Interest Rates on Deferred Property Taxes

For B.C. seniors who defer their property taxes, The BC Budget 2026 announced a significant change to the Property Tax Deferment Program.

Rather than offering below market (and subsidized interest) on deferred property taxes, homeowners who defer property taxes in 2026 and later years will be charged interest at the rate of prime plus 2%. Interest will be compounded monthly, meaning that it will be calculated on the deferred tax loan balance and accumulated interest added each month. This means it will be at least 4% more expensive.

For property taxes deferred in 2025 and earlier years, interest rates will continue be charge at prime minus 2% and set on April 1 and October 1 each year. The interest charged will be simple interest, not compounded. BC homeowners who deferred property taxes in these years will not be affected by the proposed changes.

As a result, Homeowners who could afford their property taxes but were taking advantage of low interest rates may prefer to pay their 2026 property taxes on time and opt out of any automatic renewal of their property tax deferment account. For more information visit: Interest and fees for property tax deferment - Province of British Columbia

Going forward, the terms of the property tax deferment program have fundamentally changed to resemble a reverse mortgage, and may be more expensive than some loans offered by banks. The cumulative effect of compounding interest will eat into home equity at a much faster rate.

To prepare for these changes with prudence and without sacrificing quality of life, contact your tax and estate planning lawyer to review your estate plan.

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The federal budget was released in November, and it contains several elements that could significantly impact your business and financial planning. Read below for 3 important aspects of the new budget.

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1. No increase in the capital gains inclusion rate

The 2025 federal budget was released in November 2025. Since 2000, the capital gains inclusion rate has remained at 50%. In simple terms, if you realize a $100 capital gain, $50 is included in taxable income.

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In the 2024 federal budget, the government proposed increasing the capital gains inclusion rate from 50% to two-thirds (2/3), with a $250,000 annual exemption for individuals. Under that proposal:

• Up to $250,000 of capital gains realized by an individual in a year would continue to be taxed at a 50% inclusion rate.
• Any capital gains above $250,000 would be subject to a 2/3 inclusion rate.
• The $250,000 exemption would apply only to individuals.
• Corporations and trusts would be subject to a 2/3 inclusion rate on all capital gains, with no exemption.

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This proposal was ultimately cancelled on March 21, 2025. However, there has been ongoing concern that the federal government might reintroduce the increase.

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The good news is that the 2025 federal budget did not revisit or reintroduce any increase to the capital gains inclusion rate.

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2. Elimination of the underused housing tax

The Underused Housing Tax (UHT) has been in effect since 2022. In general, if a residential property is owned by a non-resident, the owner is required to file a UHT return each year and may be required to pay UHT if the property was vacant or does not qualify for an exemption.

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The UHT legislation has gone through one major change:

• For 2022, many private corporations, trusts, and partnerships were required to file a UHT return even if no tax was payable. Many owners were unaware of this requirement, and the late-filing penalties were significant.
• For 2023 and later years, the filing obligation was narrowed so that, in general, only owners with non-resident involvement were required to file.

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The 2025 federal budget proposes to eliminate the UHT starting with the 2025 taxation year. This means:

• No UHT will be payable for 2025 and later years, and
• No UHT returns will be required for those years.

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Taxpayers who may have outstanding UHT filing or penalty issues are encouraged to seek professional tax advice.

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3. CRA automatic tax filing for certain taxpayers what certain individuals

The 2025 federal budget also proposes a new automatic tax filing regime, starting in 2026, to help certain individuals access benefits that are only available after a tax return is filed.

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Under this proposal, the CRA may automatically file a tax return for an individual if certain conditions are met, including:

1. The individual’s taxable income is below the federal basic personal amount, plus the age amount and disability amount, where applicable.
2. The CRA has information for all of the individual’s income for the year. For example, individuals with self-employment income are unlikely to qualify, as the CRA would not have complete income information.
3. The individual has not filed a tax return in at least one of the preceding three taxation years and has not filed within 90 days after the filing deadline.

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The CRA may introduce additional criteria. Before filing a return on an individual’s behalf, the CRA will notify the individual. If the individual does not respond or object, the CRA may proceed to file the return automatically.

