Policy Horizon July 2026

July 2026  |  Government Relations & Policy Update

July brought a full inbox. While much of BC’s business community is navigating the uncertainty of US tariffs and a softening provincial economy, the policy files close to home kept moving. This month, Policy Horizon covers seven areas that our members and our government relations work are tracking actively: the state of BC’s economy and what the latest forecasts mean for Kelowna; a significant new development on Okanagan energy supply that directly validates one of our key pre-budget asks; agriculture — from the Vintage Replacement Program to the Next Agricultural Policy Framework; the water and environmental picture across the valley, which is increasingly hard to ignore; municipal spending; labour supply; and local procurement. There is also a brief note on what is happening at City Council and at the BC Chamber.

Let’s get into it.

The Economic Outlook: BC at the Back of the Pack

TD Economics released its Provincial Economic Forecast on June 19, and the numbers for British Columbia deserve attention. The bank is projecting real GDP growth of just 0.5% for BC in 2026 — among the weakest showings of any province, and a significant step down from 2.0% in 2025. Employment is forecast to contract by 0.5%, the worst performance nationally. The unemployment rate is expected to edge up to 6.3%. Housing starts are forecast to soften to 43,600 units, and existing home prices are expected to fall modestly.

The drivers of this weakness are familiar to our members. BC’s population is now declining, reflecting a sharp pullback in non-permanent residents tied to federal immigration policy. That is cooling consumer-facing sectors — retail spending ranked second-weakest among provinces in the first quarter. US tariffs continue to weigh on key BC exports, particularly lumber and metals. And the housing market, while softening on prices, is also soft on residential construction investment, limiting near-term momentum in new supply.

The bright spots are real but narrow. LNG Canada, which shipped its first cargo in mid-2025, continues to ramp up, boosting BC’s energy export profile and building trade ties with Asian markets. BC accounts for four of fifteen federally fast-tracked major projects across energy, mining, and infrastructure, and those should provide a floor under investment. TD expects a recovery in 2027, with real GDP rising to 1.9% as pent-up housing demand, improved affordability, and lower bond yields take effect.

For Kelowna members, the forecast is a reminder that the headwinds our members are describing — deferred investment decisions, scaled-back hiring, compressed margins — are not unique to any one business. They reflect the provincial condition. It also underscores why the Chamber’s pre-budget asks to reduce the regulatory and cost burden on small and medium businesses are not peripheral requests — they are exactly the kind of policy response an economy in this position requires.

Okanagan Energy Supply: The BCUC Steps In

One of the three priorities in the Kelowna Chamber’s June Pre-Budget Submission to the Select Standing Committee on Finance and Government Services was the electricity capacity gap constraining growth in our region. We described how connection delays, unavailable industrial power, and unbudgeted electrical servicing for new subdivisions are acting as a concrete ceiling on housing, investment, and economic development in the central Okanagan.

On July 7, the British Columbia Utilities Commission (BCUC) issued a letter that validates that concern at a regulatory level. Writing to BC Hydro, FortisBC Inc., FortisBC Energy, regional stakeholders, and First Nations across the Okanagan, the BCUC Registrar noted a clear disconnect between the utilities’ own view of energy planning adequacy and what local stakeholders are experiencing on the ground. The BCUC received submissions from BC Hydro, the two FortisBC entities, and twelve regional stakeholders. The local voices identified “ongoing issues, including a lack of local electric distribution capacity, that are perceived to be delaying the connection of new developments and hindering economic growth.”

The BCUC’s response is to convene a multi-day in-person workshop in Kelowna or a nearby central Okanagan location in the fall of 2026. The workshop will bring utilities, regional stakeholders, First Nations, and the Commission itself together to improve collective understanding of how energy planning is currently conducted in the Okanagan, the challenges faced by local stakeholders, and the paths forward. Utilities are being asked to propose a mutual date by August 5, 2026.

This is a meaningful development. It signals that the regulatory body responsible for overseeing the province’s energy utilities has heard the Okanagan’s concerns and is not content to accept the utilities’ own assessment at face value. The Kelowna Chamber will be monitoring the workshop process closely and will seek to ensure that business community perspectives — particularly around connection timelines for commercial and residential development — are well represented.

