08:21 AM EST, 11/28/2025 (MT Newswires) -- British Columbia's (B.C.) Q2 provincial outlook notes that the economic performance is mixed among sectors, as activity has been stirred by United States trade policies and associated uncertainty, said National Bank of Canada.

Generally, dampened exports and housing activity

have weighed on economic growth this year, while strong consumer spending, residential construction, and government investment have provided a boost at the margin -- not unlike what has occurred in other Canadian provinces, noted the bank.

While tariffs negatively impact business confidence,

investment and growth overall, B.C.'s diverse economy and greater access to non-U.S. markets help to mitigate some of the risks stemming from the shift of global trade regimes, stated National Bank.

Since the Q1 report, real gross domestic growth for 2025 has been revised down by one tick, to 1.4%, while 2026

is poised for a 1.3% expansion, unchanged from prior guidance.

Employment growth is expected to soften through 2026. That's partly a function of lower migration and population growth. However, the unemployment rate is anticipated to stabilize, averaging 6.2% and 6.1% in 2025 and 2026, respectively. While those projections are notedly higher than what was envisioned back in a pre-tariff world, the unemployment rate forecast has brightened relative to Budget 2025 -- where a jobless of 6.7% had been originally contemplated for 2025.

B.C. projects a $11.2 billion deficit for 2025-26, representing a near-$400 million net improvement versus the most recent guidance from Q1, pointed out National Bank.

As for borrowing, the bank recalled that B.C. had originally

budgeted for $31.1 billion in gross borrowing for the current fiscal year. That requirement expanded to $35.1 billion by the Q1 report. But in a welcome development for bondholders, gross financing needs have since receded $2.9 billion to $32.2 billion.

There's been considerable progress made against the still-sizeable borrowing requirement, it added.