B.C. Finance Minister Brenda Bailey promised tariff relief would be coming from Ottawa but businesses say they need help from the province as well.
As U.S. tariffs start to impact British Columbians, prompting fears of layoffs and higher prices, business groups and economists are urging the province to take immediate steps to support companies and workers through tax measures and retraining programs.
This comes as the NDP government has indicated Ottawa will be responsible for the heavy lifting when it comes to individual supports, with money taken in from retaliatory tariffs on American products distributed to the provinces.
Laura Jones, Business Council of B.C. CEO, said the 2025 B.C. budget, unveiled Tuesday, was a missed chance to address some of the long-standing challenges that the province has had drawing companies to B.C.
“I think the biggest disappointment in yesterday’s budget is there’s no path to fiscal sustainability,” said Jones of the projected $10.9 billion deficit projected over the next 12 months. “I can’t imagine the rating agencies are gonna be too excited about what they saw yesterday.”
She said the one positive is that Premier David Eby is saying a lot of the right things when it comes to eliminating interprovincial trade barriers and reducing permitting times for natural resource projects, including a list of 18 that represent a $20 billion influx of capital.
There were some measures in Tuesday’s budget designed to help specific sectors of the economy, such as an increase in the film tax credit to 40 per cent and $15.9 billion in funding for highways and public transportation.
Jones, however, wants to see the government focus on measures that will help make B.C. more competitive in the global marketplace, including exempting all capital spending from the PST.
“We’ve got, right now, the highest tax burden on new capital investment, and so now that’s just a fancy way of saying the machines and the equipment that make our workers more productive and allow them to be paid more,” she said. “This is the kind of tax cut that makes sense, because if we did that, according to one study, for every $1 lost in provincial sales tax revenue, we would generate $1.30 in economic activity.”
Eby didn’t address whether his government is thinking of taking such a measure while speaking to reporters at the legislature on Wednesday but did point to the work he is doing with his fellow premiers to open up trade between the provinces.
He said he expects that all barriers within Canada for alcohol sales will be eliminated in short order and that work is underway on freedom for labour mobility.
“Our goal is to eliminate any barriers between the provinces for people who are professionals, whether teachers or doctors or nurses, so they are able to move seamlessly,” said Eby. “There are some specific areas, though, where we’re going to need to make sure that we’re addressing those issues. So for example, in Alberta, dental hygienists are allowed to administer anesthesia, while in British Columbia, that’s not the case, and so they’re going to require additional training to be able to work.”
Eby also said he will be pressing Ottawa to ensure its employment insurance program is topped up for people facing layoffs and that the province’s role will be in establishing retraining programs to help workers transition to other industries.
University of B.C. economist Werner Antweiler said it’s premature to suggest any remedies as it will take time for the full impact of the tariffs to play out. He said the ultimate goal for the province should be to further diversify its economy away from the U.S., which currently receives 52.8 per cent of B.C. exports.
“If the trade war persists, the main focus will be on finding new export markets, but this will be difficult because of higher transportation costs to many foreign markets,” said Antweiler. “Perhaps helping jump-start more resource processing in B.C. and moving up the value chain may help compensate, but this is a long-term strategy.”
He said introducing a system of short-term work where workers have their hours and salaries reduced instead of being laid off, with the government covering a portion of their income, could serve as a temporary measure in the forestry and agricultural sectors.
Conservative Leader John Rustad said the problem with all the measures the government is considering is that B.C. remains dependent on the U.S. for electricity, gasoline, food and health-care services.
The official Opposition leader criticized the NDP for dragging its feet on the development of liquefied natural gas and for taking years to get mining permits approved.
He renewed his call for a Canada-wide free trade agreement based on Nova Scotia’s mutual recognition bill, which Eby has said he is looking at but has yet to replicate.
“This is a simple act. You bring down your barriers, we’ll bring down our barriers. It’s a simple thing to be put in place. We should be actually taking the lead, not following a province like Nova Scotia,” said Rustad. “We could be a powerhouse, and we’ve allowed ourselves to be vulnerable because of failed governments, both provincially and federally, and to me, that has to be what changes.”