British Columbia’s finance minister is forecasting another record deficit in a budget she says defends the province from an unfolding North American trade war that risks tens of thousands of jobs and tens of billions in economic losses for B.C.
Brenda Bailey says “the impact will be severe,” but it’s not the time to retreat by cutting spending on public services.
Bailey’s first budget comes on the same day the United States enacted sweeping tariffs against Canadian imports, and it includes $4 billion in annual “contingencies” for “unpredictable costs” including tariff responses.
The budget predicts a deficit of about $10.9 billion for the next fiscal year starting April 1, up from a new forecast of $9.1 billion this year.
Updated forecasts provided with the budget say the trade war could cost B.C. $43 billion in cumulative GDP losses and 45,000 jobs by 2029.
The forecasts say annual revenue losses could reach $3.4 billion.
Tax highlights include new speculation and vacancy tax rates
Among the budget’s minor tax measures, the B.C. family benefit will continue payments for six months after a child’s death, which harmonizes the benefit with the federal Canada child benefit.
The annual limit for the small business venture capital tax credit was increased: Effective for 2025 and subsequent tax years, the limit that a taxpayer can claim for investments made on or after March 4, 2025, has risen to $300,000 from $120,000.
The training tax credit for apprentices was extended for three years, to the end of 2028.
Effective May 1, used zero-emission vehicles will be subject to a provincial sales tax. The exemption introduced in the 2022 budget was originally scheduled to end in 2027.
The province also introduced new speculation and vacancy tax rates to ensure residential properties are used as homes, not investments. Effective Jan. 1, 2026, the rate for Canadian citizens and permanent residents who are not untaxed worldwide earners, as well as others currently taxable at 0.5% under the Speculation and Vacancy Tax Act, will increase to 1% from 0.5%.
The rate for foreign owners and untaxed worldwide earners, as well as others specified under the Speculation and Vacancy Tax Act currently taxed at 2%, will increase to 3%.
The new tax rates will apply to the speculation and vacancy tax payable by property owners based on the use of their residential properties during the 2026 calendar year and onward, the budget said.
More than 99% of people who live in B.C. are exempt from paying the speculation and vacancy tax, it said. In conjunction with the tax rate increases, the non-refundable speculation and vacancy tax credit for B.C. residents will be increased to $4,000 from $2,000.