On June 18th, senior economist Alex Hemingway provided recommendations to the provincial legislature’s Select Standing Committee on Finance and Government Services: Annual Budget Consultation, which solicited public comments for the 2026 provincial budget to be tabled in February 2026. Following is Alex’s presentation to the committee.
Our province faces enormous challenges that require robust public investment in order to adequately address them. Our three recommendations relate to tax policy, housing and social investments.
- Implement a suite of fair tax reforms to reduce economic inequality and increase provincial revenues.
As a share of GDP, BC’s provincial government revenues remain substantially lower than they were 25 years ago, falling from 21.4% of GDP in 2000 to a projected 18.9% this year. In other words, BC is harnessing a much smaller share of our economic pie to invest in the public good than we once did.
To raise revenue and reduce inequality, the provincial government should, at a minimum: increase the top two income tax brackets by two points each, which would affect less than 5% of tax filers; increase the corporate income tax rate by one point from 12% to 13%; and tax high-value land wealth by increasing provincial property tax rates on value above $3 million and adding a new bracket above $7 million.
To add further revenue options and build trust in the tax system, BC should convene a Citizens’ Assembly on fair tax reform, where every day British Columbians selected by lottery can deliberate on how to best pay for shared priorities, with access to experts who can help inform the deliberations.
- Create 25,000 new units of non-market housing per year, while enabling a broader increase in housing supply of all kinds.
To ramp up non-market housing production, the province should significantly increase capital grants to projects under programs like the Community Housing Fund to ensure that good non-profit housing projects aren’t being turned away due to lack of funds. The province should also take the initiative to develop housing projects itself at a much larger scale, either through BC Housing or a new Crown agency, where most of the project costs can be booked as self-supported debt backed by the rental income generated.
To enable a broader increase in housing supply, the government should follow through on its promise to create a new annual infrastructure fund for municipalities, while requiring big cities like Vancouver to end the apartment bans they continue to impose on most of their residential land. These city-imposed apartment bans suppress housing creation, hurt economic productivity and block workers’ access to job-rich cities, pushing them into punishing commutes or out of a region altogether, among a range of other harms.
- Increase key social investments that create economic multiplier effects and reduce the cost-of-living.
For example, the province should significantly increase investment in public child care spaces that enable more young parents—especially mothers—to participate in the labour force. And, increased investment in public transit infrastructure and operations would raise economic productivity and reduce household transportation costs. In the primary care system, resources should be focused on the evidence-based Community Health Centre model, a high-quality continuous care model that is cost-efficient and removes pressure from crowded hospitals. Social assistance and disability rates should be raised to no less than the poverty line to ensure a decent life for all and help unleash the human and economic potential of British Columbians who struggle most.
Taking the road of belt-tightening or austerity would be a false economy. Failing to make key social investments now would hurt BC families and damage our long-term economic growth and productivity. Strong public investment can strengthen our economy and be funded with inequality-reducing taxes.
