2025-2029 Surrey Financial Plan

ECONOMIC OVERVIEW

5.1% at the same time last year. Economic uncertainties are causing consumers to pull back on spending as concerns about job security are on the rise. Weakened consumer demand will cause businesses to slow down hiring and capital investments. Policy makers at the central bank cautioned that uncertainties surrounding US trade policy and tariffs are major headwinds facing the Canadian economy. The BOC forecasted that the removal of the consumer carbon tax by newly appointed Prime Minister Mark Carney would result in inflation declining to 1.5% in April as gas prices and heating costs move lower as a result of the tax repeal. Longer term forecasts for inflation and Gross Domestic Product (“GDP”) were not provided due to the unpredictable path ahead for the Canadian economy. In lieu of the customary quarterly economic forecast, the BOC provided two possible economic outcomes for the country. The first scenario assumes US tariffs will eventually be withdrawn through negotiations with Canadian GDP stalling in the second quarter and then expanding in the latter half of the year. The second scenario assumes the US tariffs will be long lasting, which will trigger a recession and broadly increase prices. The BOC chair stated that once incoming data becomes clearer, the bank will act decisively to keep inflation in check and support the economy. The US President’s constant threats of tariffs and challenges to Canada’s sovereignty has united Canadians who are joining the “Buy Canada” movement where consumers are choosing to boycott US products. The increased scrutiny faced by travelers to the US has prompted many Canadians to cancel vacations and business trips to the US. The tariffs have spurred the federal and provincial governments into action and there is a sense of urgency for all levels of government to remove interprovincial trade barriers to help offset some of the impacts of US tariffs. Canadians headed to the polls for a federal election after Prime Minister Carney called a snap election just two weeks after winning the Liberal Party of Canada leadership race to replace the resigning Justin Trudeau as Prime Minister. Key election issues included the high cost of living, housing affordability and healthcare. Voter turnout was estimated to be over 67% of the eligible voter population, the highest since 2015, and a record-setting 7.3 million advance ballots were cast. The Liberals clinched 169 seats, short of the 172 needed for a majority, while the Conservative Party of Canada secured 144 seats. The results fell just short of the strong mandate from voters that Carney was seeking and his minority government will need to collaborate with opposition members, most likely the Bloc Québécois or NDP, to pass legislation and stave off another election in the near future. Conservative leader Pierre Poilievre failed in his bid for reelection in his Ottawa-area riding while NDP leader Jagmeet Singh lost his BC-based seat and announced his resignation as party leader. Prime Minister Carney faces the challenging task of governing the country after more than 40% of voters cast a ballot for the party that will be the official opposition.

City of Surrey | 2025—2029 Financial Plan | Financial Overview

85