Major projects and government funding may cushion the impact of weak forestry output, says report
Following a year of economic uncertainty, B.C. anticipates some growth in 2026, though it is expected to be limited.
Deloitte Canada forecasts a 1.6 per cent GDP growth for B.C. in 2026, slightly up from the forecasted 1.4 per cent growth in 2025, according to its Wednesday report titled Reset over resolutions: Building economic momentum in 2026.
This places the province fourth highest across the country, following Newfoundland and Labrador (two per cent) and Saskatchewan and Alberta (2.1 per cent).
“Economic growth in B.C. is expected to remain weak this year relative to the Prairies provinces,” the report reads.
Although B.C. hosts two of the five major nation-building projects announced last fall — LNG Canada Phase 2 and the Red Chris Mine — weakness in the forestry sector offsets this positive momentum, according to the global professional services firm.
“The province will struggle to withstand 45 per cent tariffs on such an important sector,” which will hinder the province’s economic growth in 2026, reads the report.
The impact is already visible. Burnaby-based Interfor Corporation announced reductions across North America and the indefinite halt of operations in Grand Forks, B.C., last fall.
Meanwhile, Vancouver-based Canfor Corp. (TSX:CFP) reported a $172-million net loss for the third quarter of 2025 in November — marking its third consecutive quarterly loss in 2025.
Employment in the forestry, fishing, mining, quarrying, oil and gas industry dropped from 50,300 in January 2025 to 38,300 in November, a 23.9 per cent decline, according to Statistics Canada.
Deloitte attributes the province’s minor economic growth forecast in part to the B.C. government’s efforts to secure more federal support for the forestry industry.
“Helping to support gains going forward will be two more projects added to the federal fast-track project list, including the North Coast Transmission Line and the Kis Lisims LNG project,” the report notes.
Nationwide, Deloitte expects Canada’s GDP to rise 1.5 per cent in 2026, slightly down from the forecasted 1.7 per cent in 2025, noting that ongoing U.S. tariff uncertainties may keep consumers and businesses cautious about spending.
Deloitte noted that this year’s focus is the review of the CUSMA agreement scheduled for July, and stronger economic growth is expected in the second half of the year as conditions are put in place.
The report also expects the Canadian labour market to remain stable, with declining immigration driving weaker spending, while the housing market begins to recover with the support of government policies.
“This year is likely to mark an inflection point for Canada’s economy as governments attempt to execute on policies that will create a more attractive environment for investment,” reads the report.
