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

February 18, 2026

BC Budget 2026
What It Means for Small & Medium Businesses: So What. Now What.

Three big takeaways for SMEs:

Some of your operating costs are going up - especially if you rely on accountants, engineers, architects, property managers, or commercial real estate services.
Household affordability pressure remains real - which means consumer demand and wage expectations may tighten.
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.