Inside BC’s Response and Risks as Trump Tariffs Bite

As the opposition accuses the British Columbia government of overreaching with a new bill to allow itself to respond nimbly to changing threats from the United States, it’s worth taking stock of what exactly is at risk.

On Thursday Attorney General Niki Sharma introduced the Economic Stabilization (Tariff Response) Act that she characterized as “enabling legislation.”

If passed the bill allows cabinet to make regulations for “addressing challenges, or anticipated challenges, to British Columbia arising from the actions of a foreign jurisdiction,” reducing interprovincial trade barriers and supporting the economy of B.C. and Canada.

It provides power to increase access to B.C. for goods and services from other Canadian provinces and territories, favour non-American companies in government procurement and introduce tolls or fees on B.C. highways or ferries.

“There’s no question that government needs to be able to act quickly, that we need to be able to be responsive quickly,” said BC Conservative Leader John Rustad.

“What I am concerned about is government giving themselves a blank cheque to do anything they want without any oversight,” he said, adding that it bypasses the legislature and reduces transparency for the public. “To me that’s wrong.”

Premier David Eby said the government views the bill as emergency legislation. “The threats are all over the place,” he said, referring to U.S. President Donald Trump’s changing statements on tariffs. “It is hard to know what will actually show up. This gives us the tool to respond when he takes those actions to hurt Canada.”

He clarified that tolls or fees are not intended to be paid by Canadians and that the idea is to take steps to put pressure on the U.S. or mitigate harm in ways that do the least damage possible within Canada.

Sharma said the legislation includes guardrails, including a requirement for a report to the legislature twice a year on what measures cabinet has taken and a sunset clause that sees the bill automatically repealed by May 28, 2027, at the latest.

Nor can the legislation be used to override requirements of the Declaration on the Rights of Indigenous Peoples Act or to skip processes considering the environmental effects of natural resource projects.

Since coming to office Trump has made various trade threats, and has followed through on some of them.

There is now a 25-per-cent tariff on steel and aluminum imports and on March 4 the U.S. introduced a 25-per-cent tariff on all trade with Canada and Mexico, but two days later exempted the roughly 40 per cent of trade that’s compliant with the Canada-United States-Mexico Agreement negotiated during Trump’s first term in office.

Canadian politicians and news reports have used words like “catastrophic” and “devastating” to describe the possible harm to the Canadian economy.

B.C. budget documents released in early March dampened the alarm, but still said the impact would be “significant.”

While there was much uncertainty, the most likely tariff scenario as of budget day would see B.C.’s growth reduced by 0.3 per cent in 2025 and 0.8 per cent in 2026.

By 2029 the province’s GDP will be 2.6 per cent lower than it otherwise would be, the document said, which works out to a cumulative economic loss of $43 billion over the next four years. There would be about 45,000 fewer jobs, it said.

To put that in context, B.C.’s GDP in 2023, the most recent year for which figures are available, was $410 billion.

At the end of 2024, there were more than 2.84 million people employed in the province, so the predicted job losses would be 1.6 per cent of the work force.

The provincial government’s 2024 British Columbia Financial and Economic Review, the most recent available, says that in 2023 the province had exports of $30.5 billion to the U.S. and $25.7 billion to all other countries.

Exports to the U.S. are about three times what goes from B.C. to mainland China ($9.3 billion), five times exports to Japan ($6.2 billion), nine times to South Korea ($3.3 billion) and 14 times what goes to the European Union ($2.2 billion).

B.C.’s exports to other provinces were worth $49 billion 2021, the most recent year for which data are available, the budget says.

According to the budget, a bit more than half of B.C.’s international exports go to the U.S. That compares with more than three quarters of exports from Ontario and Quebec that go to the U.S. and 88 per cent from Alberta.

In B.C. some industries are more exposed than others, it said. “The negative impact on B.C. in this scenario is expected to be concentrated in export-oriented industries, particularly in natural resources and associated manufacturing.”

From figures in the financial and economic review, B.C.’s main exports to the U.S. were:

Energy products: $8.3 billion (including $4.9 billion worth of natural gas and $1.1 billion of electricity);

Wood products: $5.7 billion (of which $3.4 billion were softwood lumber);

Machinery and equipment: $5 billion;

Agriculture and food other than fish: $3.5 billion;

Metallic mineral products: $2.1 billion (half was unwrought zinc and 40 per cent unwrought aluminum);

Fabricated metal products: $1.5 billion;

Pulp and paper products: $962 million;

Chemicals and chemical products: $933 million;

Fish products: $731 million (more than half of which was whole salmon, either fresh, chilled or frozen); and

Plastics and articles of plastic: $632 million.

Marc Lee, a senior economist based in Vancouver with the Canadian Centre for Policy Alternatives, said B.C.’s budget hasn’t fully accounted for the impacts of uncertainty, U.S. tariffs and any retaliatory tariffs Canada imposes.

He questioned the B.C. government’s estimate of a cumulative drop in GDP of $43 billion over five years. “No way,” he said. “It’s going to be way bigger.”

The figures in the budget for business investment and growth projections are overly optimistic, said Lee. “I think when we hit September, in the first quarterly update, it’s going to look a lot worse than the numbers right now.”

Much is unpredictable right now, said Housing Minister Ravi Kahlon, who chairs a cabinet committee tasked with responding to U.S. tariffs.

“It’s not out of the norm for this president, that administration, to create chaos and the people of the United States are paying for that,” Kahlon said. “We’re seeing the stock market crash. The worry of recession continues to come up. It’s going to have an impact on British Columbia. It’s going to have an impact on the U.S. It’s going to have an impact on countries around the world.”

B.C. will work to respond as part of the Team Canada approach, he said.

“We will come out of this stronger. I do believe that. We’re doing a lot of work with industry to strengthen our economy along the way.”