BC budget will see tax hikes for those with low incomes to offset deficits

As the BC government enters a new legislative session, Budget 2026 has been revealed to show British Columbians what the coming year has in store. 

According to the Province, this year’s budget focuses on safeguarding services, boosting skills training and reducing deficits. 

Minister of Finance Brenda Bailey presented the fiscal plan to her colleagues and fellow legislators on Tuesday, February 17th, highlighting what the BC NDP-led government has been able to accomplish since 2017. 

“Over the past eight years, we have built schools, hospitals and invested in the services British Columbians rely on every day,” said Brenda Bailey, Minister of Finance. 

“Our investments have allowed us to enter these uncertain times from a position of strength, but we need to be realistic about the difficult financial situation we face as a province. We are choosing to safeguard what we’ve built, while growing our economy to secure good jobs and economic prosperity for people and families.”

Though there are many investments in Budget 2026, the fiscal plan also details job cuts in the public sector and a tax increase for those with low incomes. 

Furthermore, BC’s total debt is set to increase by around $81 billion in the next three years alone. 

Income tax increases

Income tax rates are being lifted for those who make the least in this Budget 2026 announcement. 

Those who make between $0 and $50,363 will be taxed at a rate of 5.60% as compared to last year’s rate of 5.06% for the same tax bracket. This will affect around 60% of British Columbians. 

Meanwhile, no other tax bracket has their tax rate increase, including the highest income bracket for those who make over $265,545. This bracket will be taxed at a rate of 20.50%, same as in 2025. 

“We are making careful choices to secure BC’s future,” said Bailey. 

“We are updating the tax system to raise revenue and prevent cuts to critical services, while keeping BC one of the lowest-taxed provinces for working and middle-class families. At the same time, we are reducing government spending and carefully repacing our capital plan to deliver services and infrastructure more efficiently.”

Deficits and debt

Budget 2026 plans for the decline in deficits. 

The goal is to bring deficits down from $13.3 billion in 2026 to $11.4 billion by the 2028-29 fiscal year. 

The Province plans to achieve this by conducting efficiency reviews, restricting hiring and changing program and service delivery. 

However, those deficits are still adding to BC’s total debt, which is projected to increase from $154 billion to $235 billion over the next three years. 

The budget also calls for the reduction of around 15,000 public sector jobs over the next three years. 

The Province sees these as “realistic choices” that will raise revenue and safeguard critical services at a time of financial struggles and global uncertainty. 

The cuts to public sector jobs are being touted as an effort to make the system “more efficient.”

Industry-driven investments

According to the Province, Budget 2026 seeks to open doors to those seeking training for good-paying jobs. 

For those looking to get into the trades, $283 million over three years will be invested to expand spaces for in-demand trades training programs, increase per-seat funding to training centres and enhance grants to double apprenticeship seats by 2028. 

A Manufacturing and Processing Investment Tax Credit will be introduced to help manufacturers move into new buildings or acquire new equipment. 

Furthermore, $400 million is being allocated to support collaborative opportunities and major projects that are spearheaded by the federal government. 

For BC’’s maritime sector, Budget 2026 looks to extend the Shipbuilding and Ship Repair Industry Tax Credit until the end of 2027.

Health-care and children

Roughly $5.1 billion in funding will be going towards strengthening healthcare, kindergarten to Grade 12 (K-12) education and supports for people who need care and assistance.

Some of that $5.1 billion will continue to go towards recruiting and training more health-care doctors, nurses and long-term care support workers.

The Province has earmarked a new investment of $131 million for intensive, specialized mental-health and addictions treatment. This funding is specifically meant for people with concurrent challenges of complex mental illness, addictions and acquired brain injuries. 

Of note, a portion of this $131 million will fund involuntary treatment beds in Prince George, Maple Ridge and Surrey.

For educational matters, $634 million over three years will go to K-12 education over three years, including a $167-million investment in the Classroom Enhancement Fund. This fund will help recruit and retain more teachers, with a focus on special-education teachers, teacher psychologists and counsellors.

ChildCareBC investments are being increased by $330 million to maintain lower fees and provide support to operators and educators. This endeavour will see the popular $10-a-day child care model abandoned. 

Budget 2026 will also provide $25 million to the expansion of child care options on school grounds.

To help continue construction on new hospitals and schools, $38 billion will be invested over three years. This funding will go to 17 major hospitals and acute care facilities projects, 66 K-12 school additions/improvements as well as transit and transportation expansions.

Crime and justice

For crime prevention, Budget 2026 is providing $139 million over three years to reduce repeat, violent offending and chronic property crime. 

This funding will include $73 million to support court operations, including sheriff recruitment and retention, Crown counsel, the judiciary, legal aid and the BC Prosecution Service. 

Additionally, $16 million for the new Chronic Property Offending Intervention Initiative meant to deter crimes such as vandalism and shoplifting that are hurting businesses. 

Then $26 million is going towards the Repeat Violent Offending Intervention Initiative and $24 million is for the continuation of the Special Investigation and Targeted Enforcement program and the Community Safety and Targeted Enforcement program. 

Critiques of Budget 2026

After the fiscal plan was released, many were quick to speak out against what it means for British Columbians. 

The BC Conservatives, who are the BC NDP’s official Opposition, pointed to the tax increase on low income households as something that will have a significant impact on the majority of BC residents. 

“The NDP have turned their back on the people working hardest to make ends meet and the seniors who built this province,” said Peter Milobar, BC Conservative finance critic. 

Milobar noted that the income tax increase is piling new costs onto households that are already struggling with affordability.

The BC Greens’ leader Emily Lowan also spoke out against Budget 2026. 

“The BC NDP has chosen the broken status quo,” said Lowan. 

“This budget raises taxes on working people, abandons $10-a-day childcare, and puts thousands of public servants out of work.” 

Lowan would like to see Premier Eby tax billionaires and the top 1% more, rather than putting the burden of BC’s deficits on the lowest paid British Columbians.