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Individuals should continue to file their tax returns on a timely basis. CRA’s automatic tax filing is intended as a safety net to help vulnerable or disengaged individuals access benefits and should be viewed as a last resort, not a substitute for proper tax compliance.

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You can check out my interview on Omni News Mandarin where I discuss these important changes at length.

Most separated parents are familiar with child support and the monthly table amounts paid from one parent to the other. But what about those additional, often unavoidable costs that come up for your child?

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You may find yourself paying more than just the basics. Perhaps your child needs braces, participates in recreational soccer or benefits from play therapy. Maybe you are sharing parenting time on a weekly basis but need childcare while you work.

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A common question that arises is whether the other parent is required to contribute to these expenses even if they do not agree with them.

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The answer is: possibly.

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Under the Federal Child Support Guidelines SOR/97-175 (the “Guidelines”), certain expenses may qualify as “section 7 special or extraordinary expenses.” Upon application by either parent, the court may order contribution toward all or part of these costs.

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What qualifies as a Section 7 expense?

S. 7 of the Guidelines list the following categories:

• (a) child care expenses incurred as a result of the employment, illness, disability or education or training for employment of the spouse who has the majority of parenting time;
  
• (b) that portion of the medical and dental insurance premiums attributable to the child;
• (c) health-related expenses that exceed insurance reimbursement by at least $100 annually, including:
  
  • orthodontic treatment,
  • professional counselling provided by a psychologist, social worker, psychiatrist or any other person,
  • physiotherapy, occupational therapy, speech therapy, and
  • prescription drugs, hearing aids, glasses and contact lenses;
• (d) extraordinary expenses for primary or secondary school education or for any other educational programs that meet the child’s particular needs;
• (e) expenses for post-secondary education; and
• (f) extraordinary expenses for extracurricular activities.

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How are Section 7 expenses shared?

When an expense qualifies, it is generally shared proportionately to the parent’s incomes.

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For example:

• If both parents earn roughly the same income, let’s say around $80,000 per year, the expense is typically shared 50/50.
• If one parent earns substantially more than the other, then their share of the expense will be more than the other parent. For example, if one parent earns $100,000 and the other earns $25,000, the higher-oncome parent may be responsible for approximately 75% of the expense with the other parent contributing 25%.

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A word of caution about unilateral expenses

Before you set off on incurring substantial expenses without consultation of the other parent, it is important to maintain communication and provide ample detail surrounding upcoming expenses. While the Guidelines do not require the parents’ agreement in order for an expense to qualify as a s.7 expense, the Court is reluctant to order contribution where one parent incurs significant costs without consulting the other parent and seeking their agreement where possible, particularly if reimbursement is sought long after the expense was incurred. This type of behaviour is viewed to be generally unreasonable. See: Younger v Younger, 2017 BCSC 363 .

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What about fun extracurricular activities?

This is a topic that often causes confusion and frustration amongst separated parents. Sports, music lessons, dance classes and similar activities are common life activities, but the Guidelines stipulate that only the extraordinary expenses related to these activities can qualify under section 7.

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The British Columbia Court of Appeal, in the decision Bodine-Shah v. Shah, 2014 BCCA 191 helpfully set out some guidance on assessing extraordinary expenses. Whether an extracurricular expense is “extraordinary” depends on factors such as:

• The combined incomes of the parents,
• Whether the expense is reasonable and necessary, taking into account necessity relative to the child’s special interests and reasonableness relative to the means of the spouses, the child, and the spending pattern prior to separation.
• In determining means, the overall financial means of the parents, including assets, debts and support obligations, and
• any other relevant factor including a lack of consultation of the other parent.

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In short, many common costs are not usually considered extraordinary. These include expenses such as entertainment, pets, vacations, school fees and supplies, allowances, meals outside the home, personal grooming, clothing, a computer and other technologies, and activities of an average child in relation to recreational activities such as dance lessons, community sports, and ski trips are not in the usual course extraordinary. See: Clarke v. Clarke, 2014 BCSC 824 .

