Budget secures B.C.’s future, protects critical services

Press Release

Feb. 17, 2026

VICTORIA

Summary

• Budget 2026 safeguards critical services for the long term
• The fiscal plan boosts skills training to strengthen B.C.’s economic security
• Budget 2026 forecasts declining deficits beginning in the 2026-27 fiscal year

In a world of ongoing and heightened economic uncertainty, Budget 2026 makes careful choices to protect what matters most to British Columbians through investments to protect services, such as health care, education and social supports, while securing B.C.’s future through skills training and targeted investments to spur economic growth.

“Over the past eight years, we have built schools, hospitals and invested in the services British Columbians rely on every day,” said Brenda Bailey, Minister of Finance. “Our investments have allowed us to enter these uncertain times from a position of strength, but we need to be realistic about the difficult financial situation we face as a province. We are choosing to safeguard what we’ve built, while growing our economy to secure good jobs and economic prosperity for people and families.”

Budget 2026 opens the door further for people to train for good-paying careers in the skilled trades through $283 million in new funding over three years. This will expand spaces for in-demand trades training programs, increase per-seat funding to training centres, and enhance the B.C. Employer Training Grant to double apprenticeship seats by 2028-29.

A new $400-million British Columbia strategic investment fund will help B.C. invest quickly in collaborative opportunities and major projects as the federal government invests in Canada’s sovereignty.

Budget 2026 supports businesses to leverage new opportunities through a new temporary Manufacturing and Processing Investment Tax Credit for investing in new buildings, machinery and equipment.

To support B.C.’s maritime sector, which is the largest in Canada, Budget 2026 extends the Shipbuilding and Ship Repair Industry Tax Credit until the end of 2027.

Safeguarding what matters most in turbulent times

Budget 2026 protects the most critical services that people rely on every day through $5.1 billion in funding to strengthen health care, K-12 education and supports for people who need care and assistance.

This includes funding to recruit and train more health-care professionals, such as doctors, nurses, and long-term care support workers in communities across B.C.

Budget 2026 includes $634 million in new funding for K-12 education over three years, including a $167-million investment in the Classroom Enhancement Fund, which will result in more teachers for everyone, as well as special-education teachers and teacher psychologists and counsellors.

New investments of $131 million will support intensive, specialized mental-health and addictions treatment for people with concurrent challenges of complex mental illness, addictions and acquired brain injuries. It will also fund involuntary treatment beds in Prince George, Maple Ridge and Surrey.

A new $330-million lift to ChildCareBC will protect the child care services families rely on by maintaining lower fees, and the spaces and support for operators and educators achieved over the past eight years. Budget 2026 also provides $25 million in new funding to support the expansion of child care options on school grounds.

With $475 million in new funding for children and youth with disabilities, families will get direct funding for support services and better access to more service providers in their communities.

Budget 2026 provides $139 million in funding over three years to reduce repeat, violent offending and chronic property crime, and support timely access to justice.

Making disciplined spending choices to reduce spending and increase revenue

Government has exceeded initial targets set in Budget 2025 for expenditure management through operational and program savings. Budget 2026 continues that work by introducing targets to reduce the size of the public sector, and generates new revenue over the three-year fiscal plan.

“We are making careful choices to secure B.C.’s future,” Bailey said. “We are updating the tax system to raise revenue and prevent cuts to critical services, while keeping B.C. one of the lowest-taxed provinces for working and middle-class families. At the same time, we are reducing government spending and carefully repacing our capital plan to deliver services and infrastructure more efficiently.”

To improve B.C.’s fiscal outlook and raise revenues to protect critical services, Budget 2026 increases the tax rate of the first income-tax bracket by less than 0.6 percentage points. The average increase will be $76 in 2026, and more than 40% of taxpayers will see savings when combined with an increase to the B.C. Tax Reduction Credit. The credit offsets the tax change for British Columbians with lower incomes.

British Columbians with middle incomes will continue to have some of the lowest taxes in the country, and government funding continues to help people with costs through measures such as the BC Family Benefit, more affordable child care and lower car insurance.

