NEWS RELEASE: B.C.'s Economy has gone from Leader to Laggard

SURREY – British Columbia's economy has been disproportionately kept afloat by hefty government spending while its private sector stalls, its export base shrinks, and its once-enviable public finances deteriorate faster than any province in half a century, according to a major new economic report released today by the Independent Contractors and Businesses Association (ICBA).

From Leader to Laggard, the first instalment of ICBA Economics’ series Building B.C. Right, was written by ICBA Chief Economist Jock Finlayson and consulting economist Ken Peacock. Drawing on Statistics Canada, B.C. Budget 2026, credit rating agency data, and other sources, it presents the most complete picture yet assembled of a provincial economy that has quietly fallen to the back of the pack.

Among the report's findings:

• B.C.’s private sector economy is struggling. Government activity was responsible for all economic growth in 2024, with public sector GDP growing 6.6 per cent annually over 2022-24 while the private sector managed just 1 per cent – one-third of the normal pace. Growth did pick up slightly in 2025, but the outlook for 2026-27 is subdued.
• Missing jobs. Had B.C.'s private sector kept growing at its pre-pandemic pace, the province would have roughly 2.1 million private-sector jobs today. Instead, it has about 1.9 million; a shortfall of some 223,000 positions.
• A government-driven job market. Since 2019, B.C. has added 1.3 government-driven jobs for every new private-sector job. In the rest of Canada, the ratio is 0.6. The public-sector wage bill has nearly doubled in seven years, from $26.7 billion to $53.2 billion.
• A debt explosion. Taxpayer-supported provincial debt is on track to triple in just six years. The authors write they are “unaware of any comparable debt explosion in any Canadian province over the last half century.”
• A shrinking export base. Exports have fallen to 13.5 per cent of B.C.’s GDP, barely half the national average, with the timber harvest down 45 per cent since 2015 and lumber shipments to China collapsing by 80 per cent over the period.
• No plan to fiscal balance. B.C.’s record $13.3-billion deficit comes with no path back to balance – one of only two provinces, with New Brunswick, that has none.

“For too long, the underlying weaknesses in our provincial economy have been papered over, masked by a handful of mega energy projects, record population growth, and an unprecedented expansion of government hiring and spending,” said Chris Gardner, ICBA President and CEO. “Those tailwinds are now gone, and the structural cracks in our economic foundations are impossible to ignore.”

“By virtually every key metric bearing on economic well-being – GDP growth, per capita income, private sector investment, export performance, job creation, and the state of public finances – B.C. has lost ground,” said Finlayson. “This is not a cyclical downturn or a temporary trade-related setback. The province is in the grip of a structural slowdown, and many of the challenges are home-grown, rooted in provincial policy choices that have raised costs, fostered uncertainty, and discouraged investment.”

The report dismantles the argument that B.C.’s troubles are imported. “It is tempting to attribute much of B.C.’s economic underperformance to recent U.S. trade tensions. That would be a mistake,” Finlayson and Peacock write. “B.C.’s economy was already on a weaker footing well before 2025.”

Part 2 of the series, to be released this fall, will set out the policy changes needed to restore B.C. to stronger growth.

The full report is available HERE.