Budget Bill: Taxes, Housing and Hiring Overhaul

Summary#

This bill puts many 2026 budget changes into law. It adjusts taxes, creates and extends some tax credits, changes reporting deadlines, and makes several housing and property rules clearer. It also moves oversight of public‑service hiring into government and ends the separate Office of the Merit Commissioner.

Key changes and impacts:

• Adds Provincial Sales Tax (PST) to five service areas: accounting, architectural, engineering, non‑residential real estate, and security services (most starting October 1, 2026).
• Raises the lowest personal income tax rate, but increases the BC tax reduction credit; pauses most inflation indexing of tax brackets from 2027 to 2030.
• Creates a new disability supplement for families who get the BC Family Benefit and have a child who qualifies for the federal disability tax credit (payments start after June 2027).
• Launches a new BC manufacturing and processing investment tax credit (for new equipment placed in use from April 1, 2026 to March 31, 2036), and makes several other credits permanent or longer.
• In housing: increases Speculation and Vacancy Tax rates in 2027, raises the additional school tax on high‑value homes, creates a Property Transfer Tax break for purpose‑built rental buildings, and evens out the Home Owner Grant by removing higher amounts for northern and rural areas.
• Moves public‑service hiring “merit” oversight into the BC Public Service Agency and dissolves the independent Merit Commissioner’s office; earlier publication deadlines for public accounts and reports (by July 31 each year).
• Lets the government continue to forecast budget deficits through 2028–29 if needed.

What it means for you#

• Individuals and families

  • Personal income tax: The rate on the lowest tax bracket goes up in 2026. The BC tax reduction credit also goes up, which can offset or reduce the impact for lower‑income filers. Most tax brackets and credits will not be adjusted for inflation from 2027 to 2030, which may increase taxes over time as incomes rise.
  • New disability support: If you receive the BC Family Benefit and have a child who qualifies for the federal disability tax credit, you can get an extra monthly amount starting after June 2027.
  • Volunteers: Bigger tax credit for volunteer firefighters and search and rescue volunteers.
  • Renters: The renter’s tax credit continues to be adjusted for inflation through 2030.

• Homeowners and property buyers

  • Home Owner Grant: The higher grant for northern and rural areas is removed. A single province‑wide amount will apply. Owners in those areas may receive less than before.
  • High‑value homes: The additional school tax on high‑value residential properties increases, so affected owners may pay more.
  • Tax deferment: If you use the property tax deferment program, interest for 2026 and later will be set by regulation (rate and method to be prescribed by the minister).
  • Speculation and Vacancy Tax: Rates increase starting in 2027. One route to appeal an assessment is removed.
  • Property Transfer Tax: A new exemption or refund applies when buying certain purpose‑built rental buildings that have been rented for monthly or longer terms in the 24 months before registration and not otherwise used as dwellings.

• Businesses and non-profits

  • New PST on services: PST applies to accounting, architectural, engineering, non‑residential real estate, and security services. For architecture and engineering, tax applies to 30% of the fee (effective rate about 2%). For accounting, non‑residential real estate, and security services, the tax rate is 7% of the fee. Out‑of‑province services related to BC or sold to BC residents may also be taxed.
  • Manufacturing and processing: A new investment tax credit for new machinery and equipment used in BC manufacturing or processing, at a higher rate in early years and declining over time. Annual claim limits apply for associated corporations, and you may have to repay if the equipment is sold or moved to non‑eligible use soon after.
  • Innovation and sectors: The scientific research and experimental development credit becomes permanent, and more public corporations can get the refundable part. The book publishing credit is made permanent. The shipbuilding and ship repair credit is extended by one year.
  • Film and TV: Some application fees rise in 2026, but certain filing steps are simplified (for example, no completion certificate needed for some credits) and timelines to file are longer.
  • Professional services: Clients may see higher bills due to PST on services. Vendors must register, collect, and remit tax, and follow new proof and record rules.

• Public sector employees and applicants

  • The independent Office of the Merit Commissioner is dissolved. The head of the BC Public Service Agency becomes the “merit commissioner.” Some previous audit and review powers are repealed. Hiring oversight and related records move inside government.

• Transparency and budgeting

  • Public accounts, the annual government report, ICBC annual reports, and ministry service plan reports must be published by July 31 each year (starting with 2026–27). The budget law is changed so the government can still forecast deficits through 2028–29.

Expenses#

No publicly available information.

Proponents' View#

• Modernizes the tax system by taxing more services, which reflects today’s economy and broadens the base to fund services.
• Encourages investment and jobs in manufacturing and processing through a decade‑long equipment credit, while making key innovation and cultural credits permanent.
• Supports families of children with disabilities and recognizes community volunteers with larger credits.
• Speeds up fiscal transparency with firm July 31 deadlines for public accounts and major reports.
• Targets housing issues by raising taxes on vacant homes and very high‑value properties and by cutting Property Transfer Tax for purpose‑built rentals to boost rental supply.
• Simplifies parts of the film tax credit system and aligns some business tax rules with federal practice.

Opponents' View#

• Adding PST to professional services raises costs for businesses, non‑profits, and consumers, and could make BC less competitive, especially for small firms.
• Raising the lowest tax rate and pausing inflation indexing from 2027 to 2030 can increase taxes on low‑ and middle‑income earners over time.
• Removing the higher Home Owner Grant for northern and rural areas may hurt households in places with colder climates and higher heating and travel costs.
• Dissolving the independent Merit Commissioner and repealing some audit/review powers may weaken impartial oversight of public‑service hiring and dismissals.
• Higher Speculation and Vacancy Tax rates and fewer appeal options may create fairness concerns or make it harder to resolve errors.
• Allowing more years of forecast deficits could reduce fiscal discipline, while new credits and exemptions add complexity and uncertainty about long‑term revenues.