Weekly Advice Column: BC Budget 2026

Last updated: Feb. 19, 2026 

BC Budget 2026: What It Actually Means for Business Owners and Families

British Columbia’s 2026 budget is officially out.

And while there weren’t any dramatic, headline-grabbing tax shocks, there are several changes that could quietly impact your costs, your planning, and your long-term tax picture.

Here’s the plain-English version of what matters and what you might want to think about next.

What we all want to know: there will be no corporate tax rate change

Let’s start with what didn’t happen. Corporate income tax rates stayed the same. If you own a business, there’s no immediate rate shock to absorb.
But that doesn’t mean everything stayed neutral.

The good news: there’s money on the table for manufacturers and processors.

BC is introducing a refundable 15% Manufacturing & Processing Investment Tax Credit for eligible corporations investing in buildings, machinery, and equipment used in manufacturing or processing in the province.

If you’re:

• Expanding facilities
• Purchasing major equipment
• Scaling production

This could meaningfully reduce the real cost of those investments — provided timing and documentation are handled properly. If you’re not in manufacturing or processing, this one may not apply directly to you.

The one that will cost most businesses money: PST expanding to professional services.

This is one of the changes that could affect a lot of business owners. BC plans to apply 7% PST to certain professional services, including:

• Accounting and bookkeeping
• Engineering and architectural services
• Some real estate and property services
• Security and investigation services

For most businesses and farms, PST paid on these services is generally not recoverable.

Translation: this becomes a real cost increase.

If you’re budgeting for:

• An expansion
• A new build
• Professional consulting
• Ongoing bookkeeping or advisory support

This change should factor into your financial planning.

Personal taxes are creeping up (gradually)

Two things are happening on the personal side:

• The lowest BC personal tax rate increases starting in 2026.
• Tax brackets and credits will not be indexed to inflation from 2027 through 2030.

The second point is the quiet one.

When tax brackets don’t move with inflation, normal income growth can push more of your income into higher brackets over time. That’s often called “bracket creep.” For owner-managers who pay themselves through salary, dividends, or a mix of both, this is a good year to revisit compensation planning.

Innovation Businesses Get More Certainty

BC is also proposing to make its SR&ED credit permanent and increase refundable limits. If your business invests in research, development, or product/process improvement, this signals longer-term support for innovation, but strong internal documentation remains critical to accessing those credits.

So… should you be worried?

Not necessarily. But you should be aware. Budget changes often don’t hit all at once. Instead, they show up gradually through:

• Slightly higher personal tax over time
• Higher professional service costs
• More complex planning decisions
• Shifts in capital investment timing

The biggest impact usually isn’t one line item; it’s how multiple changes interact with your specific situation.

What to Do Next

If you’re in BC, this is a strong year to revisit:

• Major equipment or facility investments
• Project budgets that involve professional services
• Owner compensation strategy
• Long-term cash flow planning

Government policy changes. Good planning adapts with it. 

If you’d like help understanding how BC Budget 2026 affects your business or family specifically, starting a proactive planning conversation now is often the smartest move.

Book a Free Tax Consultation