What the Chamber Has Asked For

Our pre-budget submission called for three specific measures on electricity capacity:

• Transmission infrastructure funding treating grid upgrades on par with highways and transit, and supporting BC Hydro’s $36 billion 10-year capital plan with expedited permitting and regulatory approvals.
• Binding connection timelines directing Fortis BC and the BC Utilities Commission to establish service standards of 12 months maximum for residential and small commercial connections, and 18 months for industrial.
• Distributed generation incentives offering tax incentives and streamlined permitting for on-site solar, battery storage, and cogeneration for commercial and industrial facilities, reducing demand pressure on the grid while lowering operating costs.

The BCUC process does not resolve these asks on its own, but it creates the forum in which they can be advanced. We will be engaged.

The Kelowna Chamber has also written and submitted a national policy to the Canadian Chamber of Commerce for consideration at its October Policy Conference: “Powering Canada’s Future: The Urgent Need for Electricity Capacity Growth to Support Housing Construction and Data Centre Development.” We expect strong support from our Chamber colleagues.

Agriculture: From Vintage Replacement to National Policy

Agriculture is central to what Kelowna is. It shapes our economy, our regional identity, our tourism, and our food supply. This month, two distinct but related agricultural policy files are active: the ongoing Vintage Replacement Program dispute, and the federal Next Agricultural Policy Framework consultation.

Vintage Replacement Program: Still Unresolved

As reported in our June Policy Horizon, the Kelowna Chamber wrote to BC Agriculture and Food Minister Lana Popham on June 11, setting out serious concerns about how the Vintage Replacement Program — introduced to help Okanagan wineries survive the catastrophic 2024 deepfreeze — is being administered by the BC Liquor Distribution Branch. The two core problems remain: an overly narrow interpretation of what constitutes a “replacement wine,” and an Olympic Average cap that is now being applied to BC VQA and 100% BC-grown wines that have no connection to imported replacement inputs.

We are continuing to press for resolution. The five remedies we have asked for remain on the table.

This is not a matter of asking for a windfall. It is a matter of asking the government to honour what it said it would do when this industry needed it most.

Next Agricultural Policy Framework: Chamber Submission Filed

The Kelowna Chamber, as a member of the Canadian Chamber of Commerce’s Agriculture and AgriFood Committee, is part of the national submission to Agriculture and Agri-Food Canada’s public consultation on the Next Agricultural Policy Framework (NPF), filed June 29, 2026.

The Canadian chamber’s submission makes five key recommendations: expanding international market access and research investment through AgriMarketing and AgriScience; preserving and enhancing business risk management programs; fostering federal-provincial regulatory alignment and harmonization; promoting technology adoption and digitization in agriculture; and improving the efficiency of program administration. These themes align directly with what our Okanagan agri-food members — in wine, tree fruit, specialty crops, and agri-tourism — tell us they need.

Of particular note for our region: the submission highlights Canada’s regulatory burden ranking (32nd out of 38 OECD economies), the inadequacy of flat AgriScience and AgriMarketing funding over the past decade, and the persistent gap in technology adoption that leaves Canadian producers less competitive and more exposed to labour shortages. These are not abstractions; they describe conditions our Okanagan producers navigate every day.

The Kelowna Chamber has also adopted or co-developed a range of provincial and national policy positions on agriculture, including policies on BC government training programs for fruit growers, natural assets valuation, ALC regulation reform, tree fruit sector sustainability, food sovereignty, and strengthening intergenerational farm transfers. We are also preparing a submission to the Competition Bureau on Canada’s food supply chain, in draft for July 2026.

Water: Drought, Milfoil, and the Long View

The Okanagan Basin Water Board’s July report, from its July 7, 2026 meeting at the Regional District of North Okanagan, contains information that every Okanagan business owner and resident should be aware of. The drought picture is serious, the long-term water management challenges are growing, and there is also some genuinely good news worth marking.