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Final thoughts

As you may see, Section 7 expenses are rarely black and white. What qualifies depends on various factors, including your family’s specific circumstances, your child’s needs and how and when the expenses are raised. Timing, documentation and communication between parents all play a significant role. Because these issues can quickly become contentious and convoluted, it is often best to consult with a family lawyer early to understand your rights, obligations and options. Thoughtful planning and proper advice can make a meaningful difference in how these matters are resolved and our office would be happy to assist you in navigating this matter.

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If you plan to develop real estate in BC, be aware that the government is proposing significant changes to the province’s heritage conservation framework which could potentially delay development of some sites by up to two years.

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The proposed updates to the Heritage Conservation Act, which are scheduled to be introduced in spring 2026, would expand what qualifies as protected heritage and increase Indigenous involvement in development permitting on public, and potentially private, land. Much of the legislative work has been co-developed with First Nations since 2021, with municipalities and other stakeholders brought into the process later and under non-disclosure agreements.

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Proposed changes suggest wide-reaching implications. Local governments could be required to confirm archaeological data checks before issuing development, building, or subdivision approvals. Additional regulations may mandate such checks in prescribed situations, potentially including property sales or projects involving Crown corporations and critical infrastructure.

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The proposals also contemplate new regulatory authority for archaeologists, prohibitions on trading heritage objects, and steep penalties (up to $100,000 for individuals and $1 million for businesses) for serious contraventions. At the same time, certain heritage-related activities by First Nations on Crown land may be exempt from penalties and permitting requirements.

British Columbia has recently introduced Bill 20, the Construction Prompt Payment Act, bringing it in line with prompt payment regimes already in place across Canada. The legislation will come into force once regulations are finalized.

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Once effective, Bill 20 will impose mandatory payment timelines tied to standardized “proper invoices.” Owners will generally have 28 days to pay, with payment cascading down to contractors and subcontractors within strict timelines. Even where payment is withheld upstream, parties must still pay by their own calculated payment dates unless proper notices of non-payment are issued. Undisputed amounts must always be paid on time.

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Bill 20 also introduces a streamlined adjudication process to resolve payment disputes quickly. Eligible disputes, including non-payment and valuation of work, may be referred to adjudication, with binding decisions issued in as little as 30 days. Determinations are enforceable as court judgments, helping keep funds flowing and projects moving.

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Bill 20 also amends the Builders Lien Act by eliminating certain liens, shortening holdback periods from 55 to 46 days, and affirming demolition and removal work as lienable improvements. While the legislation will not apply retroactively, it represents a significant shift for B.C.’s construction and development industry.

BC moves to bring their Serious Injury or Illness Leave in line with most other Canadian provinces with the introduction of Bill 30. Introduced on October 20, 2025, Bill 30 would amend the Employment Standards act (ESA) to increase the length of unpaid Serious Illness or Injury Leave to 27 weeks in a 52-week period. This pushes the province ahead of Alberta and Quebec, who provide 16 and 26 weeks, respectively, for such leave.

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The new Serious Illness or Injury Leave introduced by Bill 30 is in addition to employer’s obligations under the BC Human Rights Code and expressly includes job protections, where employees must be reinstated to their pre-leave positions (or comparable) once they return to work.

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The new entitlements, available to employees covered by the ESA, can be used across multiple periods of at least one weeks, allowing employees who are managing episodic diseases or are undergoing recurrent treatments (e.g., dialysis).

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There is no minimum length of service for employees to be entitled to this leave, but they will need to provide medical documentation confirming their inability to work due to medical reasons and specifying the dates when leave is required.

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Employers should monitor any developments regarding Bill 30, as workplace policies will need to be reviewed and updated the bill were to come into effect.

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You can track the status of Bill 30 here.

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Employers in British Columbia need to update their sick leave policies to remove the requirement for medical notes for short-term medical leave, following the new changes to the Employment Standards Act and Regulations introduced by Bill 11. Starting November 12, 2025, employers cannot ask for medical documentation for short-term health-related leave. Bill 11, introduced by the Ministry of Labour on April 15th, prevents employers from requesting doctor's notes for short-term health-related leave under these conditions:

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1. The absence is equal to or fewer than 5 consecutive days, and
2. The employee has not already taken more than one other short-term health-related leave of five or fewer consecutive days

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This applies to two qualifying absences per calendar year, with no carryover of unused leave. After a third short-term medical leave in the same year, employers can ask for medical documentation to confirm the leave is medically necessary, although a doctor's note isn't always required.