Budget 2026 also increases the speculation tax for foreign owners and untaxed worldwide earners, as well as taxes on luxury homes worth more than $3 million through changes to the Additional School Tax.

Deficits are projected to decline over the fiscal plan from $13.3 billion in 2026-27 to $11.4 billion in 2028-29 as government continues to achieve its targets through the efficiency review, hiring restrictions, and streamlining program and service delivery. B.C.’s deficit-to-GDP ratio is projected to decline from 2.9% in 2026-27 to 2.3% in 2028-29.

B.C.’s debt-to-GDP ratio is among the best in Canada and remains affordable relative to provincial peers, even as the Province works to bring it down.

A sustainable capital plan

The Province is continuing to build infrastructure to create jobs and meet the needs of British Columbians. Over the next three years, government will make nearly $38 billion worth of taxpayer-supported investment to continue construction on 17 major hospitals and acute care facilities, 66 K-12 school additions and improvements, and important transit and transportation expansions.

After years of building infrastructure to close gaps and strengthen services, B.C. is adjusting the pace of the capital plan to make sure it is sustainable over the long term.

Budget 2026 makes realistic choices to raise revenue and safeguard critical services amid a time of financial challenges and global uncertainty, while making the public sector more efficient to ensure more dollars reach the front lines.

Learn More:

• Read the 2026 Budget and Fiscal Plan: https://www.bcbudget.gov.bc.ca/
• To learn more about Look West: Jobs and Prosperity for a Stronger BC and Canada, visit: https://gov.bc.ca/LookWest/
• To learn more about how B.C. is building a strong economy, visit: https://www2.gov.bc.ca/gov/content/employment-business/strong-economy

Four backgrounders follow.

Contact:
Ministry of Finance
Media Relations
250-893-1202

BACKGROUNDER 1

Safeguarding critical services

Budget 2026 protects critical services, such as health care and education, and makes new investments to support people who need care and assistance.

Supporting child care and K-12 education

• Budget 2026 includes $634 million in new funding for teachers, student services, and to support inclusive learning as the number of inclusive learning students enrolled is on the rise.
  • A $167-million investment in the Classroom Enhancement Fund will result in more teachers for everyone, as well as special education teachers and teacher psychologists and counsellors.
• Another $3.9 billion in capital funding is allocated for seismic replacements and upgrades, as well as projects to address enrolment growth in B.C.’s fastest-growing communities.
• Budget 2026 provides a $330-million lift to ChildCareBC to stabilize the programs and services that families rely on as government works to modernize B.C.’s child care system.
  • This stabilization is critical as provinces and territories continue negotiations with the federal government to drive flexibility and resilience across the system.
  • This funding will maintain lower fees, and the spaces and support for operators and educators achieved over the past eight years.
• During this stabilization period, the Province will work to bring more equity into the system. After hearing from operators that current funding models limit their flexibility to support high-quality, inclusive care, the Province will pause enrolment of new providers into the Operating Funding Model and the $10 a Day ChildCareBC program during this stabilization period. Families and providers currently in the $10-a-day program will see no changes.
• In fall 2025, the Province took steps to expand child care on school grounds, recognizing that schools are community hubs for families and could play a bigger role in offering child care.
• As the Province continues onboarding the remaining funded New Spaces Fund projects (11,800 spaces), government intends to shift to expanding before- and after-school care.
• Budget 2026 provides $25 million to be used to expand child care on school grounds:
  • $5 million in initial capital funding from the Ministry of Infrastructure
  • $20 million in operating funding over three years from the Ministry of Education and Child Care

Strengthening health care services

• Budget 2026 invests $2.8 billion in new funding for the health-care system over three years, including:
  • $2.3 billion to increase health system capacity and support a growing need for services, including supporting hiring more doctors, nurses and health-care workers, and the planning, development and operation of new and expanded hospitals and health-care facilities throughout the province
  • $131 million for intensive mental-health and addictions treatment, including increasing spaces for those who need involuntary care
  • $34 million annually to provide access to in-vitro fertilization for almost 1,800 B.C. families
• As part of the Province’s work to secure outside funding, $447 million in federal contributions will help support health services for seniors, including outside-of-hospital treatment for complex medical conditions and improving the safety and quality of long-term care facilities.
• Another $653 million in federal funding will expand public coverage to include free medications for diabetes and enhanced coverage for menopausal hormone therapy.

