B.C. manufacturers and industrial owner-operators may be able to reduce the effective cost of a new building, equipment installation or commercial property purchase through refundable tax credits, accelerated depreciation, government-backed financing and utility incentives. This guide explains which programs are currently available—and which ones actually apply to industrial real estate.

Last reviewed: August 8, 2026

BRITISH COLUMBIA – The cost of buying land, constructing an industrial building and installing production equipment can be substantial. For manufacturers, food processors, fabricators and other industrial businesses, the total project cost may include far more than the purchase price of the property.

Servicing, permitting, electrical capacity, environmental work, building systems, production equipment and working capital can all affect whether a project is financially viable.

The good news is that several provincial and federal programs may reduce the effective cost of an industrial expansion in British Columbia. The less encouraging news is that there are very few broad government grants that simply pay for industrial land or an existing warehouse.

Most available support comes through:

Refundable tax credits
Accelerated depreciation
GST recovery
PST exemptions
Utility incentives
Government-supported financing
Targeted grants and repayable contributions

For an owner-operator planning a new manufacturing building, these programs can potentially be combined as part of a broader capital strategy. However, the eligibility rules, corporate structure and timing of each expenditure matter.

What is the best current incentive for a B.C. manufacturer?

The strongest broadly available provincial incentive is the new B.C. Manufacturing and Processing Investment Tax Credit.

The program provides qualifying B.C. Canadian-controlled private corporations with a refundable tax credit equal to 15% of eligible expenditures incurred after March 31, 2026.

Eligible expenditures may include new:

Manufacturing and processing buildings
Electrical, plumbing and sprinkler systems
Heating, cooling and lighting systems
Elevators and other building components
Manufacturing machinery and equipment

A qualifying corporation can claim up to $2 million of eligible expenditures in relation to an eligible property, producing a potential maximum credit of $300,000. Associated corporations must share the $2-million limit. Official B.C. program details

The 15% rate applies to eligible expenditures incurred before April 1, 2031. The rate will then decrease by 2.5 percentage points annually until it reaches zero.

Who qualifies for the B.C. credit?

The claimant must generally:

Be a Canadian-controlled private corporation
Have a permanent establishment in British Columbia
Acquire the property after March 31, 2026
Use the property primarily to manufacture or process goods for sale or lease in B.C.
Claim the credit in the taxation year when the property becomes available for use

The property must be new. A building or piece of equipment will generally not qualify if it was used, leased or acquired for use before the corporation purchased it.

This makes the credit particularly relevant to an owner-operator constructing a new industrial facility or purchasing a newly completed industrial building that has not previously been occupied.

It is generally less useful for the acquisition of an older, occupied warehouse.

Can the credit be used by an industrial developer?

A conventional developer building speculative industrial space may have difficulty qualifying because the property must be used primarily for eligible manufacturing or processing operations.

A developer constructing a custom facility for its own manufacturing business—or using an appropriately structured property company and operating company—may have a stronger case, but the ownership and operating structure should be reviewed by a qualified tax advisor before land is acquired or construction begins.

The credit may also have to be repaid if the property is sold, removed from B.C. or converted to an ineligible use during the year of the claim or the following five taxation years.

Summary of industrial incentives available in B.C.

Program	Type of support	Potential benefit	Best suited to
B.C. Manufacturing and Processing Investment Tax Credit	Refundable provincial credit	15%, up to approximately $300,000	New manufacturing buildings and equipment
Federal manufacturing-building immediate expensing	Proposed tax deduction	Up to 100% first-year deduction	Buildings used at least 90% for manufacturing
Federal equipment immediate expensing	Accelerated depreciation	Up to 100% first-year deduction for eligible equipment	Production machinery and equipment
GST input tax credits	Tax recovery	Recovery of eligible GST	Taxable commercial purchases and construction
B.C. PST manufacturing exemption	Sales-tax exemption	Avoidance of applicable PST	Production machinery and qualifying equipment
BC Hydro custom incentives	Utility incentive	Based on energy savings	New plants, expansions and efficient equipment
FortisBC new-construction incentives	Utility rebate	Up to $800,000	Certain commercial and light-industrial buildings
Canada Small Business Financing Program	Government-supported loan	Up to $1 million in term financing	Smaller owner-occupied acquisitions
PacifiCan Regional Tariff Response Initiative	Repayable or non-repayable contribution	$200,000 to $10 million	Eligible businesses affected by trade disruption
BDC commercial real estate financing	Commercial financing	Project-specific	Property purchases and new construction

Federal immediate expensing for manufacturing buildings

The federal government has proposed a major tax incentive for manufacturing and processing buildings.

