Trump tariff threat may affect rebate promise to most families, B.C. minister says
British Columbia’s Finance Minister says she may not be able to follow through with $1,000 rebate cheques to most families in light of U.S. President Donald Trump’s threatened tariffs against Canada, wavering on a key NDP promise in last fall’s provincial election.
The B.C. New Democratic Party government, criticized widely by business leaders for running up a record deficit in the current fiscal year, is signalling a new direction as it prepares for blanket tariffs on Canadian goods. Mr. Trump said late Monday, hours after his inauguration, that 25-per-cent tariffs could begin Feb. 1.
B.C. Finance Minister Brenda Bailey said earlier Monday that the continued tariffs threat will limit what she can deliver in her March 4 budget.
“The first thing I did when I was given this portfolio was begin work on those promises. But I can tell you that [since] Nov. 25, when president-elect Trump announced 25-per-cent tariffs, we have put a pause on a number of different potential responses in terms of affordability in order for us to look very seriously at the impact of these tariffs,” she told reporters.
The province relies heavily on the U.S. for trade and risks sliding into recession if Mr. Trump follows through on his tariffs threat. Last week, the B.C. government released a preliminary assessment that estimated that the tariffs could erase 124,000 jobs and lead to a cumulative loss of $69-billion in economic activity between 2025 and 2028.
The governing NDP secured a bare majority in the provincial election, after making about $3-billion in campaign commitments. The biggest promise was for a “grocery rebate” that was to deliver immediate relief for inflation, and which would shift into a tax cut in later years.
Ms. Bailey said the fate of those promises will be known when she delivers her budget: “The important thing is this is: We are looking at everything in our fiscal plan to make sure that we’re able to respond.”
The province is on track for a $9.4-billion deficit this year after a year of growing government. Now, however, Premier David Eby is promising to trim the size of government to focus on core services and to court investments in natural resource development projects.
Ms. Bailey’s new mandate letter from the Premier, released late last week, is a recipe for fiscal restraint. The Finance Minister is conducting a review of all government programs and initiatives to look for cost savings as a top priority of her new mandate. She’s also been directed to find ways to expand the economy by attracting investments in both new and traditional sectors of the economy.
“This is important in the context of provincial budget constraints, proposed American tariffs, and other global threats to B.C. families,” her mandate letter states. In addition, Ms. Bailey is to put the province on a clear path to balanced budgets, although there is no target date listed to dig out of today’s deficit.
The province’s business community welcomed the new tone on Monday.
“Regardless of the tariff threats, we should get our fiscal house in order,” said Jairo Yunis, director of policy for the Business Council of B.C., said in an interview. The council’s president and chief executive, Laura Jones, was in Washington at the Canadian embassy for Mr. Trump’s inauguration Monday.
While there is uncertainty and anxiety about just what comes next, he said, the B.C. government’s actions in response to the threat demonstrates a clear sense of urgency that is welcome. He says he’ll be watching closely for Ms. Bailey to follow through in her budget.
“We want a budget to be boring. We want no tax increases, no unknown new policies that create even more uncertainty. We want the province to return to a more sustainable fiscal position.”
This article was first reported by The Globe and Mail