Help for children and youth with disabilities

• Investment of $475 million will build a more flexible, streamlined and equitable system that is better aligned with the needs of children and youth.
• Budget 2026 invests in three priority areas:
  • The new BC Children and Youth Disability Benefit will provide direct funding for approximately 12,000 families of children with significant disabilities who require higher and individualized support.
  • The new BC Children and Youth Disability Supplement will offer as much as $6,000 per year to ease financial pressures on low- and middle-income families raising a child with a disability.
  • All families will benefit from a 40% expansion in community-based services, including increased behavioural and mental-health supports.

Safer communities

• The Province has been taking action on all fronts – enforcement, housing, health and justice – to stop the cycle of crime and get people the help they need to make B.C. communities stronger and safer for everyone.
• Budget 2026 provides $139 million more over three years to reduce repeat, violent offending and chronic property crime, and support timely access to justice. This includes:
  • $73 million to continue to improve access to the justice system and support court operations, including sheriff recruitment and retention, Crown counsel, the judiciary, legal aid, and the BC Prosecution Service
  • $16 million for the new Chronic Property Offending Intervention Initiative that strengthens monitoring and enforcement for crimes, such as vandalism and shoplifting that are hurting businesses
  • $26 million for the Repeat Violent Offending Intervention Initiative for which early evaluations show the program is resulting in significantly fewer police interactions and faster charge approvals for high-risk violent offenders
  • $24 million for the continuation of the Special Investigation and Targeted Enforcement program, and the Community Safety and Targeted Enforcement program, both of which provide valuable resources to police to combat repeat violent offending and address street disorder, and to connect individuals to community services
• The Province will continue to support the fight against extortion, including through the BC Extortion Task Force, which brings municipal, provincial and federal agencies together on intelligence sharing and investigations. The Province has secured federal support for more police officers, increased RCMP helicopter resources, and national co-ordination of efforts to combat extortion.

Contact:
Ministry of Finance
Media Relations
250-893-1202

BACKGROUNDER 2

Investing in B.C.’s future

Budget 2026 charts a path toward economic security by speeding up major projects, attracting federal and private investments, advancing innovation, and increasing access to trades training opportunities for British Columbians.

Creating more opportunities for skills training

Budget 2026 opens the door for more British Columbians to be trained for in-demand skilled trades, getting good, family-supporting jobs needed to help B.C. become Canada’s economic engine. A total of $283 million in funding includes:

• $241 million to double skilled trades funding over three years
• $12 million over three years to enhance the employer training grant, helping double apprenticeship seats by 2028-29
• $30 million to train highly qualified professionals by adding specialized streams to existing programs, including engineering, geology, computer science, biology and aerospace

Attracting federal and private-sector investment

A new $400-million British Columbia Strategic Investments Special Account will enable B.C. to quickly take advantage of opportunities to work with the federal government as it invests billions of dollars to defend Canada’s sovereignty, creating jobs and economic opportunities. The special account will help the Province attract investments that leverage B.C.’s strength in sectors, such as clean energy, sustainable forestry manufacturing, responsible mining and clean technology.

This special account will allow the Province to directly participate in the revenue growth of B.C. businesses through direct investments, equity and loans to support private-sector growth and good jobs for British Columbians.

