B.C. raises income taxes and expands sales tax to address ballooning debt

B.C.'s 2026 budget raises income tax rates and broadens the provincial sales tax while the government projects provincial debt will rise toward $183 billion.

B.C.'s 2026 budget introduces tax changes intended to slow a growing provincial debt. Finance Minister Brenda Bailey said the measures aim to protect critical services and are framed as a necessary alternative to spending cuts. The government projects provincial debt of about $154 billion now could rise to roughly $183 billion next year. Key points: - Income tax: the basic provincial rate on the lowest bracket rises from 5.06% to 5.6%, with the government estimating an average increase of $76 in 2026 income taxes and an increase in the maximum tax reduction credit to $690. - Sales and property levies: the provincial sales tax (PST) will be expanded to cover more professional and commercial services, and the School Tax rates on very high-value homes will increase; the Speculation and Vacancy Tax for foreign or untaxed owners rises to 4% for 2027. - Deferment and credits: new Property Tax Deferment loans will be charged at prime plus 2% compounded monthly, and a temporary refundable 15% tax credit for manufacturing and processing investments will take effect in April 2026. - Fiscal picture: the government projects an annual deficit of $13.3 billion for 2026-27 and says the measures primarily affect middle and higher earners. Summary: The budget is presented as a response to a rising debt outlook and is designed to preserve public services without direct spending cuts. Reactions are divided on the mix of measures and their distributional effects. Undetermined at this time.