Budget 2025 was created during uncertain economic times as British Columbia faces tariff threats from the United States.

The uncertainty makes it difficult for the Province to predict the precise impact of tariffs, as well as what measures may be required to help people and businesses. The Province remains ready to respond to any scenario and defend British Columbians from these threats, protect jobs and the services people rely on.

B.C.’s diversified trading relationships have reduced reliance on the U.S. as a trading partner. The share of B.C.’s goods exports to the U.S. dropped to 52.8% in 2024, compared to 65.8% in 2000. At the same time, B.C. has expanded its trade relationships with key Asian markets, including China and South Korea.

In comparison, approximately 88% of Alberta’s goods exports and an average of 76.1% of Ontario and Quebec’s goods exports went to the U.S. in 2024. This places B.C. in a relatively better position than other provinces when it comes to mitigating the impacts of U.S. tariffs. However, the impact would still be significant.

Some sectors are more reliant on the U.S. for exports. For example, in 2024, B.C. exported all its natural gas and electricity and 74.8% of its softwood lumber to the U.S.

For goods coming into B.C., U.S. imports make up 34.5% of total incoming trade, including machinery and equipment, agriculture and food, as well as energy products.

To be best prepared, the Ministry of Finance has presented a range of possible impacts, based on information that continues to evolve.

An initial assessment released on Jan. 16, 2025, assumed a broad-based U.S. tariff of 25% on all goods from Canada and Mexico, and full retaliation of 25% in Canadian counter-tariffs on all goods from the United States.

The ministry has updated its assessment based on the Budget 2025 economic and fiscal forecast and more recent tariff information up to Feb. 4, 2025. This new scenario assumes 10% tariffs on Canadian energy products and a 25% tariff on all other goods from Canada and Mexico, along with partial retaliation from Canada, with 25% counter tariffs on less than half the goods imported from the U.S.

This scenario also assumes the federal government would provide supports as needed to households and businesses, as it has indicated, and that the Bank of Canada would lower interest rates.

This point-in-time scenario projects the following potential impacts of U.S. tariffs on B.C.’s economy and finances:

• $43 billion cumulative decrease to real GDP by 2029;
• 45,000 fewer jobs by 2029;
• unemployment rate increase to 6.4% in 2025, and 6.7% in 2026;
• $3.2 billion to $5 billion annual decline in corporate profits; and
• up to $1.4 billion annual loss in revenue.

The results of the Budget 2025 scenario are less severe than the Jan. 16, 2025, assessment, in part because tariff assumptions are lower and because the budget base case incorporates other economic changes since the fall 2024 fiscal update. However, combined these changes could result in provincial revenue losses of $1.7 billion to $3.4 billion annually if tariffs come into force. This is more than the budgets for most B.C. ministries, except for health, education and social service ministries.

Tariff impacts could be more significant depending on what policies are implemented, if federal support is less than assumed, if Canada’s retaliation escalates and if U.S. tariffs are stacked, resulting in even higher tariffs.

B.C. remains ready to respond to any scenario with a three-part response to U.S. tariffs by:

1. strengthening B.C.’s economy, including by expediting projects and supporting industry and workers;
2. diversifying trade markets for products so B.C. is less reliant on U.S. markets and customers; and
3. responding to U.S. tariffs with tough counter actions and outreach to American decision-makers.

As part of the response, the Province is streamlining the reviewing and permitting of major natural-resource projects that are ready to move forward. These projects are estimated to be worth $20 billion and to support approximately 8,000 jobs.

The Province is bringing together a broad coalition of allies to strengthen B.C.’s economy, diversify markets and respond as Team Canada, including a trade and economic security task force that brings together business, labour and Indigenous leadership.

A new premier’s task force on agriculture and food economy is working on both short- and long-term solutions to help farmers find new markets in the face of tariff uncertainty, and helping British Columbians get reliable access to affordable and nutritious food.

B.C. is taking a whole-of-government approach to defend B.C.’s workers, businesses, economy and to protect the services people rely on.

In an uncertain economic environment, it’s more important than ever to protect the services people rely on. Budget 2025 invests $7.7 billion over three years to support health, education and social services.

