Budget 2025: Tariffs overshadow bleak fiscal outlook

For Immediate Release

VICTORIA, B.C — Due to extraordinary economic events, the Greater Vancouver Board of Trade has expanded its annual report card and issued the Trump Tariffs a letter grade of “F” for the negative economic impacts and higher costs imposed on British Columbians.

Budget 2025 received a letter grade of "C-".

“Today is a dark day for Canada as Trump’s terrible tariffs overshadow everything else,” said Bridgitte Anderson, President and CEO of the Greater Vancouver Board of Trade. “The tariffs are completely unjustified and will impose higher prices and needless economic pain on Canadian and American consumers and businesses. B.C.’s best response to the trade war is a new Agenda for Economic Growth that puts economic growth firmly at the heart of government decision-making – reducing red tape, lowering barriers to investment, increasing internal trade, and selling our resources to the rest of the world.”

“The new Finance minister was given a difficult task as there was little fiscal room left to respond to unjustified tariffs,” stated Anderson. “Budget 2025 includes another record high deficit, as we spent our fiscal advantage, with overall debt projected to balloon by $75 billion by 2028. While the government has talked openly about the need to grow the economy and attract private sector investment, we await the transition from words to action,” concluded Anderson.

The budget projects deficits totaling $31 billion over three years, prior to the impact of tariffs. The government has also provided a revised tariff impact scenario that estimates $43 billion in lost real GDP and 45,000 fewer jobs. This slightly more optimistic scenario is reliant on a favourable fiscal and monetary policy response by the federal government, including transferring any revenues from retaliatory tariffs to affected B.C. businesses.

Households will receive a $110 ICBC rebate starting in April 2025 that is expected to cost $440 million. In addition, new investments in public safety, homelessness and mental health and addictions were announced to help people living in encampments and initiatives that respond to public safety concerns related to repeat, violent offenders in B.C. communities.

2025 Report Card Results

Economic Vision: "C-"

This year’s budget offers few comments or new actions to support the economy.

Some new initiatives include:

• Investing $30 million over three years to continue and expand the Integrated Marketplace Initiative.
• $95 million for critical highway and bridge maintenance supporting the safe and efficient movement of commercial traffic and the travelling public.

The most substantial economic initiative from the government continues to be a significant capital plan investing in transportation infrastructure, electrification, hospitals and schools.

Fiscal Management: "C-"

Contrary to signals from the government, there was no plan forthcoming towards a balanced budget. The budget projects deficits totaling $31 billion over three years, prior to the impact of tariffs.

The interest bite (cents towards paying interest on debt per dollar of revenue), was estimated to be 3.8 per cent in Budget 2024. Budget 2025 projects that will nearly double to 6.9 per cent by 2028.

The fiscal plan does include modest expenditure management targets of $300 million in 2025/26, $600 million in 2026/27, and $600 million in 2027/28. To mitigate against unexpected and unknown costs, the Contingencies Vote includes allocations of $4.0 billion in each year of the fiscal plan. Priorities for contingency funding noted by the government include caseload pressures, compensation increases related to a new collective bargaining mandate, and emerging priorities.

Tax Competitiveness: "C"

Some tax measures in today’s budget include:

• An increase to the Film Incentive BC basic tax credit to 40 per cent, the basic production services to 36 per cent, and a new major production tax credit.
• An increase to the interactive digital media tax credit to 25 per cent and make permanent.
• Zero-emission vehicles will be subject to provincial sales tax as of May 1, 2025. The exemption for used zero-emission vehicles that was introduced in Budget 2022 was originally scheduled to end in 2027.
• An increase to the carbon tax will increase by $15/tonne effective April 1, 2025.
• The speculation and vacancy tax rates will increase to 1 per cent for Canadian citizens and permanent residents, and from 2 per cent to 3 per cent for foreign owners.
• The Small Business Venture Capital Tax Credit annual credit limit is increased from $120,000 to $300,000. 

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About the Greater Vancouver Board of Trade:

Since its inception in 1887, the Greater Vancouver Board of Trade has been recognized as Pacific Canada’s leading business association, engaging members to positively impact public policy at all levels of government and to succeed and prosper in the global economy. With a Membership whose employees comprise one third of B.C.’s workforce, we are the largest business association between Victoria and Toronto. We leverage this collective strength, facilitating networking opportunities, and providing professional development through unique programs. In addition, we operate one of the largest events businesses in the country, providing a platform for national and international business and thought leaders to further enlighten B.C.’s business leaders.

Media contact:

Federico Cerani
Communications Manager
Greater Vancouver Board of Trade
604-640-5450 | media@boardoftrade.com