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Prior to the introduction of Bill 11, employers could request “reasonably sufficient proof” of injury or illness from employees, most commonly in the form of a medical note. This approach grew criticism from health professionals and policy makers as placing an unnecessary burden on employees and the health care system, especially for minor illnesses expected to resolve quickly.

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Employers may still request medical documentation to determine appropriate accommodations or to assess an employee’s fitness to return to work. It’s important to note that the new regulations apply only in the situations described above and do not apply to other statutory leaves—maternity, parental, critical illness or compassionate care leave.

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In the fast-paced world of business, contracts are the backbone of commercial relationships. They define rights, obligations, and remedies, and serve as the primary tool for risk allocation. Contracts are also a key driver of business value. Failure to appropriately document business relationships in well drafted contracts creates uncertainty as to a business’ rights and obligations vis-a-vis third parties; valuators are likely to take a cautious approach in light of such uncertainty and will likely undervalue a business in these circumstances. Yet, despite their importance, many businesses underestimate the complexity of contract drafting and negotiation. Engaging legal counsel is not merely a formality—it is a critical safeguard against costly disputes, unintended liabilities, operational disruptions, and value suppression. This article explores the key risks associated with poorly drafted contracts and highlights why legal advice is indispensable throughout the negotiation and drafting process.

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1. Risk of Unintended Verbal Contract Formation

During negotiations, parties may exchange emails, draft term sheets, or engage in verbal discussions. Without clear documentation that negotiations are “subject to definitive agreement” or otherwise intended to be non-binding, courts may find that a binding contract was formed prematurely.

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Lawyers help manage this risk by drafting non-binding letters of intent, including disclaimers, and ensuring that all communications reflect the parties’ intent to be bound only upon execution of a final written agreement.

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2. Risk of Inadequate Party Identification

Misidentifying parties—such as using trade names instead of legal entities—can render a contract unenforceable or create confusion over who is bound. This is especially critical when dealing with corporations, partnerships, joint ventures, or trusts, where authority to bind the entity may vary.

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Legal counsel ensures that parties are properly named, their legal status is clear, and signatories have appropriate authority. They can also advise on the production and execution of ancillary documentation that can be used as evidence of a party’s intent to be bound by a contract, such as corporate, partnership, or trust resolutions, as may be applicable.

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3. Importance of Termination Provisions and Procedures

Termination clauses define how and when a contract can be ended, whether for cause (e.g., breach, insolvency, the occurrence of some event or condition) or for convenience. Poorly drafted termination rights can leave a party trapped in an unfavorable agreement or exposed to abrupt termination without recourse.

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Lawyers structure termination clauses to reflect the parties’ commercial realities, including notice periods, termination fees, post-termination obligations (e.g., return of confidential information, wind-down or sunset periods where immediate termination is impractical, etc.), and survival of key provisions like indemnity, limits of liability, and confidentiality.

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4. Risk of Overbroad Indemnification Provisions

Indemnification clauses allocate risk by requiring one party to compensate the other for losses arising from specific events, such as breach, negligence, or third-party claims. However, when drafted too broadly—using language like “in any way arising out of” or “directly or indirectly related to”—these provisions can expose a party to liability for actions beyond its control, including those of the other party or third parties.

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Legal counsel ensures that indemnity obligations are appropriately scoped, limited to the indemnifying party’s own conduct, and exclude categories such as taxes or unrelated litigation. Lawyers also help define procedural safeguards, such as notice requirements and control over defense and settlement, which are vital to managing indemnity risk.

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5. Risk of Inadequate or Inappropriate Limitations on Liability

Limitation of liability clauses cap the financial exposure of parties in the event of a breach or claim. Without careful drafting, these clauses may fail to expressly exclude or include consequential, incidental, or punitive damages, as would be appropriate for the circumstances, or may be rendered unenforceable due to ambiguity or inconsistency with other contract terms.

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Legal professionals tailor these clauses to the transaction, ensuring clarity, enforceability, and alignment with indemnity provisions. They also carve out exceptions for fraud, willful misconduct, or breaches of confidentiality, where unlimited liability may be appropriate.