Health care
Budget 2025 provides $4.2 billion over three years to increase capacity in the health-care system, improve patient outcomes and support a growing demand for services. This includes $443 million to support the primary care strategy and more than $870 million toward the opening and operation of new facilities, including the new St. Paul’s Hospital in Vancouver, the Royal Columbian Hospital redevelopment in New Westminster, the Mills Memorial Hospital replacement in Terrace and Royal Inland Hospital enhancements in Kamloops.

As B.C.’s population grows and ages, additional facilities are needed to support the increasing need for health care. Budget 2025 provides $15.5 billion over three years in capital investments for new and upgraded acute care, long-term care and cancer care facilities throughout the province. Major projects include the construction of a new acute care tower at the University Hospital of Northern BC; the new Surrey hospital and BC Cancer Centre and new facilities at Surrey Memorial; new long-term care facilities that are starting construction in Chilliwack, Kelowna and Squamish; and cancer centres in Nanaimo and Kamloops.

Mental health and addictions
Government has made significant investments to strengthen mental-health and addiction services throughout B.C. Budget 2025 includes $500 million in new funding over three years for addictions treatment and recovery programs that are underway. These include Road to Recovery, Foundry, secure care, supports for children and youth and Indigenous-led treatment, recovery and aftercare services.

K-12 education
Budget 2025 provides $370 million over three years to help give children and youth the supportive and inclusive learning environment they need. This includes hiring more teachers and supporting the growing number of children with special needs with funding for special education teachers, teacher psychologists and counsellors through the Classroom Enhancement Fund. Budget 2025 also provides $17 million for First Nations reciprocal tuition for students attending First Nations schools.

Capital investments of $4.6 billion over three years will go toward building, renovating and seismically upgrading schools. Major projects include $392 million in prefabricated school projects that will create 6,485 new seats across 16 school districts; $203 million for the new 1,900-seat Smith Secondary school in Langley; and $151 million for the new 630-seat Olympic Village elementary school in Vancouver.

First Nations language preservation and revitalization
Budget 2025 invests $45 million in new funding over three years for the First Peoples’ Cultural Council, nearly doubling the Province’s past annual investments for First Nation led programming. Of this, $36 million will go toward critical language preservation and revitalization to meet the growing demand for language instruction, as well as support learners and jobs for expert speakers, particularly Elders and First Nations women.

Post-secondary education and skills training
As part of previous budgets, B.C. has committed more than $700 million over three years through the StrongerBC: Future Ready Action Plan to improve access to post-secondary education to prepare people for the jobs of tomorrow, while helping close the skills gaps that employers are facing.

Budget 2025 supports continued investment in B.C.’s Health Human Resources Strategy. In the first two years, investments have helped fund hundreds of training seats, including 40 new undergraduate medical seats, 162 new residency spots and 65 new nurse practitioner training seats. The remaining funding will continue to train more health-care workers to serve the needs of B.C. families.

Budget 2025 includes $4.7 billion in capital funding over the fiscal plan for post-secondary institutions. Major projects include $315 million for the construction of the Centre for Clean Energy and Automotive Innovation at Vancouver Community College; $108 million for the West Shore Learning Centre Campus for Royal Roads University in Langford; $57 million for the Centre for Food, Wine and Tourism at Okanagan College in Kelowna; and $34 million for the interim space for the new medical school at Simon Fraser University in Surrey.

Children and youth in care and alternative care
Budget 2025 provides $821 million over three years to support children in government care or alternative care arrangements, such as with a family member or someone with an established relationship or cultural connection. These programs include foster care and specialized homes, independent living programs, and similar care programs supported by Indigenous Child and Family Service Agencies.

Children and youth with support needs
Budget 2025 provides an additional $172 million over three years for children and youth with an autism diagnosis and families accessing medical benefits for children with severe disability or complex health-care needs. New funding will provide supports to 2,700 more children, for an estimated total of nearly 30,400 children and youth in 2025-26.

Income and disability supports, and supplementary assistance
To support increased demand for income, disability and supplementary assistance, the budget provides $1.6 billion more over three years. Approximately 253,000 people receive assistance, including the financial, transportation and crisis supplements, as well as counselling and health supports.

Community Living BC
Budget 2025 provides an additional $380 million over three years to Community Living BC to meet growing demands. Community Living BC supports more than 29,000 adults with developmental disabilities.

Budget 2025 is a made-in-B.C. plan to support growth and defend good jobs for people as Canada faces the threat of unjustified U.S. tariffs.

