B.C. losing ground as other provinces cut small business taxes

Vancouver, May 27, 2026 – British Columbia is falling behind as other provinces move to cut small business taxes, says the Canadian Federation of Independent Business (CFIB). In response, CFIB is calling on the B.C. Government to reduce its Small Business Tax Rate to zero by 2030, raise the small business deduction to $700,000 and index that threshold to inflation.

Other provinces including Ontario, Quebec, and Newfoundland and Labrador have recently moved to lower their small business tax rates, with others expanding deduction thresholds. Manitoba currently has a small business tax rate of zero. In contrast, B.C.’s rate has not been reduced in nearly a decade, leaving businesses at a growing competitive disadvantage to their provincial and U.S. counterparts.

“The cost of doing business in B.C. is already high, and it keeps going up,” said Ryan Mitton, CFIB’s Director of Legislative Affairs for B.C. “Slowly reducing the small business tax rate to zero by 2030 and raising the small business deduction threshold would ease that pressure. By helping SMEs grow and thrive, we can build a stable revenue base for the province and help get the budget back on track.”

The gap comes at a time when conditions for small firms in B.C. remain weak. Businesses are facing a newly expanded PST on professional services, high labour costs, and an uncertain trade environment. With fewer businesses starting or growing, B.C.’s entrepreneurial drought is continuing to weigh on the economy and hampering employment, including for young workers.

“As large multinational corporations get fast-tracked for government benefits, small businesses are being left to fend for themselves,” said Kalith Nanayakkara, CFIB’s Senior Policy Analyst for B.C. “If we want to see more investment and hiring, we need to make it easier for the 98% of businesses in B.C. that are small businesses.”

CFIB's report on Canada’s entrepreneurial drought calls on all governments to take meaningful steps to reduce the tax burden on small businesses, with the long-term goal of bringing it down to zero to restore competitiveness and support business growth.

CFIB is also urging the federal government to lower its small business tax rate, which has remained at 9% since 2019.

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For media enquiries or interviews, please contact:

Kalith Nanayakkara

Kalith.nanayakkara@cfib.ca

About CFIB

The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 103,000 members across every industry and region. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.