BC Budget 2025 estimates that the province’s deficit for the 2024-25 fiscal year was $9.135 billion, compared to the $7.911 billion deficit projected in the previous budget. The budget considers US tariffs enacted on March 4, 2025. Specifically, the projected deficits take into account a 10% tariff on Canadian energy products, a 25% tariff on all other goods from Canada, an additional 10% tariff on goods from China and a 25% retaliatory tariff on all goods from the US.
The budget makes changes to certain housing measures including increased rates for speculation and vacancy tax and increased housing assistance payments for low- and moderate-income individuals. New measures to encourage additional development by BC’s film industry were also introduced.
Fiscal projections for the next three years are as follows:
| Year | Projected surplus/ (deficit) |
|---|---|
|
2025–26
|
($10.912 billion)
|
|
2026–27
|
($10.203 billion)
|
|
2027–28
|
($9.863 billion)
|
BC Budget 2025 increases the speculation and vacancy tax rate to 1% (from 0.5%) for most Canadian citizens and permanent residents and to 3% (from 2%) for untaxed worldwide earners and foreign owners. The non-refundable tax credit for BC residents impacted will increase to $4,000 (from $2,000). Registered leaseholders will need to complete an annual declaration to claim exemptions in 2025 based on the use of the property in 2024 (as announced in BC Budget 2024). There are some exceptions—for example, the Predator Ridge resort in Vernon is exempt from the speculation and vacancy tax retroactive to January 1, 2024.
The before-tax household income threshold for the Rental Assistance Program is proposed to increase to $60,000 per year (from $40,000 per year). The average family is expected to see their supplement increase to approximately $700 per month (from $400 per month). The Rental Assistance Program is for families working at some point in the previous year who have at least one dependent child.
The before-tax household income threshold for the Shelter Aid for Elderly Renters Program is also proposed to increase to $40,000 per year (from $37,240 per year). As a result, the average supplement will go up to $337 per month (from $261 per month) and the maximum rent ceiling will increase to $961 per month (from $931 per month). The Shelter Aid for Elderly Renters Program is for individuals 60 years or older who pay more than 30% of their before-tax monthly household income towards rent.
BC Budget 2025 announces no changes to the corporate tax rates or the $500,000 small business limit.
Combined federal and BC corporate tax rates
| Year | Small business tax rate | General corporate tax rate |
|---|---|---|
|
2025 |
11.00% |
27.00% |
The budget expands the Film Incentive BC and basic production services tax credits. The basic Film Incentive BC tax credit increases to 40% (from 35%), and the basic production services tax credit increases to 36% (from 28%).
The budget also makes the enhanced regional and distant location tax credit for the Film Incentive BC or production services tax credit available for animation productions, under certain conditions. Specifically, these tax credits may be available where labour expenditures claimed are for workers who are physically present and working in offices in BC at a minimum of 50% of the time.
Taxpayers that claim the production services tax credit and incur BC production costs exceeding $200 million may also be able to access a new major production tax credit. This new credit is 2% of a corporation's accredited qualified BC labour expenditures for the major production. It can be claimed upon the completion of the major production.
These measures apply to productions starting principal photography on or after January 1, 2025.
The budget extends the deadline for qualifying expenditures for the clean buildings tax credit by one year to March 31, 2026. The credit is for 5% of eligible expenditures related to retrofits that improve the energy efficiency of multi-unit residential buildings with four or more dwellings and prescribed types of commercial buildings.
This deadline, which was originally introduced in BC Budget 2022, was set to expire on March 31, 2025.
The budget increases the interactive digital media tax credit to 25% (from 17.5%) for eligible salaries and wages paid in BC on or after September 1, 2025. The tax credit is now permanent and will be available for all eligible expenditures (where previously, it only applied to expenditures up to September 1, 2028).
BC Budget 2025 doesn’t change the personal rates, but it does index the personal tax brackets for 2025 as follows:
| Tax brackets | Marginal tax rates |
|---|---|
|
$49,279 or less |
20.06% |
|
$49,280 to $57,3765 |
22.70% |
|
$57,376 to $98,560 |
28.20% |
|
$98,561 to $113,158 |
31.00% |
|
$113,159 to $114,750 |
32.79% |
|
$114,751 to $137,407 |
38.29% |
|
$137,408 to $177,882 |
40.70% |
|
$177,883 to $186,306 |
43.7% |
|
$186,307 to $253,414 |
45.80% |
|
$253,415 to $259,829 |
49.80% |
|
Over $259,830 |
53.50% |
The top combined federal and BC marginal tax rates for 2025 are as follows:
| Type of income | 2025 |
|---|---|
|
Salary/interest income |
53.50% |
|
Capital gains |
26.75% |
|
Eligible dividends |
36.54% |
|
Non-eligible dividends |
48.89% |
The budget extends the eligibility for the BC Family Benefit so that families can receive payments in respect of a child who passed away after January 1, 2025 until the lesser of six months from their death or the date that would have been their 18th birthday.
The annual limit that an individual claim in respect of the Small Business Venture Capital tax credit has been increased to $300,000 (from $120,000) for eligible investments made after March 4, 2025.
The apprentice training tax credit for individuals, as well as the enhanced credit for First Nations individuals or persons with a disability, are extended to December 31, 2028 (from December 31, 2025).
The sale of used zero-emission vehicles will be subject to provincial sales tax (PST), effective May 1, 2025. These vehicles were previously exempt from BC PST with an expected end date for the exemption in 2027.
The budget exempts certain First Nations from property transfer tax on the transfer of legal ownership when certain conditions are met. Specifically, the exemption applies to transfers of legal ownership to First Nations that meet the definition of “band” (as defined in the Indian Act), where that First Nation previously had beneficial ownership of the property.
This measure applies to transfers of real property beneficially owned by First Nations prior to May 21, 2024.
The budget exempts foreshore property owned by Modern Treaty First Nations (or their public institutions) from property tax. Additionally, eligible properties owned by First Nations without a present use or those used for cultural or community purposes will be exempt from rural property tax.
These measures are effective for the 2026 taxation year.
2025 ICBC Rebate – a one-time rebate of $110 is anticipated to be sent to eligible policy holders in April 2025.
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Disclaimer
The information contained herein is general in nature and is based on proposals that are subject to change. It is not, and should not be construed as, accounting, legal or tax advice or an opinion provided by Doane Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, specific circumstances or needs and may require consideration of other factors not described herein.
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