MICHAEL MAGNUSSON
PENTICTON – The Penticton & Wine Country Chamber of Commerce has reviewed the Province’s 2026 Budget, and while there are measures that will benefit our region, the Chamber is very concerned that rising debt levels, limited support for broad-based economic growth, and new cost pressures will reduce British Columbians’ purchasing power and directly impact businesses.
The Chamber is particularly troubled that provincial debt continues to outpace economic growth. Budget documents indicate that debt servicing costs are now approaching the equivalent of half of the Province’s entire annual spending on education.
“When interest payments begin to rival core public services, it signals a structural imbalance that should concern every taxpayer and business owner in British Columbia,” said Jordan Knox, President of the Chamber.
Of additional concern is the Province’s decision to freeze indexation of tax brackets. Without annual inflation adjustments, many British Columbians will gradually move into higher tax brackets despite no real increase in purchasing power, commonly known as bracket creep. This reduces disposable income and limits consumer spending at a time when businesses are already navigating tight margins and many reporting reduced sales.
The expansion of Provincial Sales Tax (PST) also raises alarms. The application of PST to strata management services will likely be passed on to condo and townhouse owners through higher monthly strata fees, increasing housing costs during an affordability crisis. The addition of PST to geoscience and engineering services will also increase construction costs, particularly for high-rise developments, ultimately driving up housing prices in a province already struggling with supply.
Security services, a cost borne by nearly every business operating in high-traffic areas, will also see a 7% increase under the new PST measures. While the Province has committed additional investments toward public safety, it is disappointing that businesses will now be taxed on the very measures they are forced to implement to protect their staff, customers, and property. Many of these costs stem from ongoing challenges related to mental health, addiction, and homelessness that continue to impact commercial areas and public confidence. At a time when businesses are already absorbing significant expenses to maintain safe environments, further tax pressure on security services sends the wrong signal to the small and medium-sized enterprises working hard to support their communities.
The Chamber does, however, welcome the introduction of a 15% refundable tax credit for manufacturing investments. Eligible expenditures relating to land and buildings, machinery, and equipment, and the inclusion of beer, wine, and food processing within the definition of manufacturing, are particularly important for Penticton and the broader South Okanagan economy, where value-added agriculture and beverage production are key economic drivers.
Overall, the Chamber urges the Province to build on pro-investment measures while reconsidering policies that dampen private sector growth and increase operating costs for businesses across British Columbia.
“British Columbia’s businesses are resilient, but resilience has limits,” said Michael Magnusson, Executive Director of the Chamber. “Economic growth, tax competitiveness, and cost certainty must become priorities in British Columbia if we want to sustain strong public services and vibrant communities.”
Michael Magnusson is the Executive Director of the Penticton & Wine Country Chamber of Commerce
