As the provincial government prepares to table its budget on the same day as the United States prepares to impose tariffs, B.C. economists disagree about whether the provincial government has financial room for relief. 

Alex Hemingway, senior economist and public finance policy analyst with BC Policy Solutions, said British Columbians will almost certainly see a budget with conservative revenue estimates and weakened economic growth protections, given the volatility and uncertainty around a potential trade war triggered by Donald Trump.

"I'd expect government will be budgeting for the worst and aiming to overperform," Hemingway said. 

Jairo Yunis, director of policy with the Business Council of British Columbia, said B.C.'s provincial deficit of $9.4 billion, the largest of any Canadian province, poses a "significant fiscal challenge" that will likely define the budget.

Yunis also added that B.C.B次元官网网址檚 economic outlook "remains tepid" with 1.8 per cent in 2025. That is better than in 2024, but below the long-term average of 2.5 per cent.

"The province also faces significant external risks, particularly potential U.S. tariffs on Canadian exports, which could put additional strain on industries that are already struggling with rising costs and regulatory pressures," Yunis said. "Budget forecasting in this context of uncertainty is extremely challenging."

This challenge has loomed over the budget processing, something government officials themselves have acknowledged. It also raised the question of whether government will be able to support industries, specifically their workers, impacted by tariffs. 

"There is room for emergency support for workers, which aren't of concern from a fiscal point of view, given they are temporary measures," Hemingway said. "If we do end up in a trade war recession, they'll be essential, though certainly (Ottawa) should do the heaviest lifting. It's also worth noting that there are still $3 billion to $4 billion per year in contingencies built into the provincial fiscal plan as of the fall reporting from the (finance ministry)."

Hemingway also praised government's decision to forego the promised grocery rebate of $1,000 for 90 per cent of households, to be followed by a permanent tax cut, because of its financial implications. Writing in November 2024, Hemingway said the measure would join previous tax cuts that have eroded the  provinceB次元官网网址檚 capacity for public investments to tackle big challenges like housing, health care, child care, toxic drugs and the climate crisis, among others.

"Tax cuts would ultimately deepen the affordability challenges they purport to help," Hemingway said. 

Yunis said the best measure for lasting relief is to strengthen our economy. "Short-term relief measures may offer temporary help, but they do not address the root causes of rising costs, stagnating living standards, and slow private sector job growth," Yunis said. "The most effective way to improve affordability, wages, and opportunities is to fix the economic foundations of our province, ensuring that businesses can grow, invest, and create well-paying jobs."

Yunis added that means strengthening B.C.'s fiscal position, making the tax system more competitive and making sure that industries driving long-term growth can grow will deliver far greater and longer-lasting benefits than short-term relief programs.

Hemingway acknowledged B.C.'s fiscal situation as a constraint, but warned against overstating it. "B.C. remains a wealthy province with a highly skilled workforce," Hemingway said. "If we harness those strengths, we have the economic capacity to tackle the major social and environmental challenges of our time."

Economists are predicting that the tariffs could trigger a recession not seen since 2008 and Hemingway warns against restraint.

"We've seen a hiring freeze and a spending review announced," Hemingway said. "If these are signals of an austerity budget, thatB次元官网网址檚 worrying. A looming tariff-induced recession means that investment in public services and infrastructure is needed more than ever, both to meet urgent social needs and as economic stimulus."

Hemingway said the next couple of years will see "substantial" deficits. "But that's reasonable and manageable," he said. "It's also far preferable to neglecting public investment in services and infrastructure, which would only cost us more in the long run." 

Having said that, Hemingway warned against running deficits forever. "Public investment should be sustained over time by growing the economy and raising additional revenue with tax measures focused on those at the very top," he said. He also points to steps government can take to unleash economic growth and productivity. 

"One important example that I've been focused on is taking bigger strides on zoning reform," he said. "Cities like Vancouver can't be allowed to keep blocking apartments on most of their residential land. Restrictive zoning pushes people out of high-productivity cities, excluding them from job opportunities and higher wages, which hurts economic growth and increases inequality." 

Yunis, meanwhile, praised government's stated commitment toward fast-tracking resource projects, fiscal discipline and its spending review, adding that these measures suggest an "awareness of the need to get" B.C.'s economic house in order. 

"The real test will be whether this budget follows through," Yunis said. "Given the context of domestic challenges and tariff threats, the budget presents an opportunity to stabilize the fiscal outlook while laying the groundwork for stronger economy." 

Reporters and stakeholders will be the first outside government officials to get a glimpse of the budget with the public learning more Tuesday afternoon. 

"An important and often overlooked figure I always look at in the budget is the long run trend and trajectory in provincial government spending as a share of GDP," Hemingway said. "B.C. is harnessing a smaller share of our economic output for provincial operating spending than we once did. This is an indication that the economic capacity is there for a bigger role of the public sector, which is much needed in many areas." But this measure can also be volatile and temporarily increase when GDP falls during a recession. 

Yunis, meanwhile, said he will be looking at several figures. "The deficit projection will be the most immediate signal," he said. "(Will) the government outline a credible plan for fiscal stability, or will it continue to run large deficits without a clear path forward? On a more granular level, we will also be looking at spending restraint." 

Yunis added that the budgetB次元官网网址檚 approach to trade and industrial policy would also be telling. "Measures that support export diversification, regulatory excellence, and major resource development would signal a focus on long-term prosperity, while an absence of these initiatives would raise concerns about future growth prospects," he said. 

Premier David Eby, meanwhile, Wednesday signalled a budget that would meet the moment.

"We are not in 2017 (when the B.C. NDP assumed power) anymore," he said. "The realities in 2025 are quite different and...we have to ensure that we are on a path back to balance. (We) have to ensure for British Columbians that we are spending responsibly, delivering those front-line services that they are counting, while reducing costs related to administration and so on. So that will be part of the discussion around the budget."