2026 British Columbia Budget Highlights
On February 17, 2026 British Columbia’s Minister of Finance, Brenda Bailey, tabled the province’s 2026/27 budget. We have highlighted selected tax measures from the budget that may affect individuals and small businesses in British Columbia.
INDIVIDUALS
Personal Tax Rates
An increase of the tax rate of the first income tax bracket was announced. The increase is from 5.06% to 5.60%. This means an additional $76 in income taxes for the average taxpayer in 2026. However, more than 40% of taxpayers will see savings when combined with the increase in B.C. tax reduction credit.
The 2026 individual income tax brackets have been indexed at the B.C. CPI rate of 2.2%. Moving forward, B.C. will pause tax bracket indexing from 2027 until 2030.
| 2025 Taxable Income | 2026 Taxable Income | Tax Rate |
|---|---|---|
| $0 to $49,279 | $0 to $50,363 | 5.60% |
| $49,279 to $98,560 | $50,363 to $100,728 | 7.70% |
| $98,560 to $113,158 | $100,728 to $115,648 | 10.50% |
| $113,158 to $137,407 | $115,648 to $140,430 | 12.29% |
| $137,407 to $186,306 | $140,430 to $190,405 | 14.70% |
| $186,306 to $259,829 | $190,405 to $265,545 | 16.80% |
| Over $259,829 | Over $265,545 | 20.50% |
Top Combined Federal and Provincial Tax Rates - 2026
| Other/Interest/ Salary/Pension | Capital Gains | Eligible Canadian Dividends | Non-eligible Canadian Dividends |
|---|---|---|---|
| 53.50% | 26.75% | 36.54% | 48.89% |
Top rates apply to taxable income over $265,545 based on known federal and provincial rates as of February 17, 2026.
Personal Income Tax Measures
- Effective January 1, 2026, the applicable percentage for the basic personal income tax credits is also increased from 5.06% to 5.60%. This will increase the amount of tax credits that can be claimed under the basic personal amount, age amount, and other basic non-refundable income tax credits to fully or partially offset the tax rate increase for taxpayers.
- A new temporary, refundable tax credit (2026-2030) for personal support workers in health care, worth 5% of earnings up to $1,100.
Other Tax Measures
- Effective January 1, 2027, the speculation and vacancy tax rate for foreign owners and untaxed worldwide earners will increase to 4%, up from the current 3%.
- Effective January 1, 2027, B.C. is increasing the additional school tax rates from 0.2% to 0.3% for property values between $3 million and $4 million and from 0.4% to 0.6% for property values above $4 million, effective for the 2027 tax year.
Provincial Sales Tax Measures
Provincial Sales Tax (PST) is expanded effective October 1, 2026, to include more professional services, such as accounting, architectural, engineering and geoscience, rental and strata management and security, as well as commissions related to buying and selling non-residential real estate. This change generally aligns B.C. with how other provinces apply sales taxes to these services. The PST on architectural, engineering and geoscience services will apply to 30% of the purchase price of services subject to the tax.
BUSINESSES
Corporate Tax Rates
The budget did not propose any changes to the provincial corporate income tax rates, and it did not change the $500,000 small business income threshold. The calendar year rates below reflect a December 31st year end.
| Income Type | B.C. Rate | Federal Rate | Combined Rates Calendar 2026 |
|---|---|---|---|
| General corporate | 12.00% | 15.00% | 27.00% |
| Small business | 2.00% | 9.00% | 11.00% |
| CCPC* investment | 12.00% | 38.67% | 50.67% |
| Non-CCPC investment | 12.00% | 15.00% | 27.00% |
| Manufacturing and processing income | 12.00% | 15.00% | 27.00% |
Based on known federal and provincial rates as of February 17, 2026.
*Canadian Controlled Private Corporation
Business Income Tax Measures
- To support manufacturing, a new temporary 15% manufacturing and processing investment refundable tax credit was introduced for businesses investing in new buildings, machinery and equipment used in manufacturing and processing.
- The Scientific Research & Experimental Development (SR&ED) tax credit will see significant changes including the return of capital expenditure eligibility and other amendments to align with recent changes to the federal SR&ED tax incentive program. The sunset date of August 31, 2027, for the SR&ED tax credit is also removed.
- The budget also provides temporary relief to forest tenure holders, with a one-year voluntary stumpage deferral program, effective January 1 to November 30, 2026.
- The shipbuilding and ship repair industry tax credit was extended until the end of 2027.
Refer to the 2026 British Columbia budget for further details.
This has been prepared by the Total Wealth Solutions Group of Raymond James Ltd., (RJL). Statistics and factual data and other information are from sources RJL believes to be reliable, but their accuracy cannot be guaranteed. It is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities nor is it meant to replace legal, accounting, taxation or other professional advice. We are not tax advisors, and we recommend that clients seek independent advice from a professional advisor on tax-related matters. The information is furnished on the basis and understanding that RJL is to be under no liability whatsoever in respect thereof. This is intended for distribution only in those jurisdictions where RJL and the author are registered. Securities-related products and services are offered through Raymond James Ltd., Member of the Canadian Investor Protection Fund. Insurance products and services are offered through Raymond James Financial Planning Ltd., which is not a Member of the Canadian Investor Protection Fund.
