FOR IMMEDIATE RELEASE
Victoria, BC – BC budget 2025 aims to protect jobs and public services that people rely on while preparing BC’s economy to withstand the unpredictable impacts of US tariffs imposed today.
And while the budget rightly prioritizes maintaining social spending and capital investment over calls for cuts from some sectors, it misses the mark by underinvesting in key areas like child care, housing and social assistance and disability rates, says BC Policy Solutions senior economist Alex Hemingway.
“With Trump’s trade war now underway, it’s a crucial moment to build and protect British Columbia with support for affected workers, a bigger role for public investment and moves towards a more diversified and self-reliant economy,” he says.
The government is projecting declining deficits from $10.9 billion in 2025-26 to $10.2 billion in 2026-27 and $9.9 billion in 2027-28 while estimating an annual revenue loss of up to $1.4 billion because of the tariffs, increased unemployment and decreasing GDP.
At this time of uncertainty, the government is right to run deficits and should focus on increased investments where British Columbians most need them—housing, health care, poverty reduction, child care and diversifying the economy, says Hemingway, who was present in the budget lock up.
He notes that deficits are far preferable to shortchanging social spending and infrastructure, which would only weaken BC’s long-term economic growth and productivity. However, he also emphasizes the importance of increasing revenues to sustain public investment for the long term.
“In the years ahead, the government needs to ensure provincial revenues increase—both by growing the economy and taxing the rich—including the wealthiest landowners. Revenue as a share of GDP has never recovered from sharp declines in the early 2000s under the previous BC Liberal government,” he says.
The budget provides $9.9 billion more in operating funding over three years, including $7.7 billion in new funding for health care, education and social services, and $4 billion in annual contingencies to address unpredictable costs, including a new collective bargaining mandate, pressures on critical services and tariff response measures.
There are some modest positive steps on housing, including a budget commitment to an additional $318 million over three years to BC Builds as part of the government’s goal to deliver thousands more rental homes for middle-income people. The Speculation and Vacancy Tax will be increased to 3% for foreign owners and untaxed worldwide owners and 1% for Canadian citizens and permanent residents.
“Missing are commitments to increase critical investments in affordable, non-market housing to 7,500 units annually—a target that itself needs to be increased—and an election platform promise to create a new annual infrastructure fund for municipalities tied to increasing housing starts,” Hemingway says.
The average supplement for lower-income families under the Rental Assistance Program will rise from $400 to $700 per month and 1,600 more seniors will receive rental support through the Shelter Aid for Elderly Renters (SAFER) program with average supplements growing by 30%. But these barely address needs amid high rents, says Hemingway. He also calls on the government to increase social assistance and disability rates to the poverty line, at a minimum, and index them to inflation.
The budget protects and increases health care funding, including responding to growing demand for health-care services, hiring health-care workers and reducing wait times at emergency, but absent is a clear shift towards the evidence-based Community Health Centre model in primary care. On the capital side of health care, $15.5 billion in capital funding is provided over the fiscal plan to help build and upgrade hospitals, long-term care facilities and cancer centres.
There is no significant increase to child care funding and despite promises during the election campaign, there are no timelines or commitments for increases in capital budgets or for expansion to school-age care. Despite major progress on child care in recent years, this is a missed opportunity since child care is critical both for labour force development and supporting young households.
“If it weren’t for the deep cuts to the BC public sector in the early 2000s—and decades of underinvestment—there wouldn’t be so much work to be done today to rebuild public services and catch up on critical investments in social and physical infrastructure,” says Hemingway.
That investment needs to be sustained and increased in the years ahead, supported by a growing economy and increased revenues from large corporations and the richest few, he notes.
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For further information and interviews, please contact Jean Kavanagh at 604-802-5729, jean@bcpolicy.ca
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