If your BC business does any product development, engineering, or process-improvement work that could qualify as scientific research and experimental development, two changes from this year's provincial and federal budgets are worth working into your 2026 tax planning now rather than at filing time. British Columbia's Budget 2026 removed the sunset date on the province's SR&ED tax credit, making it a permanent feature of the corporate tax system for the first time since it was introduced. In the same budget, BC adopted the federal government's enhancements from Bill C-15 — most significantly, doubling the expenditure limit for the refundable credit from $3 million to $6 million.
Together, these changes meaningfully increase how much cash a growing BC company doing R&D can recover, and they remove a piece of legislative uncertainty that had been hanging over multi-year R&D planning.
The credit no longer has an expiry date
Before Budget 2026, BC's SR&ED tax credit was a temporary measure that Victoria had to periodically renew. The most recent extension had it set to expire for expenditures incurred on or after September 1, 2027 — meaning any company planning R&D spending into 2028 and beyond was doing so without certainty that the provincial credit would still exist. Budget 2026, tabled by Finance Minister Brenda Bailey on February 17, 2026, removed that sunset date entirely. The credit is now a permanent part of BC's corporate tax system, with no scheduled expiry to track or plan around.
Source: Province of British Columbia — Scientific research and experimental development tax credit.
The refundable expenditure limit doubled to $6 million
This is the change with the more immediate dollar impact. BC's SR&ED credit has two components:
- A refundable credit of 10%, available to Canadian-controlled private corporations (CCPCs) and, as of this year's changes, eligible Canadian public corporations (ECPCs), calculated on the lesser of the corporation's qualified BC SR&ED expenditure for the year or the expenditure limit.
- A non-refundable credit of 10% for SR&ED spending above the expenditure limit, and for corporations that don't qualify for the refundable stream. Non-refundable credits can be carried back three years or forward ten.
The expenditure limit that caps the refundable stream had been $3 million for years. Budget 2026 raised it to $6 million, matching the increase Ottawa made to the federal enhanced SR&ED credit through Bill C-15 (the Budget 2025 Implementation Act, No. 1), which received Royal Assent on March 26, 2026. BC applied its own change on the same effective date as the federal one: tax years beginning on or after December 16, 2024 — so this isn't only a going-forward change for some companies; it may already apply to a tax year you've filed or are about to file.
In dollar terms, a qualifying CCPC that previously topped out at a $300,000 refundable BC credit (10% of the old $3 million limit) can now claim up to $600,000 refundable, provided its qualified BC SR&ED spending is high enough to use the higher limit.
Source: Province of British Columbia — Scientific research and experimental development tax credit.
Other changes carried over from the federal alignment
BC's SR&ED credit is built on top of the federal SR&ED program's expenditure and eligibility rules, so when Ottawa changes those rules, BC's provincial credit generally follows. Alongside the $6 million expenditure limit, Budget 2026 also brought in, effective the same December 16, 2024 start date:
- Restored eligibility for capital expenditures as qualified BC SR&ED expenditures — a category of spending that had been excluded from SR&ED claims since 2014, and is now claimable again.
- A higher phase-out threshold for the prior-year taxable capital test that determines a CCPC's expenditure limit, raised to $15 million (from $10 million), with the enhanced credit fully phased out at $75 million of taxable capital. A company with more capital employed in Canada now retains access to the higher limit for longer before it starts phasing down.
- Extension of the refundable credit to eligible Canadian public corporations (ECPCs) — previously the refundable stream was CCPC-only.
Source: Province of British Columbia — Scientific research and experimental development tax credit; Parliament of Canada — Bill C-15, Royal Assent.
Why the December 16, 2024 effective date matters for filed returns
Because the federal and provincial expenditure-limit increases apply retroactively to tax years beginning on or after December 16, 2024, a BC company with a calendar year-end that already filed its 2025 T2 using the old $3 million limit may be leaving money on the table. If your SR&ED spending for a tax year starting on or after that date exceeded $3 million but was capped there for refundable-credit purposes, it's worth revisiting that return — or the SR&ED claim within it — to see whether an adjustment against the new $6 million limit is available. The same applies to a claim that excluded capital expenditures on the assumption they weren't eligible; that exclusion no longer holds for tax years starting on or after December 16, 2024.
What BC businesses doing R&D should do now
- Check your tax-year start date against December 16, 2024. If a filed or in-progress SR&ED claim falls after that date and used the old $3 million limit, model whether the higher limit changes the refundable amount you're owed.
- Revisit capital expenditures excluded from past claims. Equipment and other capital costs tied to SR&ED work may now be eligible again for tax years starting on or after December 16, 2024.
- Confirm CCPC or ECPC status before assuming which stream — refundable or non-refundable — applies to your claim, particularly if your corporate structure or share ownership has changed recently.
- Build the permanent credit into multi-year R&D planning. With the sunset date removed, a multi-year product development or engineering program no longer carries the risk that the provincial credit disappears partway through.
- Coordinate the BC claim with your federal SR&ED filing. The two are prepared together on the same underlying qualified expenditures, and the provincial credit is claimed through your T2 alongside the federal claim.
Key takeaways
- BC's SR&ED tax credit is now permanent — Budget 2026 removed the September 1, 2027 sunset date that had applied under the prior extension.
- The refundable credit's expenditure limit doubled from $3 million to $6 million, worth up to $600,000 refundable at the 10% rate, for tax years beginning on or after December 16, 2024.
- The change mirrors federal Bill C-15 (Budget 2025 Implementation Act, No. 1), which received Royal Assent on March 26, 2026.
- Capital expenditures are eligible again as qualified BC SR&ED spending, reversing an exclusion in place since 2014.
- The taxable capital phase-out threshold for a CCPC's expenditure limit rose to $15 million, fully phased out at $75 million.
- The refundable credit now extends to eligible Canadian public corporations (ECPCs), not just CCPCs.
- Because the changes are retroactive to December 16, 2024, an already-filed return may be eligible for an adjustment.
If your BC business is doing R&D-eligible work and you want a filed or upcoming SR&ED claim checked against the new $6 million limit and the restored capital-expenditure eligibility, RN Canada works with BC companies to coordinate provincial and federal SR&ED claims as part of year-round corporate tax planning.