B.C.'s response to the American-imposed tariffs has, so-far, included removing liquor from so-called red states, but Tuesday's annual provincial budget shows its British Columbia's finances that have turned a deep red.
B.C.鈥檚 Finance Minister Brenda Bailey presented a budget Tuesday (March 4) with a forecast deficit exceeding $10.9 billion in 2025-26 鈥� almost exactly $2 billion, or 22 per cent, higher than what was forecast in the previous year.
Meanwhile, the province is looking to a total of $84 billion in revenue and $94.9 billion in expenses.
Bailey presented these figures hours after the United States had imposed tariffs of 25 per cent on all Canadian goods, and 10 per cent on energy products.
Depending on the scenario, annual revenue losses for government could reach a high of $3.4 billion per year, and as low as $1.6 billion, through 2029.
鈥淲e are in for tough times,鈥� Bailey said. 鈥淏ut we are standing strong for B.C., working with communities, workers and businesses to strengthen our economy in B.C. for everyone.鈥�
Bailey called the budget 鈥渕easured," acknowledging that the budget does not include 鈥渟plashy鈥� new items. She blamed the higher deficit on a combination of deteriorating economic conditions over the past two years and failures by past governments to make adequate investments.
Government is now making up those deficits, Bailey said, citing the effects of the COVID-19 pandemic.
Bailey said budget protects the services on which British Columbians rely: healthcare, education, social services and public safety.
The budget also includes $4 billion in contingencies 鈥� up from $3 billion last year 鈥� to give B.C. the flexibility to respond to the impacts of U.S. tariffs, which Bailey predicts to be 鈥渟evere鈥� as job losses could mount. Under the most recent scenario, 45,000 British Columbians could lose their jobs because of the tariffs.
Bailey said the budget would also help grow the provincial economy by investments in critical infrastructure and key industries like film and mining.
She added that the budget also includes targeted relief measures: an ICBC rebate of $110 for eligible drivers in April 2025 and additional support for housing.
Government had already announced the cancellation of what would have been its signature budget policy, a $1,000 grocery rebate followed by a permanent middle-income tax break for 90 per cent of households.
Meanwhile, the carbon tax remains. It will rise by $15 per tonne to $95 per tonne April 1, generating about $3 billion in revenue for 2025-26. Government plans to return about half of that money to British Columbians in credits.
The province announced last year that it would cancel the part of the tax paid by consumers if the federal government eliminates the legal requirement for it. The Conservative Party of B.C., as well some economists, have long called for the complete elimination of the tax, citing it as a cost driver for businesses, as well as consumers.
Other economists and environmentalists have questioned the province's desire to cut the tax, due to its effectiveness in reducing emissions by changing behaviour and funding various programs that help to reduce carbon emissions.
Economists had been predicting higher deficits heading into the budget. However, the general forecast 鈥� at least for the next two years 鈥� foresees double-digit deficits; $10.9 billion in 2025/26 and $10.2 billion in 2026/27 before dropping to $9.8 billion in in 2027/28.
Bailey ensured that B.C.鈥檚 finances are sustainable and in better shape than those of other provinces, like Ontario.
This said, she promised an eventual return toward a balanced budget, but without giving a specific timeline. Bailey said it is her job to make that deficits do not become endemic.
Earlier, the province had announced a spending review and various hiring restrictions in the provincial bureaucracy. According to the budget, full-time equivalent jobs in ministries and special offices will hold at 38,900 for the next three years through 2027.
Higher deficits also mean higher debts for the foreseeable future. About four per cent from every dollar of revenue currently goes toward interest payments. Government expects that figure to eventually reach close to seven cents for every dollar of revenue by 2027.
Today's state of tarriffs and global unknowns has left unprecedented uncertainty, Bailey reiterated to journalists Tuesday.
As stakeholders and media reviewed the latest budget in the province's capital, Premier David Eby was responding to President Donald Trump's latest moves.
He called the tariffs a 鈥渂etrayal鈥� before outlining his government鈥檚 responses. They include the removal of all liquor products produced in 鈥楻ed States鈥� to get the attention of Republican lawmakers and prioritizing Canadian and B.C. products for government procurement contracts, he said.
He added that B.C. would fill in any gaps left by Ottawa鈥檚 retaliatory response to the tariffs. Bailey later acknowledged that B.C. is expecting money raised by retaliatory tariffs would flow to each province and territory. She also signalled that B.C. would announce additional measures in the future.
Eby also repeated earlier promises to speed up economic development, especially in rural and remote regions, consistent with environmental standards and in partnership with First Nations.
British Columbians, he added, can also play a part by foregoing travel to the United States and American products in favour of products from B.C.
Eby acknowledged that the tariff would hurt British Columbia, but also painted a scenario in which they spark a collective response that maximizes B.C.鈥檚 many strengths, including its strategic access to Asia-Pacific, resource wealth and tourism.
鈥淲e are going to pull together, we are going to fight and we are going to win,鈥� he said.
Eby also re-stated that Canada would never become the 51st state.
