The government of British Columbia says if president-elect Donald Trump follows through with his promise of a 25 per cent tariff on Canadian goods once his presidency begins, it could result in the province losing about $69 billion by 2028.
The potential economic crisis has prompted Premier David Eby to order a government-wide spending review.
Mandate letters to cabinet ministers, sent on Thursday, order nearly all ministers to work with the minister of finance to “to ensure programs remain relevant, are efficient, grow the economy and help keep costs low for British Columbians.”
The review could potentially affect things like the $1,000 grocery rebate promised during the election at a cost of $1.8 billion.
B.C. Finance Minister Brenda Bailey said Thursday that the province has been trying to look at the impacts of the proposed tariffs since they were announced in November.
Bailey said the tariffs would be “unprecedented in modern times,” which has made it challenging for analysts to determine what might happen. She said the province’s numbers are based on the assumption that a 25 per cent tariff would remain in effect for the duration of Trump’s presidency, and that Canada will retaliate.
But now, the province says the tariffs could mean a major loss for B.C.’s gross domestic product.
An estimated 54 per cent of B.C.’s exports go to the U.S., according to provincial figures, making it British Columbia’s biggest trading partner. About 14 per cent of B.C.’s exports go to China, 11 per cent to Japan and 10 per cent goes to other jurisdictions in Asia.
It’s projected the tariffs would also result in 124,000 fewer jobs in B.C. over the next three years, leading to a 6.7 per cent increase in unemployment in 2025, and 7.1 per cent next year.
Economists have had trouble forecasting what 2025 may hold for B.C., in part due to the threat of tariffs.
“Trade is about a third of our economy,” David Williams, vice-president of policy of the Business Council of British Columbia told CBC News in December. “If we lose that, we’re really going to be struggling from an already challenging position.”
On Thursday, Premier David Eby said the numbers the province has put out may look scary, but he reassured British Columbians that the provincial government understands how dire the threat is, and that it’s working to mitigate its impact.
“I firmly believe that we have everything in this province that we need to succeed … take this threat and turn it into an opportunity to grow prosperity for everyone in this province and everybody in this country,” he said, pointing to the people, resources and geography of B.C.
“British Columbia will lead the way in responding to these tariffs and ensuring that our people are protected.”
The province says Eby has met with several state governors to explain the devastating impacts tariffs would have. Eby and other premiers will travel to Washington, D.C., on Feb. 12, about three weeks after Trump takes office, to fight the threat of the tariffs.
Earlier this week, Eby hinted that B.C. may ban exports on critical minerals produced in B.C. if Trump moves forward with the tariffs.
On Thursday, he said these tariff threats are an opportunity to strengthen trade relationships with other countries.
Prime Minister Justin Trudeau says that tariffs would “first and foremost hurt American citizens,” but it would also be harmful to all Canadians, which is why jurisdictions need to support one another, particularly those most impacted by the proposed tariffs.
“No one region of the country should disproportionately bare the burden of standing up for Canadians,” he said.
