2026 British Columbia Budget Summary

On February 17, 2026, Brenda Bailey, British Columbia’s Finance Minister, announced the 2026 British Columbia Budget.  The Budget aims to safeguard core services like health care and education, improve infrastructure, protect the public and create opportunities for skills training. Changes were made to the existing BC personal tax rates but not to the corporate tax rates.

Crowe MacKay’s tax experts summarize British Columbia’s new tax measures below. If you require assistance, connect with us in Alberta, British Columbia, Northwest Territories, or the Yukon.

Lowest Personal Income Tax Rate and Basic Personal Income Tax Credits

Effective for the 2026 and subsequent taxation years, the lowest personal income tax rate is increased from 5.06 per cent to 5.60 per cent.  This rate will apply to an individual’s first $50,363 of taxable income with the change appearing on paycheques after July 1, 2026 as payroll withholdings get updated. The applicable percentage for basic personal income tax credits is also increased from 5.06 per cent to 5.60 per cent.

BC Tax Reduction Credit

Effective for the 2026 taxation year, the maximum BC tax reduction credit is increased by $115 to $690.  The credit is non-refundable and can be claimed by lower-income individuals.  The maximum amount can be claimed by individuals with a net income of less than $25,570 for 2026.  The credit is reduced by 3.56 per cent for income that exceeds this threshold. Individuals with income up to $44,950 would receive a partial credit.

Personal Income Tax Brackets and Non-Refundable Tax Credits – Indexation Paused

Effective for the 2027 through 2030 taxation years, the personal income tax brackets and non-refundable tax credits are paused at their 2026 income levels.  Indexation will return for the 2031 and subsequent taxation years.

Tax Credit for Volunteer Firefighters and Rescue Volunteers

Effective for the 2026 and subsequent taxation years, the amount of income an individual can claim for the volunteer firefighters and search and rescue volunteers tax credit has doubled by increasing it from $3,000 to $6,000. This increases the maximum tax credit that may be claimed from $168 to $336.

New Children and Youth Disability Supplement

A new children and youth disability supplement for the B.C. Family Benefit is introduced for payments beginning after July 1, 2027.  The new payment will be income-tested and available to families who have children with support needs and who meet the eligibility criteria.  

Families will be eligible for an additional annual amount of up to $6,000 for each eligible dependent.  Eligibility will be determined based on entitlement for the federal disability tax credit.  Furthermore, the maximum payment amount of $6,000 will be reduced at a rate of 4 per cent for families with income above the $50,000 threshold.

Farmers’ Food Donation Tax Credit and Book Publishing Tax Credit

Effective on royal assent, the farmers’ food donation tax credit is made permanent. The non-refundable credit is equal to 25 per cent of the fair market value of donated agricultural products.

Effective March 31, 2026, the book publishing tax credit is made permanent.

Scientific Research and Experimental Development Tax Credit

The Scientific Research and Experimental Development (SR&ED) tax credit is amended as follows to align with recent changes to the federal SR&ED tax incentive program:

• The expenditure limit for the refundable tax credit is increased from $3 million to $6 million;
• The taxable capital phase-out thresholds are increased from $10 million and $50 million to $15 million and $75 million, increasing the range over which the expenditure limit is gradually reduced;
• Capital expenditures are eligible for the tax credit again; and
• Eligible Canadian public corporations are now able to claim the refundable SR&ED tax credit.

These changes are effective for taxation years that begin on or after December 16, 2024.  The sunset date for the SR&ED tax credit is also removed.

Mining Exploration Tax Credit Eligible Expenditures

Subject to legislative amendments to the Income Tax Act (Canada), effective November 4, 2024, the Province will amend the BC mining exploration tax credit to clarify that expenses incurred for the purpose of determining the quality of a mineral resource in Canada does not include expenses related to determining the economic viability or engineering feasibility of the mineral resource. This change aligns with the announcement in Federal Budget 2025.

Production Services Tax Credit  pre-certification requirement

Effective on royal assent, the requirement for corporations to file a notice of intent to claim the production services tax credit is eliminated for notices due on or after February 17, 2026.  Notices that were required to have been filed prior to February 17, 2026 will continue to be subject to the previous requirements and timelines.

Film Incentive BC and Production Services Tax Credit filing deadline

Effective on royal assent, the time in which a corporation must file a claim for either the Film Incentive BC tax credit or the Production Services tax credit is extended from 18 months to 36 months after the end of the corporation’s taxation year.  The new time limit of 36 months applies to corporations with a taxation year beginning on or after February 17, 2026. For corporations with taxation years beginning before February 17, 2026, the time limit of 18 months is extended by a further 18 months if that time limit would have expired on or after February 17, 2026.

Film Incentive BC Tax Credit completion certificate requirement

Effective on royal assent, corporations claiming the Film Incentive BC tax credit are no longer required to file a completion certificate with the Canada Revenue Agency that would have been due on or after February 17, 2026.  This change relates to the filing of a tax credit claim and does not affect a corporation’s requirement to apply for a completion certificate with the certifying authority.

