CPABC: TRADE TENSIONS PUT PROVINCE’S ECONOMIC RECOVERY ON HOLD

Since the release of last year’s edition of the BC Check-Up: Work report, the BC economy has grappled with ongoing trade disruptions as tariffs became a staple of the United States’ foreign policy playbook. Sector-specific levies on softwood lumber, metal products, and energy have had direct effects, while the broader economy has proceeded with caution. Meanwhile, the push to integrate artificial intelligence into the global economy has continued to transform how people work. This article offers some highlights from the 2025 report.

Trade issues compounded the challenges of an already soft labour market

Employment growth has been modest over the past year. The number of people working in the province reached 2.94 million in August 2025, and although this represented an increase of 26,900 people (+0.9%) from August 2024, the more recent trend tells a less positive story.

Despite the first wave of US tariffs coming into effect on March 4, 2025, the BC labour market displayed some resilience during the first half of the year, with employment peaking in June. By August, however, employment had fallen by 32,000 people or 1.1%, as hiring remained sluggish and trade-exposed industries responded to the shifting policy landscape.

The effects of global trade policy changes on BC’s already weakened labour market become more evident when looking at the province’s job vacancy and unemployment numbers. BC’s job vacancy rate, which has remained below 2019 levels since early 2024, was 3.0% in July 2025—just 0.1 percentage points above the lowest rate recorded since data collection began in 2015.

Even before the start of 2025, a slowdown in hiring had led to longer job search times and a gradual increase in the unemployment rate. This trend continued through August 2025, when BC’s unemployment rate reached 6.2% (see Figure 1). While this compared favourably to the national unemployment rate of 7.1%, it still represented an increase of 0.4 percentage points for BC compared to August 2024.

The struggle to find work continued for BC’s youth

Hiring conditions have been particularly tough on BC youth over the past year. By August 2025, the employment rate among 15- to 24-year-olds had fallen to 51.8%, down 2.3 percentage points from the year before. This marked the second summer in a row that students faced a tough job market due to job scarcity.¹

Interestingly, the youth unemployment rate also edged lower over the past year due to a decline in the number of young British Columbians looking for work. In August 2025, 20,500 young people wanted a job but did not look for one, and they were therefore not counted among the unemployed. When these individuals are taken into account, the adjusted unemployment rate is 17.6%, similar to the August 2024 rate of 17.3% (unadjusted for seasonality, see Table 2).

Meanwhile, the unemployment rate among core-age British Columbians (aged 25 to 54) increased by 0.9 percentage points year-over-year, reaching 5.7% in August 2025, and the unemployment rate among people aged 55 and older held steady at 4.0%.

Goods and services sectors shared employment gains

Although most industries experienced only marginal shifts in their employment levels over the last year, each sector saw a few significant movements. For example, in the goods-producing sector, employment edged higher by 5,000 workers (+1.0%), with gains concentrated in construction. This industry employed 267,800 people in August 2025, marking an increase of 16,300 workers (+6.5%) year-over-year. Despite facing challenges such as the lingering effects of high interest rates and a drop in industrial activity,² employment in the industry returned to February 2020 (pre-pandemic) levels over the past year; this bounce-back was due to a surge in institutional building and the resilience of the residential sector.

By contrast, the natural resources industry, which includes forestry, fishing, mining, quarrying, and oil and gas, lost 11,700 workers (-21.2%) between August 2024 and August 2025. This loss occurred during a particularly challenging period for BC’s forestry sector—in August 2025, the US effectively doubled countervailing and anti-dumping duties on softwood lumber to 35% for most producers.³ Then, in late September, the sector was dealt another blow when the US announced a 10% tariff on softwood lumber (which came into effect on October 14).

Other BC exporters in the natural resources industry were exposed to US trade action, with the US imposing a 10% tariff on Canadian energy and a 50% tariff on steel, aluminum, and semi-finished copper products during the first half of 2025.⁴

In the services-producing sector, a year-over-year decline of 17.5% in information, culture and recreation employment, which amounted to a loss of 26,000 workers, was offset by gains in wholesale and retail trade and in professional, scientific and technical services. The former added 23,100 workers (+5.4%), while the latter, which is the largest employer of CPAs, added 25,300 workers (+8.6%) and was the fastest-growing industry over the last year (see Figure 2).

Generative AI set labour markets on a transformational path

Although trade and tariffs have dominated the headlines for most of 2025, there’s another development that stands to drastically reshape labour markets: the rise of artificial intelligence (AI). Since OpenAI launched ChatGPT in November 2022, there has been a push to develop new tools and integrate generative AI into existing technologies to increase productivity. AI has already created new opportunities and changed how labour is deployed, and it will undoubtedly continue to do both.

While early enterprise-wide adoption has yielded mixed results,⁵ many studies show that AI has changed the way people complete tasks, often enabling them to save time and increase productivity on an individual level.⁶ But as the technology continues to evolve and efficiency continues to increase, there are growing concerns that fewer workers will be needed to complete the same amount of work and the ways in which routine or easily automatable tasks are performed will completely change. One of the more pessimistic views expressed in recent months came from Dario Amodei, the CEO of Anthropic (the company that developed the Claude AI assistant), who warned that AI could eliminate half of all entry-level white-collar jobs in the next five years.⁷

A more nuanced analysis was published by the International Labour Organization (ILO) in May 2025.⁸ The ILO working paper classified occupations⁹ into six categories (four gradients, plus two groups with limited/no exposure) based on their overall exposure to AI and the variability of task-level exposure within them. Most jobs held by CPABC members have some exposure to AI, albeit to varying degrees (see Figure 3). Accountants were categorized as having a moderate exposure to AI, meaning that these jobs typically require a mix of tasks that have high and low/no exposure risk.

Interestingly, many CPAs are employed in roles with limited occupational exposure. For example, CPAs working in management roles or senior positions within a company would typically fall into the “minimal exposure” category, as AI can often be viewed as a way to augment rather than replace specialized skills.

In CPABC’s latest BC Check-Up: Work survey (more results on page 22), we asked CPABC members how AI was redefining roles in finance and accounting. Overall, 46% of senior CPAs said that AI was either extremely or very likely to change the work done by finance and accounting staff in the next five years. That percentage jumped to 70% when respondents considered the roles of junior accounting staff only.

Collectively, these insights highlight the ongoing impact of technological change on both the accounting profession and the broader economy. Many employers are already changing the types of work performed by junior staff, and they’ll need to continue to adapt to ensure that younger workers are still gaining the skills needed to progress in their careers.

What’s on the horizon?

At this time last year, all signs pointed to a steadying of the economy, as inflation was largely under control and interest rates had fallen to less restrictive levels. Unfortunately, everything changed when the new US administration took office and immediately sought to overhaul global trade flows.

While British Columbia’s labour market remains sluggish, we may be approaching the bottom in terms of unemployment. Forecasters at TD Bank¹⁰ expect BC’s unemployment rate to peak at 6.5% around the end of the year, and then trend lower in 2026.

Aside from mending Canada’s trading relationship with the United States, government leaders need to focus on diversifying our trading partners and our economy, while also finding ways to support workers and businesses through rapid technological change.

To access the full BC Check-Up: Work report, visit bccheckup.com.

Jack Blackwell is CPABC’s economist.

Footnotes