On March 4, 2025, the re-elected Government of David Eby presented the 2025 Budget for the Province of British Columbia (BC).
Summary/Political Context
Brenda Bailey presented her first Budget as the new Minister of Finance (appointed November, 2024) and like several other provincial budgets that will be presented this spring, it is heavy in spending that is meant to protect British Columbians from the recent tariffs imposed by the U.S. “With uncertainty on the horizon, it is prudent to protect the essentials and prepare for what comes next by investing in our greatest resource, the people of British Columbia,” stated Minister Bailey.
Themes
Tariffs
The BC government provided a “point-in-time” scenario on what impacts it estimates U.S. tariffs will have on its economy and finances.
Unfortunately, the figures are not positive:
- $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.
- Up to $1.4 billion annual loss in revenue.
This scenario assumes that federal support will match U.S. increases (10% on Canadian energy products and 25% on all other goods).
Health Care
Health-care continues to be the largest expense in the budget (more than a third – a record $35 billion in 2025) and the province has provided new funding in the amount of $4.2 billion over three years. These funds will be used to increase capacity in the health-care system, improve patient outcomes, and support the demand for services. An additional $15.5 billion is being provided over three years in capital investments for new and upgraded acute care, long-term care and cancer care facilities throughout the province.
Transportation
In this budget, Infrastructure spending continues to rise, with $15.9 billion dedicated to capital funding to improve transportation networks throughout the province. There is also an additional $142 million (over three years) to maintain highways, bridges, and to support transit services.
Education
Both K-12 and post-secondary education and skills training received new funds (over three years) totalling approximately $1.1 billion. Capital investments (over the same time period) will total $9.3 billion.
Fiscal Projections/Economic Outlook
The provincial deficit for 2025 will be $10.9 billion, up from $9.1 billion in the 2024 forecast with further shortfalls exceeding $9 billion in subsequent years. In addition, the Royal Bank of Canada (RBC) analysis predicts the: “…debt to jump from $97.7 billion in 2024-25 to $166.5 billion by 2027-28. This represents a nearly $69 billion (70%) increase in just three years.”
The team at Diplomat Consulting looks forward to the opportunity to work with you and your business to assess opportunities for alignment with government objectives, as well as support you in understanding any political risk. For more information, please contact Diplomat Consulting at: hello@diplomatconsulting.com or visit is at: http://www.diplomatconsulting.com
Ivan Ross Vrána
Managing Partner
