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First Post-Election B.C. Budget Maintains Status Quo, Cautious Fiscal Approach to Tariff Pressures

March 5, 2025

First Post-Election B.C. Budget Maintains Status Quo, Cautious Fiscal Approach to Tariff Pressures

 

March 4, 2025 – B.C. Minister of Finance Brenda Bailey tabled the first provincial budget since Premier David Eby’s BC NDP was re-elected last fall. The government plans to spend $94.9 billion in the 2025/26 fiscal year with expected revenues of $84 billion, resulting in a forecast record deficit of $10.9 billion.

The government has described the budget as “a measured plan to protect jobs and the public services people rely on, while preparing British Columbia’s economy to withstand the unpredictable impacts of unjustified tariffs.” Emphasizing the current uncertainty, this  budget paints a darkening economic picture for the province with American tariffs threatening 45,000 jobs and a $43 billion cumulative decrease to real GDP by 2029. It anticipates GDP growth of just 1.8% this year and 1.9% next year. 

Health care was identified by Minister Bailey as one of the key services the government would continue to invest in. Of the $7.7 billion allocated to new program spending over the next three years, $4.2 billion will go to health to improve a wide range of services including primary and acute care, long-term care and community services, mental health and addictions care, and services offered through third-party service agencies. The total budget for the Ministry of Health this year is $35.1 billion which is approximately 37% of the total provincial budget. 

$15.5 billion in capital funding is allocated over the three year plan which includes new hospitals, schools and transportation projects. Much of this funding will support projects already announced including the new Surrey and St. Paul’s hospitals, the Broadway subway and Surrey-Langley Skytrain extension and the Massey Tunnel replacement project. 

The only affordability measure introduced was a $110 ICBC (Insurance Corporation of British Columbia) rebate for drivers, as well as a commitment to freeze basic insurance rates through March 2026. Other key spending highlights include $4.6 billion for building and renovating schools, $67 million for community safety programs and $12 billion in contingency funding to face the tariff threats.

Summary of Health Care Commitments

  • $4.2 billion in total new funding over three years to increase capacity in the health care system and support growing demand for services.

  • $443 million to support the primary care strategy.

  • $870 million over three years toward the opening and operation of new or renovated facilities. Major capital project investments will include St. Paul’s Hospital in Vancouver, Royal Columbian Hospital in New Westminster, Mills Memorial in Terrace, and Royal Inland in Kamloops.

  • $15.5 billion over three years in capital investments for new and upgraded acute care, long-term care and cancer care facilities. Investments include cancer care centers in Kamloops and Kelowna, an acute care tower at the University Hospital of Northern British Columbia, long-term care facilities across the province, and the new Surrey hospital.

  • $500 million in new funding over three years for addictions treatment and recovery programs.

  • $101 million increase this year for home and community care for seniors.

Other Key Budget Commitments

  • One-time ICBC rebate of $110 which will cost $410 million.

  • An average monthly increase of $400 to $700 for families under the Rental Assistance Program which will cost $375 million.

  • $16 million to target robbery, shoplifting and theft

  • $30 million over three years for the “Integrated Marketplace Initiative” to help tech companies expand into new markets.

  • Speculation and vacancy tax increases to 3% for foreign owners and 1% for Canadian residents which will raise $47 million in additional funds this fiscal year.

  • An increase to the tax credit for video game and virtual reality companies from 17.5% to 25%.

  • $380 million over three years to Community Living BC, providing supports and services to adults with developmental disabilities.

  • $47 million in annual infrastructure spending to strengthen supply chains to help get B.C. products to new and emerging markets.

  • $370 million over three years for special education teachers, school psychologists, etc.

  • $4.6 billion over three years to build and renovate schools.

  • Fast-tracking 18 major mineral and energy projects worth approximately $20 billion.

  • $15.9 billion in capital funding to improve transportation networks.

  • $67 million over three years towards community safety programs.

  • $318 million over three years to BC Builds for more rental homes.

  • $12 billion over three years in contingency funds to offset the potential impact of U.S. tariffs and climate change (increase of $112 million annually). 

Additional Detail & Analysis

This could be best described as a “focus on the basics” budget,  anticipating ongoing challenges in the U.S.-Canada trade relationship over the long-term, as well as fundamental economic challenges expected to impact the province. 

While Minister Bailey defended the government’s spending plan and the planned deficit, she also said she would work hard to get on a path to balanced budgets in the future, without offering any timelines or what this would mean.  

Notable in this budget is a lack of key campaign promises including the “$1,000 grocery rebate”, a middle class tax cut, a promised low interest financing for first time home owners, a commitment to extend the Broadway subway to UBC and to add education assistants in all K – 3 classrooms.  The new hospital towers for Nanaimo and Langley which were promised during the campaign were not mentioned nor was funding for involuntary care for people with mental health and addictions issues.

The provincial debt is forecast to rise from $133 billion currently to $209 billion by 2027.  The province’s debt-to-GDP ratio is forecast to rise from 23% currently to 34% by 2027, which led to speculation that B.C.’s credit rating could face further downgrades. 

Official Opposition Finance Critic Peter Milobar said that his party would not give government a “free pass” on blaming the deficit on the trade war with the United States, saying it was the result of a lack of fiscal management over several years.  In his official response today, MLA Milobar criticized insufficient support for businesses, that there was only a minor increase in contingency funding, and a lack of support for the agricultural sector, which is expected to be significantly impacted by the U.S. tariffs.

​​Today’s budget will continue to add fuel to the fire for what is already a lively spring legislative session with a narrow B.C. NDP Majority, propped up by the BC Greens facing off against a large newly elected BC Conservative Official Opposition. The session is scheduled to run through to May 29, 2025.