinces. In November, the 2025 federal budget announced it would be further reducing these figures — by about half — at least for the next three years. From these caps alone, the B.C. government estimated a $300 million decline in the revenue in international student tuition.
In 2000, provincial funding made up 68 per cent of institutions’ operating revenue. Today, it is closer to 40 per cent, while tuition fees make up more than half of institutional revenue. Until 2023-24, international student tuition accounted for about 18 per cent of total revenues for the public post-secondary institution sector in B.C. That number is even higher at UBC, with about 22 per cent of the operating revenue derived from international student fees in the 2023-24 year. UBC’s 2025 budget forecasted this figure to tick down to 20 per cent in the 2025-26 year. According to the government, the changes to immigration targets could additionally affect tax revenue sources and demands for provincial government programs and services.
Nineteen of B.C.’s 25 public institutions are projected to operate at a loss over the next three years and for the first time, the sector is also facing a deficit.
In order to mitigate the impacts, post-secondary institutions, including UBC, have already implemented a series of measures to address the situation. This has involved hiring freezes, administrative budget reductions and program restructuring — including suspending and cancelling programs, and even closure of underutilized spaces. In the province, BCFS estimates that 177 programs have been cut, paused or suspended while more than 1,000 staff and faculty have been laid off. UBC has already confirmed reductions in operating budgets, staff reductions in certain units, hiring pauses and a new voluntary retirement program.
BCFS Chairperson Debi Herrera wrote in their statement that “the provincial government pushed institutions to rely on international student tuition to fill the gap left by declining public investment — despite clear warnings about the fragility of this model. Now that international enrolment is dropping, institutional deficits have exposed just how short-sighted this reliance on student fees really was.”
UBC will continue to receive funding for major projects
Several capital expenditure projects at UBC Vancouver remain under construction and partially supported by the province under the new budget, such as the School of Biomedical Engineering, the Gateway Building, Sauder School of Business Power House Expansion, the Advanced Therapeutics Manufacturing Facility and the St. John’s College redevelopment. The total remaining cost of these projects is $744 million and all projects are to be completed by 2030. While the province is supporting these projects until completion, a large portion of these costs are co-funded by other sources, like foundations, federal funding and revenues generated from services.
Investing in future skills
The budget set aside $30 million in funding to train highly qualified professionals in “priority areas” such as critical minerals, marine, transportation and advanced technology by adding specialized streams to existing post-secondary programs. Although it is unclear whether UBC will be a recipient of these funds, the budget states that investing in focused streams — such as engineering, geology, computer science, biology and aerospace — “will improve alliances between industry and post-secondary partners, and accelerate growth in technology-related degrees.”
Public sector job cuts will impact universities
The provincial government will cut 15,000 public sector full-time employees — including those in public post-secondary institutions — by the end of 2028-29 to “return the size of the public sector to a more sustainable level and prevent cuts to core services.”
“In the coming months, government will be developing specific targets for the public sector, including executive positions, with a focus on protecting front-line services,” the Ministry of Finance wrote in an email to The Ubyssey.
This represents 3.4 per cent of the public sector workforce and includes both the B.C. Public Service and the broader public sector, which includes roles within research and teaching universities and post-secondary colleges and institutions.
“To the greatest degree possible, the aim will be to achieve any workforce adjustments through attrition and voluntary departures,” the ministry wrote. The ministry did not say what percentage of cuts will occur in post-secondary institutions.
A significant portion of post-secondary funding will be assisted by the federal government over the next few years. The federal contribution — $702 million for the 2025-26 year — will increase annually up to an expected $751 million in the 2028-29 year, while the federal government’s contributions to other sectors across the province are expected to decrease by an average of about 10 per cent annually.
The budget did not outline any growth to student service programs, which includes student aid, scholarships, bursaries and loan forgiveness programs, or make any mention of the UBC SkyTrain extension despite multiple calls for action since the province committed to the project 18 years ago.
“For over 400,000 post-secondary students in BC, this budget was a disappointing document that failed to invest in our futures,” wrote Yi-Kieran.
