Summary

• B.C.’s economy continues to show resilience amid ongoing volatility with global trade and geopolitical uncertainty
• Revenues were up in the first quarter, while spending increased to support people and businesses and protect communities from wildfires
• B.C. continues to invest $12.9 billion in health-care facilities, schools, transportation and housing

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B.C.’s economy continues to show resilience despite wildfires, global uncertainty and another round of U.S. tariffs, according to the Province’s First Quarterly Report.

“We know that U.S. tariffs and global instability are creating uncertainty for workers and communities across B.C.,” said Josie Osborne, Minister of Finance. “But B.C. is adapting, our exports are growing and we are reaching markets around the world. We continue to work with the federal government to protect the services people rely on and build a stronger, more self-reliant economy.”

Revenue is forecast at $86.3 billion, $789 million higher than Budget 2026. Stronger income tax and sales tax revenues are helping offset lower revenues from natural resources and the housing market.

Provincial spending also increased as an intense wildfire season has taken a toll on people and communities. The fire-management expenditures are forecast to be $614 million higher than the budget. Spending on refundable tax credits also rose by $458 million as more people and businesses took advantage of the renters’ tax credit, which supports housing affordability, and the productions services tax credit program that helps sustain jobs and keep the province’s film and video production industry competitive.

The updated revenue and expense forecasts result in a projected deficit of $13.8 billion for 2026-2027, $450 million higher than projected in February, with declining deficits for 2027-2028 and 2028-2029.

Building a self-reliant province

B.C. businesses are already adapting to changes in global trade. Goods exports have increased so far this year, with exports to non-U.S. destinations rising 16% as businesses expanded trade with markets including China, South Korea and India. The overall value of B.C. goods exports increased 4.2% year to date until July 2026, largely due to strong demand and prices for copper.

Other areas are also showing strength. Manufacturing shipments increased 9.1% year to date until June 2026, while international tourism increased by 6.6% year to date until June, supported by FIFA-related tourism.

At the same time, the latest U.S. tariffs are expected to create additional challenges for industries, including forestry, aluminum and manufacturing. The Province will continue working with the federal government to support affected workers and businesses while continuing to expand and diversify markets for B.C. products.

Economic uncertainty

B.C.’s economic performance has been mixed in 2026 amid external economic volatility from U.S. tariffs, the conflict in the Middle East and tighter federal immigration policy. Real GDP is forecast to grow by 0.9% in 2026, which is narrowly lower than projected in Budget 2026. However, GDP growth is expected to strengthen to 1.9% in 2027, as trade networks adjust, population growth trends upward and economic uncertainty begins to ease. Looking ahead, GDP growth is expected to average 2.1% annually over the 2028-2030 period.

Inflation was 2.9% in July, largely due to elevated oil prices and global supply-chain disruptions linked to the conflict in the Middle East. Inflation is forecast to average 2.5% in 2026 before returning to 2% in 2027.

Investing in the future

Government is continuing to take careful steps to manage spending and protect the services people in B.C. rely on. At the same time, the Province is continuing to invest in infrastructure and supporting workers, businesses and communities as B.C. navigates ongoing global economic uncertainty.

Taxpayer-supported capital spending is forecast at $12.9 billion in 2026-2027, supporting investments in health-care facilities, K-12 and post-secondary schools, roads and public transit, and housing. Since Budget 2026, eight major capital projects have been approved, including two BC Housing projects and six BC Hydro projects to support growing communities and a stronger economy. Moreover, 23 new schools and additions opened in September 2026, providing 4,700 students with a space to learn.

Through the Look West Strategy, the Province is also working to strengthen B.C.’s economic independence by expanding trade beyond the U.S., advancing major projects and attracting investment that creates good jobs throughout the province.

Learn More:

• To access the First Quarterly Report, visit: https://www2.gov.bc.ca/gov/content/governments/finances/reports/quarterly-reports
• To access the PowerPoint presentation, visit: https://news.gov.bc.ca/files/Q1_%20MediaDeck.pdf

A backgrounder follows.