CPABC: B.C.’s Budget 2026 features a widening deficit, prioritizes core services
VANCOUVER, British Columbia, Feb. 18, 2026 (GLOBE NEWSWIRE) -- Against the backdrop of ongoing economic uncertainty and a volatile international trade environment, Budget 2026 maintains a strong focus on essential public services, while also introducing measures intended to draw further capital investment to the province and support economic growth. At the same time, the scale of the tax increases and an expanding deficit present both immediate and longer-term challenges.
“Much like last year, new programs are limited in the Budget, which was expected given our province’s fiscal position,” said Lori Mathison, FCPA, LLB, president and CEO of CPABC.
The Budget includes a temporary 15 per cent Manufacturing and Processing Investment Tax Credit for business investment in buildings, machinery and equipment. The government also introduced a $400 million Strategic Investment Special Account to help attract investment in clean energy and resource development to the province.
However, the introduction of a series of tax increases will impact most taxpayers. For example, the government announced changes to the Provincial Sales Tax, notably the expansion of the tax to some professional services, including accounting services such as audit and filing a tax return.
“We see the opportunity for the Manufacturing and Processing Investment tax credit to incent investment in the province,” continued Mathison. “However, expanding the PST base is a surprise. There remains a need to consider PST reform, or at least more extensive PST input tax credits, to ensure that the PST does not distort investment decisions.”
Budget 2026 earmarks nearly $13.7 billion in taxpayer-supported capital spending for 2026/27, up 9.6 per cent from 2025/26. The government plans to maintain investment in health care while increasing transportation infrastructure spending, both of which have increased dramatically over the last five years.
"This capital spending plan aims to improve the delivery of services to British Columbians,” continued Mathison. “We acknowledge the efforts to reassess the pace of the capital plan in response to significant budget pressures.”
Following a record deficit in 2025/26, estimated at $9.6 billion, the deficit will increase to $13.3 billion in 2026/27. This represents an expected deficit of 2.9 per cent of GDP, up from 2.2 per cent in 2025/26. B.C.’s taxpayer-supported debt-to-GDP ratio is projected to grow over the three-year fiscal plan, from the latest estimate of 26.1 per cent for 2025/26 to 37.4 per cent by 2028/29.
“CPABC has routinely encouraged the B.C. government to adopt a long-term fiscal anchor to ensure the province remains well-equipped to manage both current and future challenges,” concluded Mathison. “It is essential to prioritize prudent fiscal management while also working to achieve sustainable business growth across the province.”
About CPA British Columbia
The Chartered Professional Accountants of British Columbia (CPABC) is the training, governing, and regulatory body for over 40,000 CPA members and 6,000 CPA candidates and students. CPABC carries out its primary mission to protect the public by enforcing the highest professional and ethical standards and contributing to the advancement of public policy.
CPABC Media Contact: Jack Blackwell, Economist 604.259.1143 news@bccpa.ca
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