What the Federal Budget Missed — and B.C.’s Budget Can Fix

By Kiersten Enemark
CCI's Director of B.C. Affairs

Canada’s 2025 Federal Budget rightly recognizes that domestic innovation is the engine of productivity and long-term economic growth. Billions were committed to artificial intelligence, quantum technologies, and intellectual property initiatives to improve commercialization outcomes for Canadian firms.

But recognition is not the same as execution.

Several high-impact tools to drive innovation, scale Canadian companies, and reverse declining productivity were left on the table. That leaves an opening—one B.C. should seize.

With the province’s Look West economic plan setting a clear direction, B.C. Budget 2026 can move from aspiration to action by filling the gaps left federally and positioning the province as Canada’s most competitive innovation jurisdiction.

What the Federal Budget left on the table, here are six targeted, practical measures B.C. Budget 2026 can implement to spur economic growth.

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1. Turn B.C. Procurement into a First-Customer Pipeline for Scale-Ups

The government is one of the largest buyers in the economy. Yet too often, Canadian innovators are locked out. B.C. should implement a clear “Buy Canadian” approach, building on BC Procurement Plan 2024 and the newly initiated Connected Services BC, to ensure domestic firms can scale by selling to their own government first. Health services and dual-use technologies are other examples where the government could direct efforts to include domestic providers to accelerate the growth of Canadian innovators. To increase the procurement from domestic innovations, we recommend the provincial government build timely, straightforward procurement processes where adopting innovation is awarded and incentivized.
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2. Keep Intellectual Property Revenue in B.C. with an Innovation Box

A reduced corporate tax rate on income derived from intellectual property developed through R&D in B.C. would reward commercialization—not just invention. While the federal government passed on this proven tool, B.C. could act decisively, attracting investment, anchoring IP locally, and keeping high-value revenues in the province. The tax implication for the province would be modest, and the Innovation Box would be a tool to attract and keep tech companies in B.C.
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3. Keep Ownership and Head Offices in Canada with Incentives for Canadian-Led Acquisitions

Scaling doesn’t only happen organically. Strategic acquisitions allow Canadian firms to grow IP, data assets, and global reach quickly. Today, federal and provincial governments do not offer any tax credits or financial incentives for domestic companies to scale up through acquisitions. For example, expenses of acquiring a business (ex. Legal and administrative fees) be considered operational expenses that can be written off the year of acquisition. B.C. could be a trailblazer and be the first to introduce targeted incentives to support Canadian-led mergers and acquisitions—keeping ownership, talent, and value creation at home.
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4. Unlock Private Capital for Innovation with Flow-Through Shares

The federal budget expanded flow-through shares to critical mineral exploration, but passed on the innovation sector. Extending this tool to capital-intensive innovation sectors—deep tech, life sciences, and clean technology—would unlock private investment for companies facing long development timelines and high upfront costs.
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5. Build B.C.’s Innovation Leadership in Critical Projects and Infrastructure

B.C.’s natural resource, agriculture, and energy sectors are global leaders—but they remain under-connected to local technology innovators. With critical minerals and major infrastructure projects top priorities, B.C. can create value-add strategies by embedding local technologies into publicly funded supply chains. This is how productivity grows.
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6. Match Alberta on SR&ED to Stay Competitive for Research and Development

Ottawa modernized SR&ED by increasing expenditure limits and raised the phase-out thresholds to better support mid-sized firms. B.C. should follow suit by increasing its SR&ED tax credit from 10% to 20%, matching Alberta and ensuring the province remains competitive for R&D investment.
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B.C. Budget 2026 is a Moment of Choice.

The province has an opportunity to pick up where the federal budget missed out. The innovation tools Ottawa left behind, B.C. could pick up to reverse productivity decline, strengthen economic sovereignty, and ensure Canadian companies don’t just start here—but grow and win here.

B.C. Budget 2026 is an opportunity to strengthen targeted, pro-growth innovation policies. By implementing innovation-forward policies, B.C. could be the province of choice for rapidly scaling up tech companies to scale up and stay.

If you’re interested in connecting with Kiersten about innovation and policy in British Columbia, you can reach her at kenemark@canadianinnovators.org
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À propos du Conseil des innovateurs canadiens

Le Conseil des innovateurs canadiens est une organisation nationale basée sur ses membres qui remodèle la façon dont les gouvernements à travers le Canada pensent à la politique d'innovation, et qui soutient les entreprises d'envergure nationale pour stimuler la prospérité. Fondé en 2015, le CCI représente et travaille avec plus de 150 entreprises technologiques canadiennes à la croissance la plus rapide. Nos membres sont les chefs de la direction, les fondateurs et les cadres supérieurs qui sont à l'origine de certaines des entreprises à grande échelle les plus prospères du Canada. Tous nos membres sont des créateurs d'emplois et de richesses, des investisseurs, des philanthropes et des experts dans leurs domaines de la technologie de la santé, des technologies propres, de la fintech, de la cybersécurité, de l'IA et de la transformation numérique. Les entreprises de notre portefeuille sont leaders sur leur marché vertical, commercialisent leurs technologies dans plus de 190 pays et génèrent entre 10 et 750 millions de dollars de revenus annuels récurrents. Nous plaidons en leur nom pour des stratégies gouvernementales qui augmentent leur accès aux talents qualifiés, au capital stratégique et aux nouveaux clients, ainsi qu'à une liberté d'exploitation élargie pour leurs poursuites d'échelle à l'échelle mondiale.