Streamlining permitting, investing in natural resources

Budget 2026 invests more than $40 million over three years to remove barriers and avoid duplication in permitting across the natural-resource and tourism sectors. This funding will build on efficiencies already created, including:

• almost 35% more exploration permits issued in 2025 than in 2024
• reducing timelines for major mines applications by 35% since 2019
• record-breaking investments of more than $750 million in mining exploration

To help the forestry sector through sustained international tariffs, decreased fibre supply and higher labour costs, the Province is making immediate new investments to support sector stability, protect jobs and help communities adapt through $50 million in new provincial funding and reallocated federal funding for:

• an immediate investment of $15 million to be released to key organizations in 2025-26:
  • $5 million for the First Nations Forestry Council to continue the Indigenous Forestry Scholarship program and support First Nations’ participation in the forest sector
  • $5 million for the Wildfire Reduction Equipment Support Trust to help logging contractors buy specialized equipment needed to recover fibre that can be processed into marketable products
  • $5 million for the Forestry Service Providers Compensation Fund to provide relief to contractors left unpaid for their services in the event of a tenure holder’s insolvency
• The Province is also investing $15 million in 2025-26 to recapitalize the FireSmart Community Funding and Supports program, helping approximately 75 more local governments and First Nations strengthen wildfire resilience through training, equipment, bylaw updates and home-hardening measures.
• B.C. is also allocating $20 million in federal funding to the Northern Development Initiative Trust in 2025-26 to help employers and workers in both the forestry and steel industries. This support builds on existing services offered through WorkBC to ensure workers have access to the employment assistance they need.

To provide immediate cash flow relief to tenure holders, the Province is introducing a temporary Stumpage Payment Deferral Program, effective from Jan. 1, 2026, until Nov. 30, 2026.

Supporting business investment

B.C. has made significant investments in supporting businesses and productivity. Budget 2026 includes a new, temporary 15% Manufacturing and Processing Investment Refundable Tax Credit for businesses investing in buildings, machinery and equipment used in manufacturing and processing. This measure will help businesses become more productive and competitive and help boost B.C.’s manufacturing sector.

Budget 2026 extends the Shipbuilding and Ship Repair Industry Tax Credit until the end of 2027 to continue supporting B.C.’s maritime sector, which is the largest in Canada.

Government is announcing plans to work with industry and the federal government on examining the suitability of adopting a “patent box” regime in B.C. A patent box regime could provide a reduced tax rate on income made from intellectual property in B.C.

Contact:
Ministry of Finance
Media Relations
250-893-1202

BACKGROUNDER 3

Updating the tax system while managing government expenses

Global economic uncertainty, slowing growth and high costs are putting pressure on public finances. Budget 2026 makes disciplined choices about constraining government spending and raising revenue to strengthen B.C.’s fiscal outlook, protect critical services, invest in industries and workers, and keep B.C. one of the lowest tax provinces for working families.

Updating B.C.’s tax system

Taxes make up the largest share of provincial revenue used to fund critical services in B.C. Government introduces changes to the tax system to protect core services from cuts through Budget 2026:

• Increasing the tax rate of the first income tax bracket by less than 0.6 percentage points, from 5.06% to 5.60%.
• This means an additional $76 in income taxes for the average taxpayer in 2026.
  • However, more than 40% of taxpayers will see savings when combined with the increase in B.C. tax reduction credit.
  • B.C. will also pause tax bracket indexing from 2027 until 2030.
• Increasing the Speculation and Vacancy Tax rate for foreign owners and untaxed worldwide earners to 4% for the 2027 tax year, up from the current 3%.
• B.C. is increasing the Additional School Tax rates from 0.2% to 0.3% for property values between $3 million and $4 million, and from 0.4% to 0.6% for property values above $4 million, effective for the 2027 tax year.
• Expanding B.C.’s PST tax base to include professional services, such as accounting and bookkeeping, architectural, geoscientist and engineering services, commercial real-estate fees and security and private investigation services.
  • This change generally aligns B.C. with how other provinces apply sales taxes to these services.
• Removing PST exemptions for some goods and services that were once deemed essential, but are not as commonly used anymore, such as clothing repair materials, services related to clothing and footwear, basic cable television and land-line telephone services.
  • Expanding the tax to these services is generally consistent with how tax applies to these services in most provinces.
• Adding a new temporary 15% manufacturing and processing investment refundable tax credit for businesses investing in buildings, machinery and equipment used in manufacturing and processing.
• Extending the Shipbuilding and Ship Repair Industry Tax Credit until the end of 2027.
• Changing the interest rate structure for the Property Tax Deferment Program from simple to compound and adopting a prime-plus-2% rate for new loans.