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6. Risks of Failing to Document Intellectual Property Ownership

In transactions involving Intellectual Property—such as software development, branding, or creative services—failure to document ownership can result in disputes over rights, royalties, or infringement claims. Under Canadian law, for example, copyright created by an employee may belong to the employer, but contractors generally retain ownership unless they are specifically assigned.

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Lawyers draft ownership and licensing clauses that clearly delineate rights, address pre-existing materials, and include necessary assignments and waivers.

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7. Risk of Representations and Warranties Becoming Unintentionally Binding

In the absence of an “entire agreement” clause, pre-contractual statements—such as sales pitches, marketing documents, verbal assurances, or informal promises, which are not specifically included in the contract—may be deemed part of the contract. This can lead to disputes over alleged misrepresentations or attempted reliance on and enforcement of terms that were not intended to be legally binding.

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Properly drafted entire agreement clauses prevent this by stating that the written contract supersedes all prior communications. Legal counsel ensures this clause is robust and includes a “no modification” provision, requiring written amendments signed by both parties.

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8. Missing or Vague Boilerplate Provisions

Often overlooked, “boilerplate” or “general” provisions—such as notice requirements, assignment rights and restrictions, governing law and forum, and dispute resolution—play a crucial role in contract enforcement. Their absence or ambiguity can lead to confusion as to the practical application of the contract or to forum shopping (the practice of enforcing a contract in a jurisdiction with laws favourable to the complainant), or result in obligations becoming unexpectedly unenforceable.

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For example, failing to specify acceptable notice methods (e.g., excluding email due to reliability concerns, or contemplating the outcome if mail is sent during a strike or other labour shortage) can lead to questions as to whether critical communications were delivered properly, which could be the determining factor in whether a party is permitted to exercise a contractual right or is barred from doing so. Similarly, omitting a governing law clause may result in unpredictable legal outcomes where the laws of different jurisdictions treat a particular matter differently, and failing to confirm the parties’ rights and obligations with respect to assignment of their interest in the contract can result in unintended restriction on assignment or unwanted assignment of contractual rights to third parties. Legal counsel ensures these provisions are comprehensive, consistent, and tailored to the parties’ needs.

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9. Additional Considerations

The above is not a comprehensive list of issues that should be addressed by a professional when contracts are being drafted or negotiated. The circumstances specific to each commercial matter will give rise to practical and legal considerations unique to the subject transaction. A commercial lawyer can identify such considerations and provide guidance to ensure the contract is appropriately tailored so that key issues are addressed in a coherent, unambiguous, and legally binding manner.

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Conclusion

Contracts are not just legal documents—they are strategic tools that shape business relationships, allocate risk, and preserve value. The risks of proceeding without legal advice are significant: enforcement of unintended legal obligations, exposure to unforeseen liabilities, unenforceable terms, and costly litigation. By involving legal counsel early in the negotiation and drafting process, businesses can ensure that their contracts are clear, enforceable, and aligned with their commercial objectives.

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In short, legal advice is not a luxury—it is a necessity.

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The above article is meant for informational purposes only; it is not legal advice and should not be relied on as such. Readers should seek legal advice specific to their circumstances prior to executing a business contract or agreement.

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BC is moving toward greater transparency about who owns companies. Each private company in BC is required to maintain a transparency register which identifies people who have significant control over a company, which is kept internally and available for viewing by government officials.

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Starting in late 2025, private companies in B.C. will be required to file their transparency register information directly with the Business Registry, not just keep it internally. This is intended to prevent hidden ownership and increase public accountability. Under the new rules, some of this information will become public, including individuals’ full legal names, year of birth, and countries of citizenship. Companies will need to update changes within 15 days, instead of the current 30-day window.

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These rules will apply to all private companies in B.C. and will require disclosure of anyone who owns or controls 25% or more of shares or voting rights, or has the power to appoint or remove directors.

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Non-compliance comes with serious consequences. Fines may reach $50,000 for individuals and $100,000 for companies if false or misleading information is filed, plus additional penalties for failing to file at all.

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Now is the time for businesses to review ownership structures, update records, and get organized before filing becomes mandatory.