BC Budget Update

British Columbia’s 2026 budget delivers mostly concerning news for the construction sector. Although the Budget does include the province’s previously-announced commitment of $241 million in additional funding to training skilled tradespeople, there is little else that will help our industry.

The most impactful change announced in today’s budget for the construction industry is the reduction in the province’s capital plan. The government has identified eight projects, including Phase 2 of the Burnaby Hospital Redevelopment, a student housing project at UVic, and a number of long-term care facilities, that were previously approved but will no longer proceed on their previous timelines. The projects have an estimated total cost of $3.42 billion.

Overall, BC will continue to have significant capital spending over the next three years estimated at nearly $53 billion. The 2026 budget includes $1.1 billion in funding increases for core services, including healthcare, K-12 education, and childcare.

The most common question facing the BC Government as it approached the 2026 provincial budget was how it would address the large annual deficits and the province’s rapidly growing debt. Although the updated forecast for the current fiscal year now predicts a reduced deficit of approximately $9.6 billion, the government intends to run deficits of $13.3 billion, $12.2 billion and $11.4 billion in the next three years. BC’s total debt is projected to grow from $154 billion today to nearly $235 billion by 2028/29.

The province will begin charging PST on a number of professional services that will impact the construction industry, including accounting and bookkeeping, architectural services and engineering services. Land lines will also now have PST applied to them. These PST changes take effect on October 1, 2026.

The Government is increasing the lowest personal income tax rate from 5.06% to 5.60%, which it projects will generate about half a billion dollars annually. It also plans on freezing tax brackets in a move that will increase revenues to the province by more than $500 million in the third year of the fiscal plan.