Strategically sequencing the capital plan

• Budget 2026 invests in the infrastructure people and communities need, including hospitals, schools and transit.
• The fiscal plan includes nearly $38 billion in capital projects:
  • 17 major hospitals and acute-care facilities in communities including Vancouver, Surrey, Duncan, Kamloops and Williams Lake
  • important transit expansions, such as the Broadway Subway project and Surrey Langley Skytrain
  • 66 major K-12 school additions and improvements in communities including Mission, Prince Rupert and Langley
  • student housing projects that will add 3,900 new beds in post-secondary facilities in communities like Nanaimo and New Westminster
  • the first new medical school in Western Canada in nearly 60 years in Surrey
• Right now, there are added fiscal pressures on government finances. To mitigate construction cost escalation and maintain a competitive debt-to-GDP, the Province is adjusting the pace of the capital plan to continue building the schools, hospitals, and transit people need in a sustainable way.
• With B.C.’s aging population, government is taking action to deliver beds more efficiently through a review of the long-term infrastructure program to achieve cost efficiencies while maintaining safe, high-quality care for seniors.
• Government is adjusting the timing of delivery for several approved long-term care projects to incorporate the lessons learned from projects already underway and from its ongoing review of the long-term care infrastructure program. The facilities affected include:
  • Abbotsford long-term care
  • Campbell River long-term care
  • Chilliwack long-term care
  • Cottonwoods long-term care replacement (Kelowna)
  • Delta long-term care
  • Fort St. John long-term care
  • Squamish (Hilltop) long-term care
• Two additional projects being repaced are:
  • Phase 2 of the Burnaby Hospital and Cancer Care, as government refreshes plans to ensure the project meets the needs of the community
  • University of Victoria student housing expansion
• Government is adjusting the pace of some housing investments. This includes reallocating nearly $1.4 billion across the fiscal plan.

Making government more efficient

Government is continuing to increase efficiency and streamline programs to make sure service delivery is efficient, effective and affordable over the long term.

As part of its commitment to expenditure management targets announced at Budget 2025, government has reduced spending by $400 million for 2025-26 through staffing adjustments, hiring restrictions, and reducing discretionary spending by reviewing travel, consulting contracts, office and business expenses.

To continue that commitment to cost savings, Budget 2026 includes an estimated savings of $3.5 billion through expenditure management over the course of the fiscal plan. These will be achieved by continuing the measures taken in 2025-26, as well as through recalibrating program delivery and reviewing funding allocations.

In addition, government is introducing a commitment to reduce the size of the public sector by 15,000 full-time-equivalent positions (FTEs) over the three-year fiscal plan, while protecting front-line services and recognizing that some sectors, such as health and education, will continue to need to hire critical front-line positions. The public sector includes organizations outside of core government ministries, such as Crown corporations, school districts, post-secondary institutions and health authorities.

As part of the reductions in the public sector, government will be developing specific targets to reduce the number of executive positions, with a focus on Crown corporations and the health sector. The Province aims to reduce the size of BC Public Service, which is made up of employees working for core government ministries, by 2,500 FTEs by the end of the fiscal plan. These reductions will be achieved largely through attrition and voluntary departures. Additional measures, such as early retirement and voluntary severance incentives, may be used to help support the transition to a smaller, more efficient public service.

Contact:
Ministry of Finance
Media Relations
250-893-1202

BACKGROUNDER 4

Fiscal plan 2026-27 to 2028-29

Budget 2026 is built on disciplined choices to protect critical services and make targeted investments to grow B.C.’s economy, while improving the long-term fiscal outlook.

In uncertain economic times, Budget 2026 seeks to future-proof the economy by training more people for good jobs, attracting private and federal investment and advance innovation.