The Drought Is Real and Worsening

Drought conditions remain severe across the Okanagan, and the data presented at the July Board meeting makes clear this is not a single-season event. June precipitation was well below normal, extending the low-rain trend from spring. Many streams are flowing at reduced levels. Lake levels in Okanagan Lake and Kalamalka Lake were described as exceptionally low for this time of year. Most concerning: groundwater monitoring across the region shows many wells at record or near-record lows, reflecting the cumulative impacts of multiple years of drought.

Okanagan residents and businesses are being urged to check their local watering restrictions from their water provider. The immediate call to action is to save water for fish, food, and firefighting. For businesses that depend on agricultural inputs, tourism-season water availability, or stable operational water supply, these are not background conditions — they are near-term operational risks.

The loss of orchard harvest and stock could reach $300M in 2026 if adequate irrigation is not sourced.

The Board also heard from City of Kelowna Utility Services Department Manager Rod MacLean, who highlighted the growing challenge of maintaining and replacing aging municipal water infrastructure. MacLean flagged the upcoming need for senior government investment in the provincial infrastructure underpinning the Okanagan Lake Regulation System — a reminder that water infrastructure is another category of capital investment that cannot be deferred indefinitely.

Millie Manatee Makes Her Debut

On a more hopeful note, the OBWB officially unveiled Millie Manatee, its new invasive milfoil harvester. The harvester expands the OBWB program’s ability to manage Eurasian watermilfoil in areas of the Okanagan that were previously difficult to access — a practical, hands-on contribution to the health of our lakes.

Also underway is the Don’t Move a Mussel program, which has installed first-of-its-kind boat launch stencils in Peachland and West Kelowna — placing “Clean, Drain, Dry” messaging directly where boaters are most likely to see it. Expansion of the pilot is being explored across the Okanagan.

Upcoming Water Events in Kelowna

Two significant events are coming to Kelowna this fall that the business community should be aware of:

• Environmental Flows Conference 2026 co-hosted by the OBWB, the Okanagan Nation Alliance, and the Canadian Water Resources Association. A national gathering for water science, policy, and practice, October 7–9, 2026.
• NALMS Symposium “Swimming Upstream: Tackling Environmental Challenges through Partnership, Innovation, & Science” — the North American Lake Management Society Symposium. November 2–6, 2026.

These events bring national and continental expertise in water science to Kelowna at exactly the moment our valley needs those conversations most. The Chamber encourages members with interests in water, tourism, agriculture, and development to engage with these events.

The Kelowna Chamber closely follows the Okanagan Basin Water Board's work, the Water Stewardship Council, and sits on the Invasive Mussel Steering Committee. 

City Hall and the BC Chamber: Notes Worth Noting

Kelowna City Council — July 2026

Three items from July Council meetings stand out for Chamber members.

First, Council supported the creation of a new internally led, hybrid economic development function and directed staff to develop a transition plan to discontinue the City’s participation in the Central Okanagan Economic Development Commission. This is a significant structural shift. The Chamber will be engaged in understanding how this transition unfolds and what it means for business attraction, investment support, and regional collaboration going forward.

Second, Council received the City’s second annual Provincial Housing Targets report and directed staff to submit it to the Provincial Minister of Housing and Municipal Affairs. The report notes that Kelowna has exceeded its Year 3 provincial housing target, with 6,384 net new housing units completed since the Housing Target Order came into effect. This is genuinely good news, and it reflects the work of the development and construction industry. It also strengthens Kelowna’s standing in the provincial housing conversation — we are a city that is building.

Third, Council adopted changes allowing the North Glenmore Sector Plan to move forward to the Planning Framework stage. The 30-50 year plan estimate the area would accommodate 30K new residents and 13K new housing units. The Kelowna Chamber expressed its support to Council to move forward prior the public hearing.

BC Chamber of Commerce — Strategic Plan 2026–28

The BC Chamber has released its Strategic Plan for 2026–28, built on a simple insight: local chambers are woven into the economic life of their communities in ways that cannot be replicated from the centre. The BC Chamber’s role is to gather that local knowledge, synthesize it into a provincial picture, and carry it into provincial conversations.

For the Kelowna Chamber, this is an affirmation of the work we already do — and a signal that the provincial chamber is positioning itself to amplify it. We look forward to contributing to the listening framework, the policy process, and the interprovincial forums that the new plan envisions.