B.C. has built a strong economic foundation despite global challenges, attracting record investments and supporting industry to grow and innovate.

Government continues to make progress on previous investments to streamline permitting across the natural-resource sector so high-priority projects can be built faster. This includes fast-tracking 18 major critical mineral and energy projects worth approximately $20 billion.

Budget 2025 moves B.C. forward in its goal to grow a more self-sufficient and diverse economy that will stand strong in the face of whatever comes its way, with $172 million in new investments over the fiscal plan to keep people and goods moving and new tax measures to support economic growth.

Encouraging innovation and investment to create good jobs
Building on the success of a three-year pilot, Budget 2025 invests $30 million over three years in the Integrated Marketplace Initiative to connect tech companies with commercial partners to test their products and services in real-world environments.

The initiative helps tech companies scale up, expand into new markets and create more high-quality jobs and opportunities here at home. The projects are located at sites crucial to B.C.’s diversified economy, including ports and airports.

B.C. is a vibrant interactive technology hub with global company offices that are at the forefront of video games and virtual reality. To boost the success of this sector, Budget 2025 increases the interactive digital media tax credit from 17.5% to 25% and makes the credit permanent. This will help companies attract the talent they need to grow their teams and compete for more contracts, strengthening a robust and sustainable industry.

Budget 2025 also encourages investment in B.C.’s small businesses, with an increase to the investment limit for individuals through its small business venture capital tax credit and a temporary $15-million increase to the program’s budget for 2025-27.

Supporting Canadian content and made-in-B.C. productions
Budget 2025 increases incentives for B.C.’s thriving film sector, ensuring that good-paying film and TV industry jobs stay in the province. Film Incentive BC credits for Canadian-content productions increase from 35% to 40%, retroactive to Jan. 1, 2025, to support Canadian content. To support international projects made in B.C., the production services tax credit is increasing from 28% to 36%. Projects claiming the production services tax credit with B.C. production costs greater than $200 million could get extra support, with a new 2% major production tax credit.

Budget 2025 also amends the rules for animated productions with a bricks-and-mortar presence in a regional or distant location to be able to claim regional or distant location credits if they qualify through the Film Incentive BC tax credit or the production services tax credit, subject to additional eligibility rules.

Keeping goods and people moving through transportation and transit upgrades
Reliable transportation infrastructure is critical to keeping people connected, strengthening supply chains and ensuring B.C. products get to market efficiently.

Budget 2025 invests $142 million over three years to maintain highways and bridges and to support critical transit services to ensure the safe and efficient movement of goods and people. This includes:

• $95 million in additional funding for critical highway and bridge maintenance throughout the province; and
• $47 million toward BC Transit to ensure reliable bus and handyDART services in 130 communities outside the Lower Mainland.

Budget 2025 also includes $15.9 billion in capital funding over the next three years to improve transportation networks throughout B.C.

Examples of approved projects include:

• $6 billion for the Surrey Langley SkyTrain;
• $5 billion for two phases of the Fraser Valley Highway 1 corridor improvement program;
• $4.2 billion for an eight-laned immersed tube tunnel to replace the George Massey Tunnel on Highway 99;
• $3 billion for the Broadway subway project;
• $1.2 billion for upgrades to several sections of Highway 1 between Kamloops and Golden; and
• $538 million for two projects to restore access to critical road infrastructure in the Cariboo region damaged by landslides.

B.C. is a beautiful place to live, but too many people are facing high costs and struggling to find a place to live they can afford. Since 2017, the Province has prioritized helping people with the cost of living, including through ICBC rebates and reduced rates, eliminating medical services plan payments, expanded school food programs, fighting speculation and building homes people can afford, and financial support like the BC Family Benefit. Budget 2025 builds on government’s affordability measures with $1.1 billion over four years, beginning in 2024-25, to tackle housing affordability and provide a one-time ICBC rebate.

BC Builds
Introduced in 2024 with initial program funding of $198 million over three years, BC Builds is a housing program to speed up the development of new homes for middle-income people throughout B.C. Six projects have begun construction. An additional 11 will be underway in 2025-26. This will result in nearly 1,400 rental units for middle-income people in communities such as Abbotsford, Cowichan Nation/Duncan, Fernie, Gibsons, Lake Babine First Nation, North Vancouver, Prince Rupert, Tsawout First Nation and Whistler.

