• BC Chamber on Impacts of 2026 Provincial Budget: 2/18/2026

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    February 18, 2026
    BC Budget 2026
    What It Means for Small & Medium Businesses: So What. Now What.
     
    Three big takeaways for SMEs:
    1. Some of your operating costs are going up - especially if you rely on accountants, engineers, architects, property managers, or commercial real estate services.
    2. Household affordability pressure remains real - which means consumer demand and wage expectations may tighten.
    3. If you manufacture, process, or invest in R&D, there is meaningful upside in this budget.
    What Changed & What Most SMEs Will Feel

    PST Expands to Key Professional Services

    What Changed: Starting October 1, 2027 PST will now apply to a number of services businesses commonly use:
    • Accounting and bookkeeping
    • Architectural services
    • Engineering and geoscience services (partially applied)
    • Strata and rental property management
    • Security and investigative services
    • Certain non-residential real estate commissions
    So what – as a SME using these Services
    • This is a direct cost increase.
    • It affects both operating expenses and project budgets.
    Now what
    • Reforecast professional service costs for 2027
    • Confirm with vendors how they are applying PST.
    • Review whether these costs can be passed through or need to be absorbed.
    So what – as a provider of these professional services
    • This is a direct cost increase for your customers.
    • This is not a business input expense.
    • If you don’t currently collect PST, you will need to register with the Ministry of Finance.
    Now what
    • Begin remitting PST to the Provincial Government for Oct 1, 2026.
    • Inform your clients of upcoming changes.

    Personal Income Tax Changes

    What changed
    • All personal income taxes will increase from 5.06 to 5.6% by July 1, 2026
    • The lowest tax bracket will have a tax credit to offset, currently targeting 40% of the population
    • Personal income tax brackets are will not be indexed from 2027 - 2030
    So what
    • Some households will feel incremental financial pressure.
    • Staff may notice payroll changes and ask questions.
    • In consumer-facing sectors, discretionary spending may soften.
    Now what
    • Build conservative demand forecasts in price-sensitive sectors.
    • Prepare to explain payroll changes to staff.
    • Expect wage conversations in tight labour markets.
    Permitting Capacity Investment

    What Changed:
    • Government is investing to improve permitting processes in natural resource and tourism sectors.
    So what
    • Reduce delays
    • Shorten approval timelines
    • Lower holding costs
    Now what
    • Engage early with permitting authorities.
    Manufacturing & Processing Investment Credit (15% Refundable)

    What changed:
    • Corporations investing in qualifying buildings or machinery for manufacturing or processing can receive a 15% refundable tax credit – up to 2M (capped at $300K)
    So what
    • It may make expansion more viable.
    Now what
    • Revisit capital investment plans.
    • Run new ROI models including the credit.
    Infrastructure Spending Continues with new pacing

    What Changed:
    • The pacing of Government projects in some cases will be slowed or re-sequenced to manage cost pressures and labour capacity. (hospitals, highways, transit, schools, public infrastructure)
    So what
    • The work pipeline still exists.
    • Not every project starts immediately.
    Now what
    • Stay connected to regional project updates.
    R&D Credit Stability

    What changed:
    • The provincial Scientific Research & Experimental Development (SR&ED) becomes more permanent and aligned with the federal rules. This provides a tax incentive for companies conducting R+D.
    So what
    • Innovation-driven firms gain predictability.
    Now what
    • Confirm eligibility.

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