On October 4, Premier David Eby announced that, if re-elected, the BC NDP would introduce a new 24.5% provincial tax bracket on income above $1 million and increase the two brackets below it by two percentage points each. According to the party, the change would apply to the top 4% of earners, with revenue directed to health care, and would not affect the remaining 96%. While this policy proposal is fairly straightforward, the actual planning around it is considerably nuanced.

We should say at the outset that this is a campaign promise, not law. It applies only if the NDP both wins on October 24 and legislates it for the 2027 tax year. The B.C. Conservatives have pledged not to raise taxes. Nevertheless, the proposal is a useful stress test for any long-term tax plan, and the planning window it creates is worth understanding now.

What is proposed

Today, B.C.'s top provincial rate is 20.5% on income above $265,545. Combined with Ottawa's 33% federal rate, a B.C. top bracket income earner currently pays 53.5 cents on their last dollar earned. Under the NDP proposal, the provincial rates would be 18.8% on income between $190,405 and $265,545, 22.5% between $265,545 and $1 million, and 24.5% above $1 million. Combined with federal tax, the top two rates would become 55.5% and 57.5% respectively. 

Importantly, these are marginal rates. They apply only to dollars earned above each threshold, not to all income. The table below shows the additional annual tax at several income levels.

Notably, this would be the second change to B.C. personal tax in two years. Budget 2026 already raised the lowest provincial rate from 5.06% to 5.6% and paused indexation of every tax bracket from 2027 through 2030. Normally the thresholds rise with inflation each year so that a cost-of-living raise does not push income into a higher bracket. Frozen thresholds remove that protection, so the same real income is taxed a little more each year. Assuming 2% annual inflation, someone earning $300,000 today would pay roughly $1,900 a year more by 2030 from the freeze alone, before any new bracket applies. The thresholds in the NDP proposal would be frozen on the same schedule.

Which income types are affected

The proposal is an income tax measure which means it doesn’t affect all types of money equally. B.C. Green Party Leader Emily Lowan noted that most of the ultra-wealthy do not get rich on pay cheques. Their fortunes grow in stocks and real estate, which the plan "doesn't touch a cent of." 

A new income tax bracket affects salary and professional income: surgeons, specialists, senior executives, partners, and business owners who pay themselves a wage. It does not directly reach wealth held in holding companies, rental property, or investment portfolios. Capital gains are included in income at only half their value, so the top rate on a realized gain would only move from 26.75% to 28.75%. Someone living off a large portfolio would feel this change far less than a cardiologist in their peak earning years. 

High earners rarely move for tax alone, but income can often be shifted, deferred, or incorporated. For example, the year Ottawa introduced its 33% federal bracket, Statistics Canada recorded an 18% drop in the average income of the top 1% of filers. Revenue projections for top-bracket taxes carry real uncertainty. 

The fiscal backdrop

The proposal is projected to raise $225 million in 2026/27, $925 million the following year and $1 billion after that. The province's recent fiscal positions can help contextualize these amounts:

Sources: B.C. Public Accounts 2022/23, 2023/24 and 2025/26; Budget 2026 fiscal plan.

B.C. recorded a $704 million surplus in 2022/23. Three deficits followed, totaling about $20 billion. Last year's $7.7 billion shortfall included a one-time $2.6 billion tobacco settlement. Budget 2026 projects a $13.3 billion deficit this year, with no return to balance within the three-year plan, and taxpayer-supported debt is forecast to reach $189 billion by 2029. In March, Moody's lowered the province's rating to Aa2 with a negative outlook.  

Notably, the NDP has said the new revenue would "fund healthcare and lower costs". That is new program spending rather than deficit reduction, so on the government's own figures the deficit path would be unchanged by this measure. 

For planning purposes, the conclusion is the same whichever party forms government: with deficits projected through 2028/29, provincial tax relief looks unlikely in the medium term. It is prudent to treat current rates as the likely floor rather than a ceiling. 

What this might mean for your planning

Nothing here calls for action before October 24. The proposal does, however, provide a useful opportunity to review existing planning assumptions. The questions below are worth asking regardless of the election result. 

If you earn a salary or professional income above $190,000.

You are the group this proposal is written for. Consider the following two points:

1. Deductions become more valuable. An RRSP or individual pension plan contribution deducted at a 57.5% marginal rate saves four cents more per dollar than one deducted at 53.5%, so there is no reason to rush a contribution into 2026.
2. Income where you can control the timing, such as a bonus deferral, a retiring allowance or a stock option exercise, would be cheaper to recognize in 2026 than in 2027 (if the proposal passes). Importantly, the bracket freeze already in law means a cost-of-living raise will push a little more income into the higher tiers each year to 2030, with or without the new bracket. 

If you own an incorporated business or professional corporation.

The gap between the corporate rate and the top personal rate would widen by four points. That increases the value of retaining earnings inside the company and controlling when they come out.

The mix of salary, dividends and capital dividends in how you pay yourself deserves a fresh look, as does the timing of any planned large withdrawal. Shareholder loan balances, the capital dividend account, and the order in which you draw from corporate and personal assets in retirement all become slightly more consequential. None of this is new; a higher top rate simply raises the stakes on decisions you are already making. 

If you live mainly on portfolio income. 

You are affected least. The top rate on a realized capital gain could move two points, from 26.75% to 28.75%, and dividend rates could rise modestly. The more relevant question is sequencing: which accounts you draw from first, how much income you deliberately realize each year to use the lower brackets, and whether part of a large, unrealized gain is better crystallized in 2026. Conversely, if you are carrying a large unrealized loss, there is no reason to hurry. 

If charitable giving is part of your plan. 

This is a genuine unknown. B.C.'s donation tax credit on gifts above $200 is 16.8%, rising to 20.5% to the extent a donor has income taxed at the top rate, mirroring the 33% federal credit for top-bracket earners. The NDP proposal says nothing about whether the credit would follow the new 22.5% and 24.5% rates. If it does, large gifts become more valuable after 2026 and donors with flexibility may prefer to wait. If it does not, the after-tax cost of giving rises for top earners and 2026 becomes the better year. Until the detail is published, donors planning a significant gift should keep both outcomes in view, and donations of appreciated securities, which also eliminate the capital gain, remain attractive either way. 

If you have genuine flexibility over where you live. 

At $1 million of income, the provincial tax difference between B.C. and Alberta would grow from roughly $45,000 a year today to about $61,000 under the proposal. That may tempt some. However, for most families, where to live is a lifestyle decision first, with tax as only one factor among many. 

How to plan ahead regardless of outcome? 

Ultimately, none of this requires immediate action. We do not know which party will form government, whether this bracket proposal would survive a budget, or what else the next government might change. Reacting to campaign promises is a reliable way to make expensive mistakes. The stronger response is the one we apply to markets: build a plan that works under several outcomes rather than betting on one. Tax-efficient income, deferral where it makes sense, and a portfolio that does not depend on any single rate holding still. If B.C. raises the top bracket, your plan should already be built to absorb it.