Budget 2025 builds on work underway with an additional $318 million investment in BC Builds over three years. The new funding will deliver more homes and contribute to the Province’s goal of thousands more middle-income rental units.

Speculation and vacancy tax
To deliver more homes and help ensure residential properties are used as homes rather than investments, Budget 2025 increases the speculation and vacancy tax rates. The rate for foreign owners and untaxed worldwide owners rises to 3% of their home’s value from 2%, and to 1% from 0.5% for Canadian citizens and permanent residents.

The increase takes effect Jan. 1, 2026, and will generate an estimated additional $47 million in revenue in 2027-28. This money will be invested back into housing in the 59 regions where the tax applies.

It’s one more measure alongside the home-flipping tax and a tax for foreign owners to curb price escalations caused by speculators.

Support for lower-income seniors and families
Budget 2025 increases supports and helps more lower-income families and seniors with rental housing costs.

New Budget 2025 investments increase monthly supports and nearly double the number of lower-income working families eligible for help through the Rental Assistance Program. By raising the income threshold for the program from $40,000 to $60,000, nearly 6,000 families will be eligible for the program, up from 3,200. The average supplement families receive will increase from $400 to $700 a month.

Up to 1,600 more seniors will benefit from the Shelter Aid for Elderly Renters program as Budget 2025 increases the income threshold from $37,240 to $40,000. The average supplement seniors receive will grow from $261 to $337, an increase of 30%.

ICBC rebate
To help people and businesses facing high costs, Budget 2025 provides a one-time rebate of $110. In total, the rebate is expected to return $410 million to personal and commercial policy holders.

Climate action tax credit
The climate action tax credit will continue to help lower-income British Columbians while the national carbon tax remains in place. All of the incremental revenue from the federally required April 1, 2025, carbon tax increase will continue to go back to people through the tax credit.

The Province remains committed to removing the consumer carbon tax should the federal government remove the requirement for carbon pricing across Canada.

Everyone in B.C. deserves a safe community to call home and timely access to justice. Budget 2025 invests $325 million in new funding over three years to provide housing options for people living outdoors and to resolve encampments, to address public safety concerns about robbery, shoplifting and other property crimes, to provide more resources to law enforcement to fight crime, and to build capacity in the legal system to ensure timely access to justice and to continue to support other public safety programs.

Closing encampments and supporting those most vulnerable
Budget 2025 provides an additional $90 million over three years to expand the Homeless Encampment Action Response Team (HEART) and Homeless Encampment Action Response Temporary Housing (HEARTH) programs into new communities.

These programs work with local governments and First Nations, non-profit organizations and health-care providers to connect people living outdoors and in encampments with better access to support services, shelter and housing options so they can move inside and encampments can close.

Since 2023, BC Housing has partnered with 10 municipalities to open 15 HEARTH sites throughout the province, for a total of 611 temporary supportive homes or shelter beds. This includes sites in Abbotsford, Campbell River, Chilliwack, Duncan, Kamloops, Kelowna, Nanaimo, Prince George, Vancouver and Victoria.

Keeping communities safe
Budget 2025 provides $235 million in new investments to keep people and communities safe through justice and public safety programs.

New funding of $24 million will help improve timely access to justice, including increased capacity at the B.C. Supreme Court and enhanced security at the Vancouver Provincial Court at 222 Main St. in Vancouver. It will also continue the expansion of virtual bail, improving access to justice and community safety.

Budget 2025 also provides $15 million over three years in new funding to support assistance for victims, immediate family members and witnesses, as well as $24 million for the BC Coroners Service, electronic supervision under BC Corrections and increased fire inspections.

Providing resources for law enforcement and training more officers
Additional funding of $67 million over three years will go toward community safety programs, including a new Community Safety and Targeted Enforcement Program pilot that will target robbery, shoplifting and other property crimes, providing police with tools to tackle street disorder and support safer downtowns and commercial areas in communities throughout B.C.

The Province is continuing to invest in the Repeat Violent Offending Intervention Initiative program and the Special Investigation and Targeted Enforcement Program. These programs help provide co-ordinated response teams made up of police, prosecutors and probation officers to respond to repeat violent offenders.

Budget 2025 provides new funding for the Justice Institute of B.C. that will expand police-academy training capacity from 192 to 288 officers per year.

