PacifiCan's 2025-2026 Departmental Plan: Operating context

 

Early in 2025-26, British Columbians began to benefit from improving economic conditions as growth accelerated and inflation, interest rates, and labour shortages gradually began to ease. However, export market access, global political uncertainty, affordability pressures, and immigration changes now pose significant risks to the economy.

B.C.’s economy is projected to grow by 1.5% in 2025, the same as the national average forecast of 1.5%^{Footnote 1}, and higher than the estimated 2024 provincial growth rate of 1.2%^{Footnote 2}. Growth expectations are underpinned by global economic growth, which is forecast to remain stable at just over 3% in 2025^{Footnote 3}. Labour shortages that eased in 2024 are expected to continue easing in 2025. However, unemployment in B.C. is projected to rise from 5.6% in 2024 to 6.1% in 2025, just above the ten-year provincial average (5.9% from 2014 to 2023) and below the national forecast of 6.8%^{Footnote 4}.

B.C. has a large endowment of critical minerals and natural resources, gateways to the Indo-Pacific and the U.S. Pacific Northwest, a growing and skilled population, and strengths in advanced clean energy, digital technologies, and biotechnology. Home to the second-largest Indigenous population among provinces and territories, increasing Indigenous economic participation and leadership is widening economic opportunities, especially in rural areas. Diverse regional economies contribute to B.C.’s resiliency.

Among Canadian provinces, B.C. has more diversified markets for its goods exports, which are primarily natural resourced-based manufactured products, energy and minerals, including critical minerals such as zinc and copper^{Footnote 5}. In addition, tourism has also rebounded with visitor numbers in the first half of 2024 nearly matching peak levels from 2019^{Footnote 6}.

Nevertheless, businesses and communities face significant economic uncertainty that may affect their ability to realize their ambitions.

• Trade disruptions could reduce B.C. exports of energy and manufactured products, particularly wood products. Trade uncertainty is expected to delay business investment and hiring decisions.
• The cost of living and doing business in B.C. is a longstanding challenge. Increases in B.C. housing prices slowed in 2024, but the average B.C. home price was still over 40% higher than the national average^{Footnote 7}. The value of the Canadian dollar has been declining, raising import costs including food, consumer products, and parts for manufacturing.
• Lower immigration levels may worsen skilled labour shortages in key sectors such as health care and construction in 2025. Annual population growth for B.C. is expected to slow from a 50-year high of 3.3% in 2024 to 0.2% in 2025 due to fewer international immigrants and out-migration, mainly to Alberta^{Footnote 8}.

In the face of these risks, PacifiCan will continue to invest in businesses and communities across B.C. to help them create jobs, grow exports, be more competitive, and become more resilient.