NANAYAKKARA & WHIDDEN: Entrepreneurs are tired of Victoria's blame game — they want action

You do not need to own a business to know something is off in British Columbia. You can see it in empty storefronts, shorter hours, and the growing sense that getting ahead here is harder than it used to be.

Canada is in an entrepreneurial drought, and BC is helping lead it.

An entrepreneurial drought occurs when business closures outpace openings for four or more quarters, and CFIB data show BC has now gone six straight quarters with more business exits than entries.

This has real consequences on the ground. The province lost 20,000 jobs in February and another 19,200 in March. The government’s response last week followed the usual script: blaming everyone but themselves, including Trump’s tariffs and global uncertainty.

The government failed to mention that job losses in BC since December are worse than in any other province, or that most other provinces actually saw job gains over that period. In fact, BC is the only province in the country to record net employment losses over the last two years.

From high interest rates to trade uncertainty, every province is dealing with the same problems. Yet, British Columbia is getting worse results. BMO’s Douglas Porter put it bluntly: BC is "by far the weakest in the country over the past year."

Minimum wage increases, the explosion of costs in the public sector administration, mandatory paid sick days and tax hikes have all contributed to an environment that has diminished business confidence. Never mind the ever-increasing debt, now at $154 billion and rising fast. These are policy choices made in Victoria, not external factors imposed on BC.

Only 13% of BC small business owners say the provincial government supports them. Nearly two-thirds (63%), say they would not recommend starting a business today.

Anyone who cares about jobs, opportunity, or the province’s future should find this deeply worrying. These are the people who signed the lease, hired the staff, took on the debt and met payroll. If they are telling others not to follow them, the government should stop and ask why.

When fewer people are willing to take these risks, it means fewer jobs, fewer stores on our streets, fewer sponsors for local sports teams, and fewer reasons for young people to believe they can build something here.

A province does not run on government press releases. It runs on people willing to take a chance on a restaurant, a machine shop, a daycare or a corner store. About 66 cents of every dollar spent at small businesses like these stays in the local economy, compared to just 11 cents when it is spent at a multinational.

British Columbia’s recent budget was an opportunity for the government to reverse course and support small businesses. Instead, it raised taxes on almost everyone. It increased the bottom personal income tax rate, froze personal income tax brackets and non-refundable credits for the 2027–2030 tax years, making inflation bite even harder, and expanded the provincial sales tax (PST) to professional services such as accounting, engineering, and security services.

When the cost of bookkeeping, security and other core services goes up, small businesses do what they can to survive: they raise prices, delay hiring, shelve expansion plans or absorb the hit until they cannot anymore. CFIB’s March survey found 80%t of BC businesses oppose expanding the PST to professional services, and 72% say they are likely to pass on some or all of those new costs to customers.

Once again, these are choices made by the BC government that make it more expensive to work, invest and build, not just global economic forces. And, once again, the results are worse in BC than other provinces. Despite raising taxes, the province projects a $13.3 billion deficit this year, with more shortfalls ahead and no clear plan to turn things around. Economist Trevor Tombe points out that this deficit is the largest in the country, even exceeding the federal government’s shortfall.

Lenders are paying attention while interest costs continue to rise. Last month, credit rating agency Moody’s downgraded BC and kept a negative outlook. It warned that risks remain, pointing to “policy-driven spending,” structural deficits, and rising debt. This string of deficits and the credit downgrade makes borrowing more expensive, leaving taxpayers on the hook through higher interest costs and less room to fund public services.

Global pressures are real, but BC’s underperformance is also self-inflicted. A province does not become harder to hire, invest and build in by accident. It happens when governments pile on costs, delays and uncertainty. British Columbians know tariffs and conflict can inflict costs. But they also know this province has become too expensive and too difficult a place to get ahead after years of homegrown choices that have steadily piled on costs.

If Victoria wants to know why confidence is weak, it does not need to look to Tehran or Washington. It should first look in the mirror. Small business owners keep pointing to the same made-in-BC problems: high taxes, red tape, payroll costs that penalize growth, and constant rule changes that make planning for the future harder.

If the province wants stronger job growth, healthier communities and more sustainable public finances, it must stop treating entrepreneurs like an afterthought.

Kalith Nanayakkara is the Senior Policy Analyst for British Columbia at the Canadian Federation of Independent Business

Bradlee Whidden is the Economist for Western Canada at the Canadian Federation of Independent Business