2025-2029 Surrey Financial Plan

ECONOMIC OVERVIEW

BRITISH COLUMBIA The British Columbia (“BC”) economy is expected to grow by 1.9% this year. The Provincial government forecast noted that this estimate does not fully include the impact of potential US tariffs. BC’s economy is less exposed to the US in comparison to other provinces. In 2024, 53.0% of BC exports were made to the US compared to the national average of 75.0%. The provincial unemployment rate came in below the national average at 6.1% with 5,700 jobs added in March. The province also reported the highest average hourly wage rate among all provinces of $37.64. The BC government announced that the minimum wage will increase from $17.40 to $17.85 per hour on June 1st of this year, the adjustment is tied to inflation. BC’s CPI came in higher than the national average in March at 2.6%, down from February’s reading of 3.0%. The overall slowdown in price growth is due to lower gasoline prices. British Columbians continue to face affordability issues with housing costs continuing to increase. Year-over-year shelter costs included in the CPI increased by 4.3% and transportation was up 4.8%. Effective April 1st, British Columbians will see BC Hydro electricity rates increasing by 3.75% in each of the next two years. Food prices will increase in the coming months if US tariffs work their way through the economy. In response to looming US tariffs, the BC government has announced the cancellation of a planned grocery rebate that was slated to be disbursed this year. Expected to cost the government $1.8 billion, the grocery rebate was pledged by the province to help British Columbians with the high cost of living. Families were due to receive $1,000 and individuals were slated to receive $500. To further cut costs, the government is implementing a hiring freeze for some public service positions. The provincial government passed legislation to cancel the BC consumer carbon tax effective April 1st, in line with actions taken by the Federal government. Elimination of the tax will put further pressure on provincial government finances as it is estimated that $2.8 billion of the $3.0 billion carbon tax revenue in the 2025 budget is paid by consumers. April will be the last month where British Columbians receive the Climate Action Tax Credit which was aimed at low-income families and individuals. BC motorists saw savings at gasoline pumps soon after the tax was eliminated. The pause on the grocery rebate and cancellation of the carbon tax credit will impact families struggling with the high cost of living. The BC government is projecting a record-high budget deficit of $10.9 billion for their 2025/2026 fiscal year. The provincial deficit may ultimately come in larger than projected as the budget presented did not include the effects from the elimination of consumer carbon tax revenue and carbon tax credits. The elimination of the consumer carbon tax is anticipated to add $1.8 billion to the government’s deficit. The BC government has run budget deficits for the last two years and are projecting deficits for the next three years with no plan outlined for a return to a balanced budget.

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

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