BC Conservatives pledge tax cuts for housing; expert questions funding plan

The Conservative Party of British Columbia hit the ground running in their first full week of campaigning by promising to tackle housing affordability.

Leader John Rustad says, if elected this October, he will provide renters and mortgage holders with a substantial deduction on their provincial income tax through the so-called “Rustad Rebate,” which was unveiled on Monday.

The policy proposal is designed as a staggered benefit, starting in January of 2026 with $1,500 per month of income tax deductions for renters and mortgage holders. This amount will increase by $500 each year, ultimately reaching a maximum monthly exemption of $3,000 by 2029.

“This is one of the most significant tax reliefs that British Columbia has ever given,” said Rustad. “We believe in British Columbian that government should not be taxing your primary issues, like residence,” he added.

Rustad estimates that once fully implemented, it will provide British Columbians with annual savings of “approximately $1600 probably closer to maybe $1,700.”

Designed for the “middle class,” Rustad also suggests that households making more than $250,000 annually would not be eligible for the exemption.

The BC Conservatives anticipate the deductions would cost the province roughly $3.5 billion if it reaches all two million homes in British Columbia.

However, Rustad was vague about details when asked about funding these deductions, alongside other commitments to cut revenue sources like the carbon tax while facing a $9 billion provincial deficit.

“We need to take a look at this reckless spending [David Eby] has put in place, [and] how to sort of rein in some of that spending,” said the BC Conservatives leader.

“Ultimately, we’re not going to be able to get to a balanced budget with one term. I need to be honest with people in British Columbia.”

Expert says how policy is funded ‘matters a lot’

While the BC Conservatives promise to deliver significant savings, how exactly they will fund the ambitious tax cut remains an open question.

“How they pay for it matters a lot,” said Tsur Sommerville, a professor at the University of British Columbia’s Sauder School of Business.

Sommerville tells 1130 NewsRadio that there are essentially three ways to finance an expensive policy: raising taxes, increasing the deficit, or cutting other programs.

“It’s often harder to cut big chunks of money because [it’s] often tied up in things like health care and schools. It’s hard to look around and find out where the fat is. I’m not entirely sure where that money is going to come from.”

The UBC professor is also skeptical about the Conservatives’ early projections, which indicate that the tax credit will not exceed $900 million for the 2026 provincial budget.

“If all renters got this… that’s about one million households; that’s already $900 million just from the renters alone.”

Additionally, Somerville is curious about what options will be available for homeowners who have already cleared their mortgage.

“From an affordability standpoint, one of the things that’s nice about this [policy]—opposed to giving people a tax break on their first home—it doesn’t necessarily channel directly into higher rents or home prices; it’s a bit more indirect.”