Minister of Finance Brenda Bailey tables her first budget in the legislative assembly at legislature in Victoria, on March 4.CHAD HIPOLITO/The Canadian Press
British Columbia’s Finance Minister Brenda Bailey delivered the fiscal plan for the coming year just hours after U.S. President Donald Trump made good on his threat from months ago to impose 25-per-cent tariffs on almost all Canadian exports. It meant that many of the assumptions included in hundreds of pages of documents bolstering B.C.’s economic plan, numbers from months ago, were already out of date.
In February, the Finance Ministry crunched the numbers anew, assuming 25-per-cent tariffs on most Canadian exports, except for energy and critical minerals with a 10-per-cent tariff. The ministry also assumed economic support from Ottawa and lower interest rates from the Bank of Canada.
Here are the budget highlights, delivered with ample caution about a volatile world economy.
Deficit:
B.C.’s deficit for last year was already the largest the province had ever tallied at $9.1-billion. Without taking into consideration the tariff impact, B.C. was expected to run a deficit of $10.9-billion next year. With the tariffs in place, the budget did not tally an expected deficit for 2024-2025, but noted revenue loss could be between $1.7-billion and $3.4-billion in each of the next three years.
The budget includes a contingency fund of $4-billion in each year, crucial for flexibility, Ms. Bailey said.
Growth:
The threat of tariffs – even before they became a reality – was putting downward pressure on growth projections. That, combined with lower population growth owing to federal government caps on immigration, meant B.C. had predicted modest growth of 1.8 per cent in the coming year, as compared to 1.2 per cent last year.
With the tariffs in place, the Finance Ministry expects B.C. will dodge negative growth – a recession – but barely: an increase of 0.3 per cent in the fiscal year that begins April 1. It amounts to a $43-billion cumulative decrease to real GDP by 2029.
Jobs:
The latest assumptions predict the loss of 45,000 jobs by 2029, the end of Mr. Trump’s term.
Debt:
The B.C. NDP had been criticized by the business community for driving the province’s debt levels up. Before the tariffs took effect, the B.C. government predicted taxpayer-supported debt to GDP would increase from 22.9 per cent last year to 26.7 per cent in the coming year and 34.4 per cent by 2029.
That means interest payments will eat up 4.9 cents per revenue dollar this year and rise to 6.9 cents by 2029.
New spending:
This was not a budget that offered new spending initiatives. Instead, Ms. Bailey stressed the budget was aimed at preserving core services. There will be more money for health care ($4.2-billion over three years to increase capacity) and a bit more for kindergarten to Grade 12 education to hire new teachers and other support staff. ($370-million.)
Vehicle owners with insurance from the Insurance Corp. of British Columbia will get a one-time rebate of $110
The number of lower-income families eligible for the province’s Rental Assistance Program will be doubled to nearly 6,000 families by raising the income threshold for the program to $60,000 from $40,000. The average supplement will increase to $700 from $400
Up to 1,600 more seniors will qualify for the Shelter Aid for Elderly Renters program by increasing the income threshold to $40,000 from $37,240. Payments will increase to $337 from $261.
Public safety:
Voter concerns about public safety and a dissatisfaction with NDP policies were among the factors that nearly cost the government the last election. In a nod to those worries, the government is investing an extra $325-million over three years for increased police funding, more police training seats and a new program to fight vandalism and other property crime.
Tax measures:
There are no new tax cuts.
The vacancy tax for foreign owners will rise to 3 per cent of their homes value by next January from 2 per cent, and for absentee Canadians and permanent residents, it will rise to 1 per cent from 0.5 per cent. The change is estimated to generate an estimated $47-million in revenue by the end of 2028