Surrey & White Rock Board of Trade (SWRBOT) CEO Joslyn Young and Policy & Media Advisor Aman Parmar were in Victoria to attend the provincial Budget lock-up to review the government’s 2026 fiscal plan ahead of its release to the public. Below is an overview of the highlights of the budget and our comments.
Economic Outlook and Fiscal Plan
The 2026 provincial budget, described by Minister of Finance Brenda Bailey as one that “protects the economy,” projects a $13.3 billion deficit – the largest in British Columbia’s history. The provincial debt is projected to total $154 billion by the end of the 2025-26 fiscal year and $234.5 billion in 2028-29.
Despite tax increases and plans to reduce the public service by 15,000 positions, the deficit continues to grow, creating uncertainty for investors and employers. The province attributes rising debt levels to an uncertain trade environment, slower population growth resulting from federal immigration policy changes, and increased demand for public services.
“Businesses in Surrey and White Rock are already managing rising costs, labour shortages, and infrastructure gaps,” said SWRBOT CEO Joslyn Young. “While we welcome continued investments in health care, training, and public safety, rising taxation and slowing capital delivery add uncertainty. Our region needs predictable operating conditions and a clear path to fiscal sustainability to support investment and growth.”
While deficits are projected to gradually decline over the next three fiscal years, the debt-to-GDP ratio is expected to rise to 37.4%, up 11.3 points from 2025-26. A higher ratio increases borrowing costs and investor risk, affecting employers planning expansions. BC’s economy is projected to grow modestly – 1.3% in 2026 and 1.8% in 2027, but debt accumulation continues to outpace economic growth.
Tax Changes and Business Operating Costs
Budget 2026 introduces multiple revenue measures that will increase operating costs for businesses, particularly in the construction, professional services, real estate, and technology sectors:
- For the first time since 2008, there will be a universal tax raise. The lowest personal income tax bracket will increase from 5.06% to 5.60%. This increase is offset by the increase in the tax reduction credit by $115 to $690 for individuals earning up to $44,952.
- Effective October 1, 2026, Provincial Sales Tax (PST) will now apply to professional services previously exempt, including accounting, bookkeeping, engineering, geoscience, rental property, and strata management. Affected businesses will be required to register, collect, and remit PST. For architectural, engineering, and geoscience services, PST will apply to 30 percent of the purchase price. This change alone is projected to raise over $1 billion annually by 2028, increasing compliance and service costs.
- Also, effective October 1, 2026, PST exemptions for clothing patterns, basic cable, and landline services will be eliminated.
- Effective 2027, the Speculation and Vacancy Tax (SVT) will increase from 3% to 4%.
- Also, effective 2027, the Additional School Tax Rate will increase from 0.2% to 0.3% for property values between $3-4 million, and from 0.4% to 0.6% for property values above $4 million.
- While corporate income tax rates remain unchanged, the cumulative effect of rising PST costs, wage pressures, and commercial property expenses continues to weigh on business confidence.
Rising operating costs may reduce hiring capacity, limit expansion plans, and affect profitability. For professional services, construction, and real estate firms, these changes represent a significant additional financial and time burden.
Opportunities for Investment
- A new temporary Manufacturing and Investment Tax Credit has been introduced for Canadian-controlled corporations who invest in buildings, machinery, and equipment used in manufacturing. The tax credit is 15% on the first $2 million invested for a maximum credit of $300,000.
- There is a provincial commitment to consult and explore a Patent Box.
These measures provide investment incentives, though they are limited compared to broader operating cost pressures.
Infrastructure and Capital Investments
The government highlighted a cautious capital plan, noting that some projects may face slower timelines due to fiscal constraints. While the Surrey–Langley SkyTrain remains a flagship project, no new major transit expansions south of the Fraser were announced.
Locally, the region will see previously announced significant projects, including:
- $38 million in capital investments across 17 projects, including hospital and acute care upgrades, transit and highway infrastructure, expanded K–12 resources, and student housing.
- $2.9 billion for the new 168-bed hospital and integrated cancer care centre in Cloverdale.
- $521 million to construct the permanent School of Medicine at Simon Fraser University in Surrey, with completion expected in 2030.
- $143 million to build a 358-bed student housing facility at Kwantlen Polytechnic University, with completion expected in 2030.
Additional provincial investments over the next three fiscal years:
- $2.8B: Healthcare facilities, hiring doctors, nurses, and healthcare staff, and supporting mental health and addictions treatment
- $400M: Strategic Investments Special Account to leverage federal partnerships for job creation and economic growth
- $330M: Affordable childcare programs
- $283M: Skills and workforce training, doubling apprenticeship seats, improving post-secondary/industry partnerships
- $139M: Community safety initiatives
- $40M: Permitting improvements for natural resource projects
While these investments address critical needs, delays or gaps in transit, roads, and goods-movement corridors increase congestion, limit workforce access, and heighten development risks, particularly for rapidly growing Surrey.
Crime and Community Safety
SWRBOT acknowledges the province’s sustained focus on public safety and extortion-related crime. The budget funds the new $16 million Chronic Property Offending Intervention Initiative, along with $24 million to continue the Special Investigation and Targeted Enforcement programs to provide critical supports for businesses facing rising vandalism, property crime, and repeat offending.
These measures will support safer business operations and address some labour shortages, but more coordinated action is needed to keep pace with our region’s rapid growth.
“Businesses in our region need predictable taxation, timely infrastructure delivery, and a clear path to fiscal sustainability,” said Joslyn Young. “These factors are essential to maintaining competitiveness, attracting investment, and supporting growth for Surrey and White Rock.”
To learn more, read the full budget and fiscal plan here: bcbudget.gov.bc.ca/2026
