Yesterday, British Columbia’s Finance Minister, Brenda Bailey, presented the provincial budget amid significant economic challenges due to newly imposed U.S. tariffs. The budget projects a record deficit of $10.9 billion for the fiscal year starting April 1, 2025, up from the revised $9.1 billion deficit of the previous year. Consolidated operating expenses are set at $94.9 billion for 2025/26, rising to $98 billion by 2027/28. Capital spending for 2025/26 is forecasted at $20.2 billion, up from last year’s forecast of about $19 billion.
To mitigate the economic impact of tariffs, which are expected to result in a cumulative GDP loss of $43 billion and the loss of 45,000 jobs by 2029, the government has allocated $4 billion in annual contingencies over the next three years. These funds are intended to address unpredictable costs, including those arising from the trade conflict.
In response to the trade tensions, Premier David Eby has emphasized resilience and solidarity, aiming to turn these challenges into opportunities for strength. The government has also taken measures such as removing products from Republican U.S. states from government-run liquor stores as a form of protest against the tariffs.
Despite these fiscal challenges, the budget maintains a focus on core services, with significant investments in health care and education. Notably, $4.2 billion over three years is earmarked to increase capacity in the health system, alongside $15.5 billion for capital investments in hospitals and other facilities.
On a positive note, eligible drivers, both commercial and private, will receive a $110 ICBC rebate, with payments expected in April. This is the fourth rebate since the 2021 revamp of the province’s auto insurer, made possible by “better-than-expected investment returns and prudent financial management.”
Health Care: Budget 2025 allocates $4.2 billion over three years to increase capacity in the health-care system, improve patient outcomes, and support growing demand for services. This includes $443 million to support the primary care strategy and more than $870 million for 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 demand 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 new facilities at Surrey Memorial, new long-term care facilities in Chilliwack, Kelowna, and Squamish, and cancer centres in Nanaimo and Kamloops.
Mental Health and Addictions: The 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. These include Road to Recovery, Foundry, secure care, supports for children and youth, and Indigenous-led treatment, recovery, and aftercare services.
Housing: The 2025 British Columbia provincial budget introduces several measures aimed at enhancing housing affordability and availability across the province. Key initiatives include:
- BC Builds Program Expansion: An additional $318 million is allocated over the next three years to the BC Builds program, which provides low-cost financing for projects offering housing to middle-income individuals. This funding is expected to support the construction of approximately 1,400 homes in various communities, with 11 projects commencing this fiscal year, adding to the six already under construction.
- Increased Rental Assistance: The budget sets aside $375 million to enhance rental supplements through BC Housing. The Rental Assistance Supplement’s income threshold is raised from $40,000 to $60,000, and average monthly supplements are increased from $400 to $700. This change aims to nearly double the number of eligible families to about 6,000. Additionally, the Shelter Aid for Elderly Renters program’s income threshold increase will benefit an extra 1,600 seniors, with average monthly supplements rising from $261 to $337.
- Property Tax Increase for High-Value Homes: The budget proposes a 0.2% increase in property taxes for homes valued over $3 million, projected to generate $47 million in revenue by the 2027-28 fiscal year. These funds are earmarked for reinvestment into housing initiatives across the 59 regions affected by the tax.
Renewable Energy: In response to economic challenges, including U.S. tariffs, British Columbia’s 2025 budget maintains support for clean energy initiatives. The government has committed an additional $100 million over two years to enhance household heat pump incentives, aiming to improve energy efficiency and reduce emissions. This investment aligns with the province’s broader goals to bolster its clean economy amidst external economic pressures.
Moreover, the budget continues funding for CleanBC incentive programs, which support the adoption of electric vehicles, home retrofits, and the installation of rooftop solar panels with battery storage. These programs are designed to promote sustainable energy practices and reduce greenhouse gas emissions across the province.
Related Links
We’re Here to Help
For more information and insights about what these developments mean for the political landscape in British Columbia, please reach out to our experts:
Richard Feehan – Senior Strategy Advisor
feehan@prairieskystrategy.ca
780.940.8956
Bronte Prosser – Strategy Advisor
bronte@prairieskystrategy.ca
306.270.7405
To learn more about Prairie Sky Strategy, please visit our website.
