B.C. government forecasts U.S. tariffs would have a $69-billion cost

The British Columbia government outlined the massive potential impacts of tariffs on goods heading across the border.

Premier David Eby and Finance Minister Brenda Bailey held a press conference Thursday, Jan. 16, where it was stated that an economic assessment of the proposed 25 per cent tariff on all Canadian goods going into the United States would impact have significant impacts to the provincial economy, as the U.S. in B.C.’s largest trading partner, accounting for 54 per cent of exports.

“In the tariffs scenario, B.C. would experience an economic slowdown, with real GDP (Gross Domestic Product) potentially declining 0.6 per cent, year over year, in 2025 and 2026,” Bailey said.

“In the long-term, this represents a cumulative loss of around $69-billion between 2025 and 2028.”

The impacts of the tariffs was also forecasted to cause B.C. to lose an estimated 124,000 jobs during that period. Bailey said job declines would be concentrated in export industries in the natural resource sectors, and their associated manufacturing industries, including forestry, wood and paper manufacturing, metal manufacturing, mining, and oil and gas extraction.

“Fewer jobs means that our unemployment rate would increase,” Bailey stated.

“Our preliminary assessment shows that the unemployment rate would increase to 6.7 per cent in 2025, compared to our base case of 5.8 per cent. For 2026, the unemployment rate could increase to 7.1 per cent.”

The government also forecasted that the additional pressures would result in investments in businesses declining, causing corporate profits to decline by $6.1-billion in 2025, and though they would improve somewhat over the coming years, the tariffs would lead to corporate profits being down by an estimated $3.6-billion in 2028.

The tariffs would also impact the province’s revenue streams by between $1.6-billion and $2.5-billion annually.

These estimates were based on president elect Donald Trump following through on his tariff threats, and keeping them in place during the entirety of his four year term.

Bailey noted she would be meeting with top economists from across the country to further evaluate the potential tariff impacts and how to address them.

Eby stated the provincial government takes the tariff threat very seriously.

“This is a direct threat to B.C. families. It is an attack on families in our province, it is an attack on Canadians,” the Premier said.

“There are consequences for Americans as well that will also be devastating for them around affordability and loss of employment, it goes in both directions, but our committment is to British Columbians, and our number one priority is ensuring we are prepared as a province for these tariff , that we are responding in a way that protects families and ensures that we minimize the risk of any attack like this from the United States.”

Eby has sent mandate letters to his cabinet ministers, outlining strategies to respond to the threats, which he said includes making sure programs are reviewed, that money is not being wasted on administration when it could go to front line services, ensure programs are responsive to the global environment, and that the focuses are on strengthening and growing the provincial economy.

The Premier said he was committed to responding to the tariffs, pointing to the work he and the other premiers were doing to find ways to retaliate at the federal level, but also saying the province was looking into “non-tariff measures” that may be available in B.C. to showcase how connected the two nations are and how “our shared prosperity is on the line.”

Eby also re-committed to travelling to Washington D.C. with Canada’s other premiers to meet with U.S. decision-makers and try to find a solution that avoids the tariffs and the impacts they have on the two nations as well as the individual provinces, territories and states.

The B.C. Premier said the province was also exploring further trade partners at home and abroad to reduce the dependence on the United States.

“People of British Columbia will always be there to support our country,” Eby said

“Our country is under direct threat from president-elect of the United States, it is a declaration of economic war in my opinion, and, in wartime, people need to come together and support each other. Whatever it takes to ensure we get the attention of Americans that we remind them about how their prosperity is our prosperity, they have no better ally in the world. Whatever it takes, British Columbia will be there to make sure that we’re doing our part.”