Production Services Tax Credit Certification Fee and Major Production Tax Credit Certification Fee

Effective March 1, 2026, the accreditation certificate fee for the production services tax credit is increased to $19,000 for corporations that began principal photography after December 31, 2024 and apply for certification on or after March 1, 2026.  The major production tax credit certificate fee is set at $5,000.

BC Manufacturing and Processing Investment Tax Credit

Effective April 1, 2026, a new temporary refundable investment tax credit is introduced for investments made by Canadian-controlled private corporations in buildings and machinery and equipment used for manufacturing and processing, subject to exclusions in the legislation.

The new investment tax credit is calculated as 15 per cent of eligible investments up to $2 million, for a maximum credit of $300,000.  The new investment tax credit is available at a rate of 15 per cent for investments made on or after April 1, 2026 until March 31, 2031. Starting April 1, 2031, the tax credit rate will be reduced by 2.5 percentage points per year until it is fully phased out for investments made after March 31, 2036.

Shipbuilding and Ship Repair Industry Tax Credit

Effective on royal assent, the shipbuilding and ship repair industry tax credit is extended 
for one year to the end of 2027.

Book publishing tax credit made permanent

The book publishing credit will be made permanent and removing the March 31, 2026 sunset date.

Provincial Sales Tax (PST) Expanded to Certain Professional Services

Effective October 1, 2026, the following services will become subject to the Provincial Sales Tax (PST):

• Accounting and bookkeeping services;
• Architectural services;
• Engineering and geoscience services;
• Rental property and strata management services
• Commissions related to buying and selling non-residential real estate; andsecurity and private investigation services.

The PST on architectural, engineering, and geoscience services will apply to 30 per cent of the purchase price of the services subject to the tax.  Businesses that provide these services will need to register to collect and remit PST. More information will be made available before the taxes come into effect.

PST Exemptions eliminated

Effective October 1, 2026, BC will eliminate certain PST exemptions. This includes clothing-related materials such as clothing patterns, yarn, natural fibres, synthetic thread and fabric when making or repairing clothing of footwear  and also services related to clothing and footwear. Basic laundry services will remain exempt. Additionally, exemptions being eliminated for basic cable TV, toll-free telephone and residential land line services.

Speculation and Vacancy Tax Act

Speculation and Vacancy Tax Rate Increased

Effective January 1, 2027, the rate for foreign owners and untaxed worldwide earners, as well as others specified under the Speculation and Vacancy Tax Act currently taxed at 3 per cent, will increase to 4 per cent.  This increased tax rate will apply to the speculation and vacancy tax payable by these property owners based on the use of their residential properties during the 2027 calendar year and onward.

Land Tax Deferment Act

Property Tax Deferment Program

Effective for the 2026 and subsequent taxation years, the property tax deferment program interest rate terms are amended.  The interest rates for the regular and families with children programs are harmonized, increased to a rate of prime plus two per cent compounded monthly.  Any amounts deferred in respect of taxation years prior to 2026 will continue to be subject to the interest rate terms set under their applicable deferment agreements.

Property Transfer Tax

Purpose-Built Rental Exemptions Expanded

Effective January 1, 2025, the purpose-built rental exemptions from the property transfer tax are expanded to apply to newly constructed purpose-built rental buildings leased for a maximum of 24 months before their first taxable transaction is registered at the Land Title and Survey Authority of British Columbia.  The 24-month period begins on the commencement date of the first lease, and leases must have a term of one month or longer.

Purchases of new qualifying purpose-built rentals are exempt from the further 2 per cent property transfer tax, which applies to the fair market value of the residential component of a taxable transaction that exceeds $3 million.  In addition, transactions that occur between January 1, 2025 and December 31, 2030 are exempt from the general property transfer tax.  These exemptions were initially introduced in Budget 2023 and Budget 2024.

To qualify, properties must be newly constructed, non-stratified, and held as rentals on a monthly basis or longer for at least 10 years.  The residential portion of the property must be entirely used for rental purposes and have at least 4 apartments.

Other Technical Measures

Other technical changes were included in Budget 2026 for various tax acts. Some highlights include:

• Effective January 1, 2027, the Speculation and Vacancy Tax Act is to be amended to charge property owners a $250 non-refundable late declaration penalty if not declared by the March 31st due date each year.
• On royal assent, the Speculation and Vacancy Tax Act will be amended to remove a property owner’s right to appeal an assessment that arises from their own declaration that an exemption does not apply to their property.
• On royal assent, the Property Transfer Tax Act will be amended to allow a person to appeal the imposition of a gross negligence penalty to the Minster of Finance. It will also be amended for extending the limitation period for charging a person with an offence from one year to six years to align the limitation period with all offences under the Act.
• Effective February 18, 2026, the Provincial Sales Tax Act will be amended to enable sellers of goods to provide a point of sale exemption to refund businesses that purchase goods for use outside the province. This new exemption would allow the purchaser to remove the goods from the province rather than requiring the seller to do so.

For more information on the 2026 British Columbia Budget, please visit the Government British Columbia’s website.