B.C. is facing a projected $11.6-billion deficit this year, with additional annual shortfalls of roughly $12-billion projected over the government’s three-year fiscal outlook. Employment growth has stalled, unemployment has risen to a four-year high of 6.4%, and GDP per capita fell nearly 2% in 2024, the steepest decline in Canada. Small business confidence remains among the lowest in the country, and nearly 60,000 British Columbians have left the province over the past year, taking skills, investment, and entrepreneurial energy with them.
Budget 2026 is a critical opportunity to rebuild business confidence and improve small businesses investment, growth, and competition.
To achieve those goals, CFIB is calling on the province to take action, as outlined in CFIB’s recent letter to Premier David Eby on B.C.’s competitiveness:
Exempt all capital investment from the Provincial Sales Tax (PST).
B.C. has the highest marginal effective tax rate on new capital investment in Canada, putting local businesses at a clear disadvantage. Removing PST from machinery, equipment and other capital inputs would support productivity, encourage long-term investment, and help workers earn more. To provide certainty, this exemption should be permanent, even if phased in gradually.
Establish a credible plan to cut the deficit
CFIB is calling on the government to cut the deficit in half within three years and return taxpayer-supported debt to sustainable levels. Without a clear path forward, businesses are left expecting future tax increases, further undermining confidence and investment decisions.
Continue eliminating interprovincial trade barriers
Fully implementing the Economic Stabilization (Tariff Response) Act would open new markets for goods and services and reduce unnecessary barriers facing small businesses.
In addition to the measures above, Budget 2026 should also provide greater certainty for small businesses. That includes protecting private property rights, being transparent about land-use decisions, and ensuring labour, tax, and environmental policies support private-sector investment. B.C.’s high top marginal personal income tax rate also makes it harder to attract and keep highly skilled workers that small businesses rely on to grow and innovate.
CFIB will continue to advocate for practical, evidence-based solutions that restore confidence and make British Columbia a more competitive place to do business. Small businesses are strongest when they speak with one voice. Join CFIB today and help ensure small business priorities remain front and centre in B.C.’s economic future.
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