BC Budget 2026: What was protected, what was cut, and what it means for our communities

For the fourth year in a row, Vancity Community Foundation was in Victoria for Budget Day. What we witnessed was a budget defined as much by what it scales back as what it invests in — one shaped by fiscal pressure and U.S. tariff uncertainty, with the government in clear restraint mode, investing in core areas like health and education while quietly reducing or delaying in others.

We want to give you an honest picture of what's in Budget 2026 through the lens of our strategic priorities and the work we do.

The big picture

Budget 2026 projects a $13.3 billion deficit for 2026/27 — the largest in B.C.'s history outside of the pandemic years. The government's response is twofold: raise some revenue through tax changes, and cut spending. That means an estimated $3.5 billion in "expenditure management savings" — program reductions, staffing cuts and delayed projects — and a commitment to eliminate 15,000 full-time-equivalent public sector positions over three years, including 2,500 within core BC Public Service.

That's the context in which every investment in this budget needs to be understood.

On taxes, the first income tax bracket rises from 5.06% to 5.60%, adding approximately $76 per year for the average taxpayer, though more than 40% of taxpayers will see savings through an expanded tax reduction credit. Other changes include raising the Speculation and Vacancy Tax for foreign owners to 4%, increasing the Additional School Tax on properties valued over $3 million and applying PST to a range of professional services and some previously exempt goods.

Housing: Large investments but a declining pipeline and uncertainty for renters

Since 2017, B.C. has committed over $19 billion to housing and is delivering or developing an estimated 95,000 homes. Budget 2026 maintains housing investment at over $2 billion per year.

However, BC Rent Bank — VCF's province-wide eviction prevention network serving 19 communities — is not named in Budget 2026. We do not know if this is a cut and we are seeking clarification from government. But we need to be honest about what uncertainty does to a program like ours.

BC Rent Bank is a network of 19 community organizations with real staff, real caseloads and real obligations to the people they serve. When those organizations don't know whether funding will continue, they are forced to plan for the worst — including a possible shutdown. We are hopeful to receive clarification in the coming days and remain committed to working collaboratively to keep this proven prevention tool available to communities across the province.

That uncertainty sits alongside a clear downward trajectory in new affordable housing construction. Budget 2026 reallocates nearly $1.4 billion in planned investments, leading to lower completion targets:

4,500 homes — 2025/26 forecast (current year)

4,000 homes — 2026/27 target (down 11%)

3,500 homes — 2027/28 target (down 22%)

2,500 homes — 2028/29 target (down 44%)

That's a near-halving of completions over three years — at a time when B.C.'s housing crisis remains acute.

Child care: Stabilization, but also a pause

Budget 2026 provides $330 million to ChildCareBC to stabilize existing programs — a genuine investment that will maintain lower fees and support operators and educators during federal-provincial renegotiation. But at the same time, the government is pausing enrolment of new providers into both the Operating Funding Model and the $10-a-day program. New childcare operators cannot access the funding they need to launch or grow, and new families cannot access the subsidy. If you're already in the system, you're protected. If you're not yet, you'll have to wait.

Income supports: Real progress, real pressure

The Ministry of Social Development and Poverty Reduction budget grows to nearly $6 billion in 2026/27, with Income Assistance rising to $4 billion — driven in part by a growing caseload, meaning more British Columbians are in need, not fewer.

The progress is real: B.C.'s overall poverty rate has dropped 29.4% since 2016, and child poverty is down 36.2%. Budget 2026 builds on that with:

$52 million over three years to improve disability assistance for couples

$121 million over three years for income, disability and supplementary assistance caseload pressures

$252 million over three years for Community Living BC

$475 million over three years for a redesigned system for children and youth with support needs, including a new BC Children and Youth Disability Benefit for approximately 12,000 families and a new supplement of up to $6,000/year for low and middle-income families

Climate and Reconciliation

Budget 2026 maintains the Disaster Resilience and Innovation Fund ($70 million over the fiscal plan) and continues support for community emergency preparedness — helping First Nations and local governments prepare for floods, wildfires and other climate impacts. On clean energy, B.C. is targeting 38% of its total energy mix from clean, renewable and low-carbon sources by 2028/29, up from 35% today.

On Reconciliation, the First Nations Equity Financing Program launches this spring with a $1 billion cumulative loan guarantee, giving First Nations the ability to hold equity in major provincial projects. Whether that translates into genuine community benefit will depend on implementation, but it's a meaningful structural step.

Looking ahead

Budget 2026 reflects difficult trade-offs made under real fiscal pressure. Some are reasonable. Others will be felt acutely by people who are already stretched.

In the weeks ahead, VCF will be working closely with government to confirm funding for BC Rent Bank — so we can continue supporting renters facing a sudden short-term emergency, while saving people and government millions of dollars. We'll keep watching, keep advocating and keep sharing what we learn.