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International trade

Victoria's Economy to Face Challenges Amid Trade Uncertainty

Strategic Insights

— 2 min read

As the trade dispute with the U.S. continues to wreak havoc on the economy, Victoria has managed to insulate itself to some extent due to its service-centric nature. However, international migration restrictions and tariffs on goods-producing industries are taking a toll on the city's economic growth. According to the Conference Board of Canada's latest outlook, Victoria's per capita GDP is expected to grow by 1.1 per cent in 2025, but this growth will slow down in the coming years.

Key Takeaways:

  • Victoria's service-centric economy is expected to grow by 1.1 per cent in 2025, with real GDP forecast to grow 2% in 2025, falling to 1.8% in 2026 and 2027, and rising to 1.9% in 2028 and 2029.
  • International migration restrictions will see population gains in Victoria fall to a 15-year low in 2025 and weaken further in 2026, resulting in a 1.7 per cent loss in total employment in 2026.
  • Employment gains will slow down after a number of years of rapid increases, with average annual job growth expected to come in at 0.7 per cent from 2026 to 2029.
  • The retail sector is expected to experience a roller-coaster ride, with employment expected to climb 21.2 per cent in 2025, followed by a decline of 7.8 per cent in 2026 and 1.3 per cent in 2027.
  • Public administration employment is expected to fall 8.0 per cent in 2026 due to government spending cuts and record deficits.
  • A tightening labour market is expected to put upward pressure on wages, with average annual wage growth expected to rise by 2.2% over the next four years outpacing the projected 1.9% increase in inflation.
  • Housing construction is expected to face challenges due to labour constraints, with housing starts forecast to fall from 4,870 units in 2025 to 3,660 units in 2026 and 3,330 units in 2028 and 2029.
  • The average resale price of a home has stabilized at $1,000,000 since the beginning of 2022, well out of the price range of the average Canadian.

Statistics:

  • 1.1 per cent: Victoria's per capita GDP growth in 2025
  • 2%: Real GDP growth in Victoria in 2025
  • 1.8%: Real GDP growth in Victoria in 2026 and 2027
  • 1.9%: Real GDP growth in Victoria in 2028 and 2029
  • 15-year low: Population gains in Victoria in 2025
  • 1.7 per cent: Loss in total employment in Victoria in 2026
  • 0.7 per cent: Average annual job growth in Victoria from 2026 to 2029
  • 21.2 per cent: Employment growth in the retail sector in 2025
  • 7.8 per cent: Decline in employment in the retail sector in 2026
  • 1.3 per cent: Decline in employment in the retail sector in 2027
  • 8.0 per cent: Decline in public administration employment in 2026
  • 2.2 per cent: Average annual wage growth in Victoria over the next four years
  • 1.9 per cent: Projected increase in inflation over the next four years
  • 4,870: Housing starts in 2025
  • 3,660: Housing starts in 2026
  • 3,330: Average housing starts in 2028 and 2029
  • $1,000,000: Average resale price of a home in Victoria since the beginning of 2022

Sources:

  • Conference Board of Canada

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