2025 British Columbia Budget Highlights
On March 4, 2025, British Columbia’s Minister of Finance, Brenda Bailey, tabled the province’s 2025/26 budget. We have highlighted selected tax measures from the budget that may affect individuals and small businesses in British Columbia.
INDIVIDUALS
Personal Tax Rates
No changes were proposed to the provincial income tax rates. The 2025 individual income tax brackets have been indexed at the B.C. CPI rate of 2.8%.
| 2024 Taxable Income | 2025 Taxable Income | Tax Rate |
|---|---|---|
| $0 to $47,937 | $0 to $49,279 | 5.06% |
| $47,937 to $95,875 | $49,279 to $98,560 | 7.70% |
| $95,875 to $110,076 | $98,560 to $113,158 | 10.50% |
| $110,076 to $133,664 | $113,158 to $137,407 | 12.29% |
| $133,664 to $181,232 | $137,407 to $186,306 | 14.70% |
| $181,232 to $252,752 | $186,306 to $259,829 | 16.80% |
| Over $252,752 | Over $259,829 | 20.50% |
Top Combined Federal and Provincial Tax Rates - 2025
| Other/Interest/ Salary/Pension | Capital Gains | Eligible Canadian Dividends | Non-eligible Canadian Dividends |
|---|---|---|---|
| 53.50% | 26.75% | 36.54% | 48.89% |
Top rates apply to taxable income over $259,829 based on known federal and provincial rates as of March 4, 2025.
Personal Income Tax Measures
- The client action tax credit amounts for the 2025/26 benefit year will remain the same as the 2024/25 year.
- The B.C. family benefit is amended to continue payments for six months after a child’s death, effective January 1, 2025.
- The training tax credit will be extended for three years until the end of 2028.
- The annual credit limit for the small business venture capital tax credit increased from $120,000 to $300,000 for investments made on or after March 4, 2025.
Other Tax Measures
- Effective January 1, 2026, the speculation and vacancy tax rate for Canadian property owners currently taxed at the 0.5 per cent rate, will increase to 1 per cent. The rate for foreign owners, untaxed worldwide earners, and others currently taxed at 2 per cent, will increase to 3 per cent.
- Effective May 1, 2025, used zero-emission vehicles will be subject to provincial sales tax. The exemption was originally scheduled to end in 2027.
Cost of Living Assistance Measures
- ICBC will provide a $110 rebate to eligible drivers in April 2025. All personal and commercial ICBC customers who had an active eligible basic insurance policy in January 2025 will receive the rebate. Basic insurance rates will be maintained until March 31, 2026.
BUSINESSES
Corporate Tax Rates
The budget did not propose any changes to the provincial corporate income tax rates, and it did not change the $500,000 small business income threshold. The calendar year rates below reflect a December 31st year end.
| Income Type | B.C. Rate | Federal Rate | Combined Rates Calendar 2025 |
|---|---|---|---|
| General corporate | 12.00% | 15.00% | 27.00% |
| Small business | 2.00% | 9.00% | 11.00% |
| CCPC* investment | 12.00% | 38.67% | 50.67% |
| Non-CCPC investment | 12.00% | 15.00% | 27.00% |
| Manufacturing and processing income | 12.00% | 15.00% | 27.00% |
Based on known federal and provincial rates as of March 4, 2025
*Canadian Controlled Private Corporation
Other Business Income Tax Measures
- The clean buildings tax credit for energy efficient retrofits of commercial and multi-unit residential buildings has been extended to March 31, 2026.
- The interactive digital media tax credit will increase to 25 per cent for eligible salaries and wages paid in B.C. on or after September 1, 2025. The program is now permanent.
Refer to the 2025 B.C. Budget here for further details.
This has been prepared by the Total Wealth Solutions Group of Raymond James Ltd., (RJL). Statistics and factual data and other information are from sources RJL believes to be reliable, but their accuracy cannot be guaranteed. It is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities nor is it meant to replace legal, accounting, taxation or other professional advice. We are not tax advisors, and we recommend that clients seek independent advice from a professional advisor on tax-related matters. The information is furnished on the basis and understanding that RJL is to be under no liability whatsoever in respect thereof. This is intended for distribution only in those jurisdictions where RJL and the author are registered. Securities-related products and services are offered through Raymond James Ltd., Member of the Canadian Investor Protection Fund. Insurance products and services are offered through Raymond James Financial Planning Ltd., which is not a Member of the Canadian Investor Protection Fund.