Municipal Spending: What the “Runaway Train” Report Means for Kelowna

The Business Council of British Columbia published an updated edition of its Policy Perspectives series in June, titled “The Runaway Train is Accelerating.” The report extends an earlier 2025 analysis and is worth the attention of every Chamber member who pays a municipal property tax bill, because it puts hard numbers behind something our members have been telling us anecdotally for years: local government costs are rising faster than the population and inflation they are meant to track.

The Provincial Picture

The headline figure is stark. Between January 2010 and May 2026, property taxes on owner-occupied housing in BC rose by 110 percent, roughly double the national increase and more than double BC's own overall consumer price inflation over the same period. The report attributes this largely to growth in municipal operating spending, which is principally funded through property tax.

Looking at operating budgets directly, the analysis covers 153 BC municipalities from 2010 to 2024 and finds that 135 of them, or 88 percent, grew real, inflation-adjusted spending faster than their population grew. Across the full period, the report estimates cumulative “excess spending” — spending beyond what population growth and inflation would justify — at roughly $6.5 billion province-wide, or about $1,280 per resident. And the trend is accelerating: average annual excess spending has grown from about $128 million in the 2011–14 electoral cycle to roughly $800 million in the current cycle to date, a more than sixfold increase. Metro Vancouver Regional District shows a similar, though smaller, pattern, with operating spending up 97 percent against 31 percent population growth and 36 percent inflation.

How Kelowna and West Kelowna Compare

The report's municipality-by-municipality appendix gives us a useful local data point. Over 2010–24, Kelowna's real per capita operating spending grew at a compound annual rate of about 1.6 percent, while the city's population grew faster, at about 2.3 percent — meaning Kelowna is one of the minority of BC municipalities where spending did not outpace population growth over the period. West Kelowna's experience was different: real spending growth of roughly 3.8 percent per year against population growth of about 1.8 percent, a gap of two percentage points annually that compounds meaningfully over a decade and a half.

We want to be careful with this comparison. A single ratio of spending growth to population growth doesn't tell us whether residents are getting better service, whether a municipality is investing in infrastructure a growing city needs, or whether some categories of cost (policing, protective services, and insurance premiums, in particular) are rising for reasons well outside any council's control. The report itself flags protective services as the single largest driver of excess spending province-wide. Still, the comparison is a useful discipline check, and it is the kind of number our members should expect their municipal councils to be able to explain.

What the Report Recommends — and What We Think

The report's authors make three recommendations: that municipalities anchor operating spending growth to population growth and inflation, providing clear public justification when they propose to exceed that benchmark; that the province re-establish independent oversight by extending the BC Auditor General's mandate to municipalities and regional districts; and that Metro Vancouver's governance be reformed given its board is not directly elected.

The Chamber has not taken a formal position on each of these specific recommendations, but the broader direction is consistent with what our members ask for consistently in pre-budget conversations with local and provincial government: a clear, published link between spending growth and the population and cost pressures that justify it, and independent value-for-money oversight of how local tax dollars are spent. We will be watching whether these recommendations gain traction provincially, and whether Kelowna City Council chooses to publish spending-growth benchmarks of its own.

Labour Supply: Federal Immigration and the Temporary Foreign Worker Program

For members in tourism, hospitality, agriculture, and construction, access to labour remains one of the most persistent operating constraints in the Okanagan. A federal update circulated to Regional Immigration signatories – of whom the Kelowna Chamber is one – in mid-July gives us a clearer picture of where the Temporary Foreign Worker Program (TFWP) stands, and it is a picture of significant contraction.

A Program in Contraction

The federal government's annual TFWP statistics for fiscal year 2025–26 show approved positions falling sharply across most streams compared with the prior year. The High-Wage stream approved roughly 29,300 positions, down 21 percent year-over-year, with approved Labour Market Impact Assessments (LMIAs) down 42 percent. The Low-Wage stream saw approved positions fall to about 42,000, down 21 percent, with LMIAs down 50 percent. The Global Talent Stream, used heavily by tech employers, dropped 28 percent on both measures. Primary Agriculture, the stream most relevant to Okanagan tree fruit and wine operations, was comparatively stable, down only about 0.1 percent in approved LMIAs — though even a flat agriculture stream sits inside a program that is contracting everywhere else, which will concentrate pressure on employers who depend on it.

