This article is a section of the Spring 2026 edition of the rennie landscape, our semiannual report on the forces shaping housing markets in Metro Vancouver and across our key markets.
Each section of the landscape explores a different piece of the broader story—from interest rates and the economy to demographics, credit, and housing. Together, they provide context for understanding how these factors interact and what they mean for Metro Vancouver’s housing market.
The latest provincial budget projects a record-high deficit even as some capital spending is delayed and taxes are raised. It will also increase the cost of developing new housing.
BC’S BIG BUDGET BLOWOUT
On February 17th, the provincial government released its 2026 budget. As we noted earlier, the budget forecasts a record-high deficit of $13.3 billion, which projects to equal 2.9% of provincial GDP. The budget includes some additional spending on healthcare, social services, education and childcare, among other things. It also includes an income tax increase on the lowest personal income tax bracket (the first $50,363 of taxable income) from 5.06% to 5.60%.
While the budget did not include any specific measures on development, there were some tax changes that will directly impact our industry. The additional school tax rate was increased for properties valued at $3 million and greater from 0.2% to 0.3%, which will include development sites. Professional services will now be subject to PST, including architectural, engineering, and property rennie.com management services. These additional taxes will each increase soft costs when developing new housing and will be double taxed at completion via the property transfer tax and GST. The budget also expanded the speculation and vacancy tax for foreign residents to 4%
The budget leaves much to be desired. Taxpayers will be increasingly burdened by provincial debt while paying more in taxes. The development industry, which has been saddled with myriad policies seeking to limit demand (plus a few to increase supply) and development fees and taxes that are rising much faster than inflation, is being asked to absorb additional tax increases at a time when home prices are falling. This budget will, all else being equal, be a drag on future housing development in British Columbia.
A LANDMARK RULING
In August 2025 the BC Supreme Court ruled that the Cowichan Nation hold aboriginal title to a portion of their ancestral village site which encompasses part of southeast Richmond. The court found that fee simple titles held by the City of Richmond and federal government are invalid (suspended for 18 months to allow for negotiated transition) and that Crown grants of land to third parties are invalid. The court also ruled that aboriginal title and private fee simple title can coexist, but that the government has a “duty to negotiate” in good faith to reconcile these overlapping interests. The Cowichan Nation did not ask for the return of land from private homeowners and businesses.
This ruling, which has been appealed, adds uncertainty and the potential for conflict between fee simple title and aboriginal title, which will impact investment in the province. Private property rights underpin western economies, including in Canada and BC. Resolving this issue with urgency to ensure a clear understanding of property rights is of the utmost importance.
IF AT FIRST YOU DON’T SUCCEED, TRY, TRY AGAIN
The reason Canada and BC experienced population decline in 2025, as we noted in the Demographics section, is that the federal government has sought to reduce the temporary resident population in Canada. In its Immigration Levels Plan in 2024, the government set an ambitious target of reducing the non-permanent resident share of Canada's population to 5% (from a high of 7.6% in Q3 2024) by 2026. It also reduced its permanent resident targets from 500,000 to 380,000 (though as we noted immigration is still a net positive to population growth). rennie.com
As of Q2 2025—which was the latest available data when the 2025 update was made to the plan, the non-permanent share of the population had only fallen to 7.3% of the population. The new plan keeps the 5% target, but pushes it out to the end of 2027. At the end of 2025, temporary residents accounted for 6.5% of the population, meaning that a net outflow of approximately 600,000 NPRs would be required over the next two years to reach the target.
IF YOU DON’T USE IT, YOU LOSE IT
The federal government released an updated budget on November 4th. As we noted earlier, the federal deficit is forecast to be $78.3 billion, which is projected to be 2.5% of national GDP. The previous plan to reduce the debt-to-GDP ratio was scrapped in favour of a new deficit-to-GDP measure along with a goal of balancing the operating expenses portion of the budget by 2028-29.
Housing was a very small feature of the budget relative to its 2024 predecessor. The previously announced GST rebate for first-time homebuyers was kept and was not expanded. The implementation of Build Canada Homes was a focus within the budget, which will have its own budget of $7.3 billion and focus on the construction of non-market housing. The budget also eliminated the underused housing tax.
Overall, this latest budget will have little effect on housing in BC. Additional construction of non-market housing will bring a net benefit, as will the removal of the underused housing tax, but ultimately their effect will be marginal.
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