NEW AND INCREASED PROVINCIAL TAXES IMPACTING BUSINESS AND ECONOMIC GROWTH (2026)
Issue
Over the past several years, the Government of British Columbia has introduced a number of new taxes and expanded several existing taxes affecting businesses and residents across the province.
While the Chamber recognizes the importance of government revenue to support essential public services, the cumulative impact of multiple taxation measures can negatively affect business competitiveness, economic investment, and long-term economic growth.
Businesses rely on predictable fiscal policy in order to make long-term investment decisions, plan capital expenditures, and expand employment. Frequent or unanticipated tax increases create uncertainty for both employers and investors.
British Columbia’s economic competitiveness is particularly important as the province competes with other Canadian jurisdictions and international markets for capital investment, skilled labour, and business development.
For this reason, transparent taxation policy and meaningful consultation with the business community are critical components of responsible fiscal planning.
Background
Since 2017, the Province of British Columbia has implemented or expanded numerous taxation measures affecting businesses, consumers, and property owners.
Examples include the introduction of the B.C. Employer Health Tax, which replaced Medical Services Plan premiums and generates approximately $2 billion annually in provincial revenue.[1]
Annual increases to the British Columbia Carbon Tax raised the carbon price from $35 per tonne in 2018 to $80 per tonne by 2024[2], generating approximately $2.4 billion annually prior to its elimination in 2025. While the consumer carbon tax was eliminated in April of 2025, the financial impact of that was not quantified. Saying that, the carbon cost to industry continues to increase in the form of addition taxation.
The provincial government has also expanded the Provincial Sales Tax to include additional digital products and services, and most recently expanded PST to several professional services including accounting, engineering, architecture, and security services beginning in 2026.[3]
Housing-related taxation has also increased significantly with the implementation and expansion of the Speculation and Vacancy Tax[4] as well as the introduction of the Residential Property Flipping Tax effective January 1, 2025.[5]
Additional property-related taxation includes increases to the Additional School Tax on residential properties valued above $3 million.[6]
Consumption taxes have also increased through higher Provincial Sales Tax rates applied to luxury passenger vehicles, reaching 20 percent for vehicles valued above $150,000.[7] This includes the purchase of a typical one ton pick up truck.
Other targeted taxation measures implemented or increased during this period include increases to tobacco taxes, cannabis taxes, regional fuel taxes, and parking sales taxes in major metropolitan areas.
Collectively, these and other taxation measures are estimated to generate approximately $6.5 to $7.5 billion annually in additional provincial revenue, representing between $20 billion and $30 billion in cumulative taxation impacts over recent fiscal years.
While these policies may be implemented to achieve specific policy objectives, the cumulative effect of multiple taxation measures can create significant financial pressure on businesses and consumers.
Without a clear and transparent taxation framework, businesses face increasing difficulty forecasting costs, planning investment decisions, and maintaining competitiveness.
Meaningful consultation with business organizations, non-profits, and industry experts can help ensure that future tax policy balances fiscal needs with economic growth.
The Chamber Recommends
That the Provincial Government:
- Strike an independent commission to perform a review of the provincial taxation system in British Columbia with the aim of achieving tax reform, including review of the efficiency and effectiveness of current legislation.