Additional funding of $104 million over three years will go toward policing programs, including the First Nations and Inuit Policing Program, and for negotiated wage increases for provincial RCMP detachments. It will also support the National Body Worn Camera Program initiated in 2024 to improve transparency and accountability.

Budget 2025 supports growth in B.C.’s economy to create the wealth needed for the services and programs people rely on, while managing finances carefully to strengthen B.C.’s fiscal foundation.

The budget seeks to strengthen the Province’s fiscal position and takes the first steps in charting a long-term path to balance so government can respond to changing needs, while protecting services and growing B.C.’s economy.

To ensure front-line services are safeguarded and B.C.’s finances are managed responsibly, the Province is reviewing all existing programs to ensure they remain relevant, efficient, that they are helping people with costs, and working to grow the economy. Government is also identifying administrative and operational efficiencies through reduced discretionary spending for travel, consulting contracts, business expenses and a hiring pause, with the exception of roles that are crucial to delivering services and programs. These measures aim to save $300 million over the 2025-26 fiscal year, and $600 million in each of the 2026-27 and 2027-28 fiscal years.

Economic outlook
B.C. is expected to see modest economic growth in the absence of tariffs, with real GDP growth projected at 1.8% in 2025 and 1.9% in 2026 as immigration slows and trade uncertainty persists, while inflation trends downward and housing construction remains resilient. Over the medium term (2027-29), economic growth is expected to improve, averaging 2.1% annually, supported by steady employment and wage growth, gains in consumer spending and higher exports supported by liquid natural gas production. U.S. tariffs pose a significant risk to the economic outlook.

Budget outlook
Budget 2025 presents an updated deficit of $9.1 billion for 2024-25, $273 million lower than forecast in the fall 2024 economic and fiscal update. The improvement is due mainly to higher corporate income tax revenues and ICBC net income, partially offset by higher spending, including for emergency response and long-term care funded by statutory authority.

Budget 2025 projects the following declining deficits over the three-year fiscal plan period:

• $10.9 billion for 2025-26
• $10.2 billion for 2026-27
• $9.9 billion for 2027-28

Revenue outlook
Total government revenue is forecast at $84 billion in 2025-26, $85.7 billion in 2026-27 and $88.2 billion in 2027-28. Revenue growth is mainly driven by increasing tax revenues due to recent growth in population and economic activity, as well as increasing natural resource revenues.

The government’s revenue outlook factors in trade-related uncertainty associated with the threat of U.S. tariffs consistent with the economic outlook.

Expense outlook
Expenses over the three-year fiscal plan are forecast at $94.9 billion in 2025-26, $95.9 billion in 2026-27 and $98 billion 2027-28. Investments will help support the programs and services people rely on, including health care, mental health and addictions, housing, public safety, as well as helping people with costs and building a stronger economy.

Budget 2025 includes contingencies allocations of $4 billion each year of the fiscal plan to help manage pressures for critical services and other costs that are uncertain at the time of building the budget, including costs for a new collective-bargaining mandate and emerging costs, such as responding to potential tariff impacts.

Capital investments
Budget 2025 invests a total of $59.9 billion in capital investments over three years, including $15.9 billion to strengthen transit and transportation infrastructure, $15.5 billion to support capital investments in health care and $4.6 billion to build, renovate and seismically upgrade schools.

The capital plan supports 180,000 direct and indirect jobs over three years in communities throughout B.C.

Debt affordability
B.C.’s taxpayer-supported debt is projected to be $97.7 billion at the end of 2024-25, approximately $9.1 billion more than projected in Budget 2024. This increase is due to a higher opening balance following 2023-24, the increased deficit, and pre-borrowing to meet funding requirements early in 2025-26.

Taxpayer-supported debt is expected to increase by $68.8 billion over the fiscal plan as the Province continues to invest in strengthening services and building more schools, hospitals, roads, bridges, transit and housing.

The taxpayer-supported debt-to-GDP ratio, a key metric used by credit rating agencies, is forecast at 26.7% in 2025-26, 30.9% in 2026-27 and 34.4% in 2027-28. B.C.’s debt-to-GDP ratio remains one of the lowest in Canada. It is currently below that of most provinces, including Ontario and Quebec. B.C.’s debt-servicing costs remain at low levels compared to other jurisdictions.

Successive budgets will focus on flattening debt-to-GDP over time, ensuring B.C. retains one of the lowest debt-to-GDP ratios compared to the Province’s peers.