5 takeaways for B.C. businesses from Canada’s 2025 federal budget

Canada’s 2025 federal budget arrives with record spending and a promise to “grow the economy,” but for many B.C. businesses, the gains look uneven. While new investments in AI, critical minerals and clean energy could boost innovation and infrastructure, economists and industry leaders say the plan falls short on the fundamentals—like cutting red tape, fixing tax bottlenecks and giving small operators real relief.

From productivity to procurement, here are five takeaways from the federal budget for B.C.’s business community.

1. Productivity and competitiveness remain the elephant in the room

The 2025 federal budget arrives as Canada faces a steep productivity challenge. According to Statistics Canada, GDP per capita has fallen steadily since 2022—and that trend isn’t lost on B.C. economists.

Simon Fraser University finance professor Andrey Pavlov calls the budget “a missed opportunity” to address what he sees as the real drag on growth: excessive regulation, red tape, and high taxes. “Canadian productivity is a complete disaster,” Pavlov says. “The personal tax cut amounts to just $420 per person per year—laughable when top tax rates exceed 50 percent in most of Canada and 54 percent in B.C.”

He adds that without corporate tax cuts or meaningful regulatory reform, “it’s very difficult to do business in Canada.” While he welcomed the removal of the underused-housing tax, Pavlov says it’s “a drop in the bucket” compared with the broader structural barriers facing entrepreneurs.

2. AI funding could anchor B.C. as Canada’s applied-innovation hub

If there’s one sector where Ottawa’s investments could translate quickly to commercial outcomes, it’s artificial intelligence. The budget positions AI, quantum and cyber technologies as national infrastructure—an approach that AI in BC president Rob Goehring calls “a major opportunity for B.C. to anchor Canada’s applied AI commercialization layer.”

He says local startups stand to benefit from new federal programs that expand compute access and procurement pathways. “In health, that means pilots for claims triage and privacy-preserving analytics,” Goehring notes. “In resources, AI can streamline permitting and sustainability reporting. In finance, there’s strong growth potential in fraud and model-risk tools.”

But gaps remain. Goehring points to slow procurement cycles and unclear eligibility rules for compute incentives: “Government must move to short, outcome-based pilots and ensure SMEs have direct access, not just large primes,” he says.

3. Critical minerals policy moves from concept to action

Vancouver-based Falkirk Consulting executive chair Mike McPhie says the new federal focus on critical minerals could be transformative—if Ottawa and Victoria can deliver programs quickly and in sync. “This year’s budget takes critical minerals from concept to action,” McPhie says. “For companies in B.C., the next step is getting lined up with new federal systems that will coordinate funding, permitting and Indigenous partnerships.”

He highlights tools like the Critical Minerals Sovereign Fund, the Strategic Financing Framework and Indigenous Loan Guarantee Program as potential catalysts—but warns that fragmented processes remain a major bottleneck. “Financing, permitting and Indigenous consultation all run on different timelines,” McPhie says. “If Ottawa and Victoria can line up policy, permitting and funding decisions, it creates real investor confidence.”

The opportunity, he adds, “is enormous—now it’s time to put the pieces to work.”

4. Small businesses feel left behind on tariff relief

While major sectors get new funds, small businesses are still waiting for tangible relief. The Business Improvement Areas of B.C. (BIABC) says the budget “missed a critical opportunity” to make Ottawa’s tariff-relief fund usable for local retailers, restaurateurs and service providers.

“The issue with the tariff relief fund is not only eligibility—it’s accessibility,” says BIABC president Jeremy Heighton. “The application process is complex, bureaucratic and unrealistic for small operators who are already stretched thin.”

Heighton argues that allowing firms with fewer than 10 employees to access the fund would let them reinvest in efficiency upgrades or Canadian-made alternatives to U.S. goods.

“Support programs should reinforce resilience, not add barriers,” he says. “A tariff relief program that excludes the smallest businesses is not meaningful support.”

5. Execution will define whether this budget works for B.C.

Across sectors, a common thread emerges: policy ambition isn’t the problem—implementation is. Whether it’s simplifying tax systems, speeding up procurement, or coordinating approvals between Ottawa and Victoria, experts agree that results will hinge on execution.

As Pavlov puts it, “Canada has all the ingredients to be the highest-income country in the world. But we shoot ourselves in the foot with endless red tape.”

For now, B.C. business leaders are watching to see whether 2025’s promises turn into measurable progress—or another year of good intentions lost in process.