Some economists view rebate as ‘election gimmick’ and would like to see a more targeted approach to supporting British Columbians.
It has been three weeks since Premier David Eby indicated the NDP’s marquee promise of a $1,000 grocery rebate may be on the chopping block due to U.S. President Donald Trump’s tariff threat, but there remains no official word on whether British Columbians should be expecting cheques in the mail this spring.
Economists have mixed feelings about the rebate, with some agreeing the government’s potential cancellation of the $1.8 billion expense is needed to keep money available in case targeted supports are needed to protect businesses and consumers from economic disruption caused by the U.S.
“We’re making sure that everything is being looked at,” said Eby in mid-January when asked by reporters directly about whether the rebate will go ahead.
Provincial Finance Minister Brenda Bailey also signalled at the time that the rebate is in jeopardy when she said that she is planning to table a “sharply-focused budget” on March 4 that will include room to manoeuvre should Trump impose tariffs.
Marc Lee, an economist with the Canadian Centre for Policy Alternatives, believes the rebate was little more than a “campaign gimmick” and that the money allocated for the program could be better used to build new infrastructure projects or provide more targeted supports to those who need it.
He pointed out that the province is already running a deficit of $9.4 billion.
“Generally speaking, there are other ways that the government can inject money into the economy, and it’s entirely appropriate to run a deficit given these circumstances, but in a much more targeted approach, rather than giving folks who are making $100,000 a year a really small amount of money that they’re probably not really going to even notice a whole lot.”
He also said that while B.C. doesn’t produce steel, the Rio Tinto smelter in Kitimat is one of the country’s largest aluminum production facilities and would be devastated by the 25 per cent tariffs Trump plans to impose on all imports of the metal to the U.S.
If the blanket 25 per cent tariffs on Canadian goods go ahead, as Trump has threatened, it would mean a 50 per cent barrier on the country’s aluminum.
Lee said that means that there needs to be money available to support the industry and workers amid an economic downturn and the curtailment of production.
SFU economist Andrey Pavlov agrees with Lee that the rebate promise may have been a mistake, but also accused the NDP of having a pattern of fiscal irresponsibility.
He said the government’s primary objective should be to address the smuggling of drugs and people across the American border, even though Canada is responsible for less than one per cent of fentanyl imports and human smuggling into the U.S.
“The No. 1 goal here is to avoid the tariffs altogether, and the way to do this is to really handle fentanyl smuggling and human smuggling that were the primary concern for the Canadian tariffs to begin with,” said Pavlov.
“As for the aluminum and steel tariffs, I’m still not clear on how that’s going to play out. Presumably they are for anywhere around the world, not just Canada, so that’s a little different. Even then, I think Canada actually has an opportunity to to demonstrate that we have handled the demands that have been put in front of us and then negotiate an even closer invitation with the U.S., in the style of the European Union.”
Bailey said in a statement Tuesday that, “We are taking a close look at everything to ensure we are protecting the core services British Columbians rely on, and to ensure that we have room in our fiscal plan to be able to stand up for British Columbians and businesses as we face the ongoing threat of Trump’s tariffs.”
She added that she will have more to say when the budget is released next month.
As part of the mandate letters released in January, Eby tasked his cabinet with finding savings across ministries, with a particular emphasis on the Ministry of Health, which represents over 40 per cent of the provincial budget.
Conservative finance critic Peter Milobar said the possible retraction of the grocery rebate signals the precarious position B.C. finds itself in economically at the moment.
He also urged the province to discuss a freeze of the carbon tax increase scheduled for April 1 with Ottawa to give people a break amid uncertain economic times, pointing out that there was a pause in 2020 due to COVID.
“The premier essentially made a whole lot of campaign promises, very expensive promises that as a sitting premier he should have reasonably known he had no ability to actually deliver on,” said Milobar.
“What happened during the election, the premier was outwardly mocking our tax measures that we’re going to take in B.C. over a couple of years and saying, essentially, vote for him because he’s going to take immediate action to put money back in people’s pockets. He’s now walked away from all that.”