A Provincial Divide on the Federal Offer

One item from the update is directly relevant to how provinces are choosing to respond to labour shortages outside major centres. Ontario's Labour Minister recently confirmed that the province will not take up a federal offer to increase the ratio of temporary foreign workers permitted in employers' workforces in underserved areas outside major population centres, a decision that drew public disappointment from at least one Ontario mayor. BC has not, to our knowledge, made a comparable public statement on the same federal offer. Given how frequently our members in the Okanagan describe labour availability as a binding constraint — a theme that runs through our agriculture reporting elsewhere in this issue — we think this is worth watching, and the Chamber will look into whether BC has been offered the same flexibility and how the province intends to respond.

Processing Times and Compliance

LMIA processing times have lengthened for both the high-wage and low-wage streams, which will be felt directly by members already navigating the program. Three streams saw processing times improve, most notably the permanent residence stream, where wait times fell by roughly two weeks. On the enforcement side, the federal government reports 1,488 compliance inspections completed between April 2025 and March 31, 2026, with 12 percent of inspected employers found non-compliant. Monetary penalties issued to non-compliant employers more than doubled year-over-year, from $4.5 million to just over $10.2 million, and 30 employers were banned from accessing the program entirely. Members using the TFWP should expect continued scrutiny and should ensure documentation and workplace conditions are audit-ready.

A Public Health Note

Separately, the federal government has issued guidance to employers and temporary foreign workers about communicable disease precautions, with a specific spotlight on measles, in light of ongoing measles activity in Canada and internationally. Members with TFWP employees should review this guidance and ensure new arrivals are aware of vaccination and reporting expectations.

Local Procurement: Are BC and Kelowna Companies Getting a Fair Shot?

The Chamber received an anonymous letter this month from someone identifying themselves as a General Manager at a BC general contracting firm, raising a question that deserves a fair hearing rather than a quick dismissal: on major publicly funded construction projects in this region, are BC and Canadian companies getting a meaningful opportunity to compete for the work, particularly on structural and fabrication packages?

This is a question our Kelowna Chamber Policy Advisory Committee first heard about earlier this year, from several members in manufacturing and space planning/product procurement.

A Letter, Not an Allegation

We want to be precise about what this letter is and is not. It is anonymous, its factual claims about specific projects have not been independently verified by the Chamber, and the author is explicit throughout that they are not alleging wrongdoing by any contractor, consultant, owner, or public agency named. The letter's stated concern is about the design of procurement processes generally, not about the competence or legitimacy of any company that has won work under those processes. We are treating it in that spirit: as a prompt for a policy question, not as a set of proven facts.

The underlying question is a legitimate one for a Chamber that represents the construction, trades, and manufacturing employers in this region: when public money builds public infrastructure here, how much weight does the procurement process give to the local and provincial economic activity — employment, apprenticeships, supplier spending, tax revenue — that stays behind after the ribbon is cut? Does the same issue around procurement policy pertain to privately funded projects?

Why This Matters for Procurement Policy

The letter also flags that some of the projects it discusses use an Integrated Project Delivery (IPD) model, which structures collaboration between owners, designers, and contractors differently than traditional design-bid-build tendering, and may change how individual trade packages are opened to competitive bidding. That is a fair technical point and one worth understanding better: if IPD delivery changes how or whether local subcontractors and fabricators get a look at a bid package, that is a procurement design question the City, the Regional District and other public owners in this region should be able to answer clearly.

The Chamber is not in a position to adjudicate individual contract awards, and we won't speculate about companies named in an anonymous letter. What we can do is ask the questions on our members' behalf: how are major publicly funded contracts in this region evaluated, what consideration is given to local and provincial economic benefit, and can public owners tell us how much of this taxpayer-funded work is staying within BC and Canada? These are questions our Policy Advisory Committee is raising in the community. We will report back.

The Chamber represents 1,000 member businesses across the central Okanagan.

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