The budget aims to raise revenues for government through changes in taxation, while making programs more efficient, and reducing expenditures and protecting services people rely on.

Budget 2026 introduces a repacing of the capital plan after eight years of rapid construction, ensuring its sustainability for the long term.

Economic outlook

B.C. is expected to see slow to moderate growth in the economy, with real GDP growth projected at 1.3% in 2026 and 1.8% in 2027 due to continued trade uncertainty and impacts from federal government changes to immigration policy. Economic growth is expected to improve over the medium term (2028-2030), averaging 2.1% annually as immigration levels normalize and uncertainty over trade subsides.

Budget outlook

Budget 2026 presents an updated deficit of $9.6 billion for 2025-26, $1.6 billion lower than forecast in the Second Quarterly Report. The improvement is due mainly to higher revenue from corporate and personal income tax and lower spending for refundable tax credits. The 2025-26 fiscal year forecast also benefits from the one-time $2.7-billion tobacco settlement, which reduces the projected deficit.

Budget 2026 projects the following declining deficits over the three-year fiscal plan period:

• $13.3 billion for 2026-27
• $12.2 billion for 2027-28
• $11.4 billion for 2028-29

As a result of these declining deficits, government deficit-to-GDP ratio is declining over the three years, from 2.9% in 2026-27 to 2.3% by 2028-29.

Revenue outlook

Total government revenue is forecast at $85.5 billion in 2026-27, $88.6 billion in 2027-28 and $91.8 billion in 2028-29. Growth is mainly driven by increasing tax revenue, in part due to the new measures being introduced, natural-resources revenue and commercial Crown corporation net income.

The government’s revenue outlook incorporates trade-related uncertainty due to U.S. tariffs.

Expense outlook

Expenses over the three-year fiscal plan are forecast at $98.8 billion in 2026-27, $100.7 billion in 2027-28 and $103.2 billion 2028-29. Investments will help support the critical programs and services people rely on, including health care, supports for children and youth and public safety, as well as increasing opportunities for skills training and securing B.C.’s economic future.

Budget 2026 includes contingencies allocations of $5 billion each year of the fiscal plan to help manage caseload pressures, current collective bargaining mandate costs and other costs that are uncertain at the time of building the budget, such as responding to continued trade uncertainty and emergency response and flood mitigation.

Capital investments

Budget 2026 invests a total of $37.7 billion in taxpayer-supported capital investments over three years, including $13.8 billion to strengthen transit and transportation infrastructure to keep people and goods moving, $11.1 billion to support the construction of new and upgraded health-care facilities and $3.9 billion to build, renovate and seismically upgrade schools.

Self-supported capital spending by commercial Crown corporations is estimated at $15.3 billion over three years, mainly for electricity generation and transmission.

Debt affordability

B.C.’s taxpayer-supported debt is projected to be $116.5 billion at the end of 2025-26, approximately $2.2 billion lower than projected in Budget 2025, due to an improved operating result and lower capital spending. With this lower forecast, debt-to-GDP is now forecast to be 26.1% for 2025-26, down from 26.4% at the end of the second quarter.

Taxpayer-supported debt is expected to increase to $189 billion over the fiscal plan as the Province continues to invest in protecting critical services and building schools, roads, hospitals and transit.

The taxpayer-supported debt-to-GDP ratio, a key metric used by credit rating agencies, is forecast at 30.6% in 2026-27, 34.4% in 2027-28 and 37.4% in 2028-29. B.C.’s net liabilities-to-GDP ratio remains one of the lowest in Canada. It is currently below that of most provinces, including Ontario and Quebec. B.C.’s debt-servicing costs remain at low levels compared to other jurisdictions.

Budget 2026 focuses on strategically sequencing the capital plan, making disciplined choices and targeted investments to reduce the deficit over time, helping to ensure B.C. retains a competitive net liabilities-to-GDP ratios compared to the Province’s peers.

Contact:
Ministry of Finance
Media Relations
250-893-1202

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