Weak economic growth forecast for B.C. in 2026, says new Deloitte report

B.C.’s GDP is forecast to increase by 1.6 per cent this year, according to a national report from audit and tax firm Deloitte.

The prediction is a small increase from the province’s previous forecast of 1.3 per cent, but remains stunted by U.S. tariffs on the forestry sector.

“Economic growth in B.C. is expected to remain weak this year relative to the prairie provinces as positive momentum on the major project front is offset in the forestry sector,” reads the report titled Reset over resolutions: Building economic momentum in 2026.

The report said the province “will struggle to withstand” tariffs imposed on its forestry sector by the U.S., which are currently at 45 per cent.

The B.C. forestry sector has seen a wave of mill closures over the last few years.

The industry has taken major hits as escalating U.S. duties on softwood lumber imports have piled atop challenges like a major beetle infestation, wildfires and a shrinking timber supply.

Together, they've led to thousands of job losses across the province.

The Deloitte report said its financial forecast is based on the province securing federal support for the sector.

It also said that major infrastructure projects in the province such as the North Coast Transmission Line and the Ksi Lisims LNG project — both on a federal fast-track project list — set B.C. up for an improved economic outlook in future years.

The province’s latest economic update from November forecast economic growth for 2026 at 1.3 per cent.

Both it and the Deloitte report projected 2025's growth would come in at 1.4 per cent. In 2024, B.C.'s GDP rose 1.2 per cent.

Minister of Finance Brenda Bailey said in November that “unjust and unpredictable” trade policies were behind the measured forecast.

She said B.C. would look to diversify its economy and increase access to non-U.S. markets to buoy the province.

She said strong consumer spending and steady residential construction were supporting economic growth in 2025, while major industrial projects would provide “good jobs for people and economic security, no matter what the world throws at us.”

The province approved eleven major projects between September and November 2025.

National outlook

Meanwhile, the new Deloitte report forecasts Canadian growth will slow to 1.5 per cent this year from 1.7 per cent in 2025.

It said two key trends to watch this year include trade and investment, with the review of the Canada-U.S.-Mexico free trade agreement scheduled for July, and the federal government's plans to stimulate billions in investment from the private sector outlined in its latest budget.

The firm said in the report that Alberta and Saskatchewan would lead the province in economic growth in 2026.

Those two provinces are expected to have their GDPs rise by 2.1 per cent based on their resource sectors and construction activity.