The following op-ed, co-authored by ICBA Chief Economist Jock Finlayson and consulting economist Ken Peacock, first ran in Business in Vancouver on September 26, 2025.
As the Canadian and B.C. economies hover on the cusp of recession, the outlook for the provincial job market is darkening. The latest employment numbers reveal that B.C. lost almost 16,000 jobs in August, a sizable monthly drop. Canada shed 100,000 jobs over the summer. In the past year, job growth in B.C. has decelerated sharply, running at a subdued 1 per cent pace both recently and for 2025 year to date.
The downturn in job creation reflects a fall-off in private sector hiring along with rising layoffs. But a bigger contributing factor is the inevitable curtailment of runaway hiring in the sprawling public sector – which includes government administration, health care, education and social services.
Based on average monthly levels over the January to August period, the number of employees in B.C..’s private sector is up just 0.7 per cent. Meanwhile, the employee count in B.C.’s broad public sector is up 1.5 per cent year-to-date. This is still twice the pace of private sector job gains. But it marks a dramatic fall from the jaw-dropping 6.1 per cent expansion in public sector payrolls in 2024. Over the past three years, more employees have been added in the public sector (79,000) than the private sector (75,000), even though B.C.’s private sector is three times larger measured by total job counts. Heavy reliance on government to drive employment growth is unsustainable. With the Eby government reporting record deficits and the province’s net debt exploding, British Columbia’s epic, multi-year public sector growth spurt has run its course. A period of grinding austerity lies ahead.
To summarize, public sector hiring has been principal source of job creation in B.C. for the past several years. Thanks to the fiscal disaster engineered by the Eby government, this will not be the case going forward. Instead, policymakers hoping to kick-start B.C.’s moribund labour market will need to look to the private sector to lead the charge. It is unclear whether the Premier and his cabinet and caucus colleagues are equipped – in terms of policy tool kit as well as their prevailing mind-set – to make the switch.
As we enter the final quarter of 2025, the job outlook is especially dim outside of large urban centres. The lower mainland is the only B.C. region to record any increase in private sector employment over the past year. On Vancouver Island and in the Thompson Okanagan region, there has been zero private sector job growth since January, while the Kootenay (-3.3 per cent), Cariboo (-7.3 per cent), North Coast (-9.5 per cent) and Northeast (-4.0 per cent) regions have all suffered declines.
Given these large setbacks, it is little wonder the increasingly desperate NDP government has suddenly embraced rapid project approvals and the sidestepping of normal permitting processes in a bid to accelerate investment in energy and other resource development projects.
The recent slowing in employment growth is not unique to B.C. Labour markets are softening right across the country, amid Trump’s mad-cap tariffs, high levels uncertainty, and the broader erosion of Canada’s global competitiveness. But other provinces have not relied on public sector hiring to the same extent as B.C. Collectively, the other nine provinces have posted significantly faster growth in private sector payroll employment than has British Columbia – both in 2025 and over the last few years.
British Columbia has also experienced an alarming drop in employment among young people. Year-to-date employment for those aged 15-25 has fallen by a hefty 4.4 per cent in B.C. In the rest of Canada, employment in this age cohort is actually up 2.5 per cent compared to the same January to August period last year.
Given B.C.’s soggy job market and the wave of layoffs we expect will continue in the home-building and real estate development industries over the next 12-18 months, it makes sense for Victoria to prioritize natural resource and infrastructure projects. Unfortunately, even if they are “fast-tracked,” these projects will take time to advance; they will not spark an immediate turnaround in GDP or employment growth.
There are no quick fixes for B.C.’s deepening malaise. Bolstering the foundations of economic growth and ensuring that government polices, taxation regimes, and regulations are aligned with the goal of stronger private sector job creation and investment will be necessary if elected leaders hope to make the province a more attractive place for entrepreneurs, growth-oriented companies, and business innovators.
