British Columbia is evaluating the possible economic damage from a proposed 25% tariff on all Canadian imports by U.S. president-elect Donald Trump. Early estimates from BC’s Ministry of Finance suggest the province could face major challenges if the tariffs move forward.
The ministry’s preliminary analysis predicts B.C. could lose $69 billion in economic activity between 2025 and 2028. The province’s economy (real GDP) could shrink by 0.6% in 2025 and 2026, with job losses potentially reaching 124,000 by 2028. Key industries like natural resources, manufacturing, transportation, and retail will be the hardest hit. Unemployment could climb to 6.7% in 2025 and 7.1% in 2026. Corporate profits might drop by $3.6 billion to $6.1 billion annually, while the province’s tax revenues could fall by $1.6 billion to $2.5 billion yearly.
The Ministry of Finance stressed that the analysis is an early projection based on assumptions, including that the tariffs would last through Trump’s presidency and Canada would respond with its trade measures.
To prepare, the province has announced a three-part plan: respond, strengthen, and diversify. This includes contingency planning, working with the federal government on retaliatory options, and boosting the domestic economy by cutting red tape and easing trade barriers within Canada. B.C. is also ramping up efforts to expand trade partnerships in the Asia-Pacific region to reduce reliance on the U.S. market.
According to a press release by BC government, Premier David Eby is lobbying against the tariffs. He has met with U.S. state governors to warn about the economic fallout on both sides of the border. On February 12, 2025, Eby will join other provincial leaders in Washington, D.C., to push for Canadian interests.
This analysis echoes concerns raised in a 2019 Bank of Canada report, which found that a 25% U.S. tariff could have a more significant economic impact than most past recessions, except the COVID-19 downturn. However, the Ministry of Finance says this is not the final economic outlook. More details will be shared in Budget 2025, including advice from the Economic Forecast Council, a group of top Canadian economists.
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