2025 British Columbia Budget Analysis
On the same day the U.S. imposed 25 per cent tariffs on Canadian goods, British Columbia’s Finance Minister rose to table Budget 2025. It’s the first budget Brenda Bailey has delivered as Finance Minister and the first since the NDP’s narrow election win in October.
During the campaign, Premier David Eby made no shortage of big promises, including scrapping the consumer carbon tax, implementing a middle-class tax rebate, providing an educational assistant in every K-3 classroom, and hiring 45,000 new health care workers. Those commitments come with a hefty cost and on Tuesday, with a trade war beginning, the NDP government couldn’t quite pay up.
Since narrowly securing the BC NDP's third consecutive term in government, Premier David Eby has put a much stronger focus on the economy and was one of the first Premiers to drop the gloves in the fight against U.S. tariffs. Yesterday, BC Liquor Stores pulled all red-state liquor products off their shelves and the government presented a budget with billions in trade-war contingencies.
BC’s budget works to meet the current moment but kicks the can of campaign commitments down the road. At a critical time in Canada, below is what you need to know about British Columbia’s 2025 budget.
Fighting US Tariffs: BC Braces for Impact
The President of the United States has proven to be anything but predictable, so BC’s Budget 2025 tries to expect the unexpected. The budget titled Standing strong for BC includes $4 billion in annual contingencies to address unpredictable costs, including potential tariff response measures. It also outlines the following three-point strategy to ensure the province is ready for any scenario:
Respond - Tough counter-actions and diplomatic outreach to American policymakers.
Strengthen - Fast-tracking major projects and supporting businesses.
Diversify - Reducing reliance on U.S. markets by expanding trade partnerships.
However, in the unlikely event tariffs stay in place through Donald Trump’s current term, expect a $43 billion cumulative GDP loss by 2029, 45,000 fewer jobs, and an annual revenue loss of up to $1.4 billion.
Debt and Deficit: The Elephant in the Room
During the campaign, Premier Eby said he would say goodbye to the consumer carbon tax if the federal backstop was removed. However, Budget 2025 forecasts increased revenues from both B.C.’s industrial and consumer carbon tax systems. A federal election will occur in 2025, and with both Liberal leadership frontrunners along with the Conservative party vowing to ditch the policy, it could leave a big hole in B.C.’s budget, especially as it racks up a record deficit.
Deficit: $10.9 billion in 2025-26.
Debt-to-GDP jumps to 26.7%.
Taxpayer-supported debt climbs to $118.7 billion.
Healthcare and Social Services: Keeping BC Covered
Alberta’s dependence on oil revenues has always been a double-edged sword, and Budget2025 highlights just how vulnerable the province’s finances remain. Resource revenues are expected to drop by $4.48 billion - a roughly 21% decline from last year, and driving a projected $5.2 billion deficit. Bitumen royalties alone will shrink to $12.8 billion from $16.86 billion, further straining the province’s bottom line. The situation is compounded by the potential impact of U.S. tariffs on Alberta’s energy exports, which could double the deficit to $8.7 billion while slowing economic growth to 1.7% in 2025, down from more than 3% in previous years. To cushion the blow, the province has doubled its contingency fund to $4 billion, but the reality remains stark: Alberta is once again at the mercy of global oil prices and shifting trade policies.
The government has few levers to pull beyond advocating for market access and pushing back against federal policies that the UCP government argues will stifle investment. The province is projecting oil prices at $68 per barrel in 2025, down from $74 last year, with a widening price differential for Western Canadian Select crude that could further erode revenues. Meanwhile, investment uncertainty is growing, as the looming trade dispute with the U.S. dampens capital spending and puts pressure on Alberta’s already volatile job market. While the province remains committed to positioning itself as a stable energy supplier, the fiscal reality suggests that Alberta is once again at risk of slipping into a pattern of boom-and-bust budgeting.
Education Gets a Boost: Upgrades, Hiring and Student Supports
Similar to health care and social services, Budget 2025 invests in education with the BC government saying in an uncertain economic environment, it's important to protect the services residents rely on.
$370 million over three years to hire more teachers, special education instructors, psychologists, and counsellors.
$4.6 billion for building and upgrading schools – with a priority placed on replacing older portables.
More funding for children and youth with disabilities, kids in care, and adults with developmental disabilities.
$45 million for Indigenous language and cultural programs to help preserve and revitalize First Nations languages.
Jobs and Innovation: Betting Big on BC Talent
Every Minister’s mandate letter includes the same boilerplate bullet directing them to “grow the economy by creating good jobs across British Columbia.” As such, it’s no surprise that Budget 2025 includes funding and measures that will help Cabinet do just that:
$30 million for tech startups through the Integrated Marketplace Initiative.
$95 million for highway and bridge maintenance jobs.
Bigger tax credits for film, gaming, and digital media to keep Hollywood North humming.
Cranes, Concrete and Construction Crew: The Infrastructure Splurge
If there’s one thing this budget loves, it’s major infrastructure projects to keep people and goods moving in B.C., including:
$45.9 billion in taxpayer-funded projects over three years.
$6 billion for the Surrey-Langley SkyTrain (finally).
$5 billion for Highway 1 upgrades in the Fraser Valley.
180,000 jobs will be supported by all this construction.
Housing: Cracking Down on Speculators, Speeding Up Rentals
BC is doubling down on policy to make homes more accessible and cracking down on speculators who treat housing like a stock portfolio:
$318 million into BC Builds for middle-income rental housing.
$375 million to boost rental supplements for low-income families and seniors.
Implementation of a tougher speculation and vacancy tax to stop investors from hoarding homes.
Wallet Watch: Cost of Relief, Kind of?
To keep with tradition, Minister Bailey bought a new pair of shoes for budget day. However, her choice of a second-hand pair of John Fleuvog shoes should have been a clue about the kind of relief British Columbians could expect in this budget. With the rising cost of living, the biggest win goes to drivers, with a few others sprinkled in:
A $110 ICBC rebate for anyone with a policy.
Basic auto insurance rates frozen for another year.
Targeted rebates for lower-income families and seniors.
Crime and Public Safety: Keeping the Streets in Check
When Premier Eby spoke to the media after election day, he vowed to do more to address public safety concerns. Budget 2025 does address the issue of repeat violent offenders but says little about a hot topic during the campaign – involuntary care.
$90 million for programs to address encampments and homelessness.
$235 million for community safety initiatives—targeting repeat violent offenders and property crime.
Police training capacity jumps by 50%—from 192 to 288 new officers per year.
Looking Ahead: A Budget Built for a Battle
With a trade war brewing, a record deficit looming, and campaign promises waiting in the wings, Budget 2025 is less about grand gestures and more about bracing for impact. The BC NDP is betting that a mix of cautious spending and strategic investments will be enough to weather economic uncertainty while leaving enough wiggle room to (hopefully) deliver on its big-ticket pledges down the road.
But with a federal election on the horizon, unpredictable U.S. tariffs, and a housing market that refuses to cooperate, this budget is just the beginning of what’s shaping up to be a bumpy ride for B.C.'s economy. Buckle up.
The New West team is standing by to help clients find their way as an unclear and critical 2025 unfolds.