Under the proposed rules, an eligible taxpayer could deduct 100% of the cost of a qualifying manufacturing building in the first taxation year in which it is used for manufacturing or processing.

To qualify, at least 90% of the building’s floor area would generally need to be used for eligible manufacturing and processing activities.

The proposed schedule is:

100% deduction for buildings first used before 2030
75% deduction for buildings first used in 2030 or 2031
55% deduction for buildings first used in 2032 or 2033
No enhanced deduction after 2033

The measure would apply to eligible buildings acquired on or after November 4, 2025, including certain qualifying additions and alterations. CRA information

Important: this measure is not yet law

As of July 21, 2026, the manufacturing-building provisions are contained in federal Bill C-31.

Bill C-31 has completed second reading but remains at consideration in committee in the House of Commons. It has not reached report stage, third reading or Royal Assent. Parliament of Canada: Bill C-31 status

Businesses should therefore treat the building write-off as a proposed incentive, not an enacted benefit.

A project may be designed with the proposed rules in mind, but a purchase or construction decision should not rely on the deduction until the legislation is enacted and professional tax advice has been obtained.

Immediate expensing for manufacturing equipment

Federal immediate-expensing rules can also accelerate the deduction of qualifying manufacturing and processing machinery and equipment.

Budget 2025 proposed reinstating a 100% first-year deduction for qualifying manufacturing equipment acquired on or after January 1, 2025 and available for use before 2030, followed by a phaseout from 2030 through 2033.

These measures were included in Bill C-15, which received Royal Assent on March 26, 2026. Parliamentary summary of Bill C-15

This is not a refundable credit. It is a tax deduction, meaning its immediate value will depend on:

The company’s taxable income
The applicable corporate tax rate
The capital cost allowance class
When the equipment becomes available for use
Whether the business has sufficient income against which to claim the deduction

For a growing manufacturer with taxable income, accelerated depreciation may preserve substantial cash during the first years of a facility expansion.

Recovering GST on industrial real estate and construction

GST can be a major cash-flow item in a commercial property transaction.

A GST-registered company may generally claim input tax credits to recover GST paid or payable on property and expenses used in its commercial activities. This can include eligible costs associated with:

Purchasing taxable commercial real estate
Constructing a new building
Improving an existing industrial building
Leasing and operating commercial property
Professional and construction services

Recovery is limited to the extent that the property is used in taxable commercial activities. Mixed taxable and exempt uses may require an allocation. CRA: Input Tax Credits

For example, GST associated with a facility used entirely in a taxable manufacturing business may generally be recoverable. A portion used for GST-exempt activities may receive different treatment.

The transaction structure is particularly important when commercial property is held in a separate property company and leased to the operating business. Registration, lease documentation and the timing of input tax credit claims should be addressed before completion.

B.C. PST exemption for production machinery

British Columbia’s Production Machinery and Equipment exemption can eliminate PST on certain machinery and equipment used primarily and directly in qualifying manufacturing and processing operations.

Potentially eligible property can include:

Production machinery
Equipment incorporated into a production line
Replacement parts for qualifying equipment
Materials used to assemble qualifying machinery
Certain pollution-control and waste-management equipment
Certain affixed machinery that remains identifiable as production equipment

The exemption generally applies to machinery used primarily and directly in manufacturing—not to the land or ordinary industrial building shell.

Manufacturers may need to provide suppliers or contractors with the appropriate Certificate of Exemption – Production Machinery and Equipment.

This should be dealt with before the purchase order or construction contract is finalized. Trying to recover incorrectly charged PST after the project has been completed can be more difficult than structuring the purchase properly at the outset.

BC Hydro incentives for new plants and expansions

BC Hydro’s Custom Project Incentives can support energy-efficiency improvements, new plant designs and expansions to existing industrial facilities.

Eligible projects can include:

Efficient production equipment
Electrical-system improvements
Efficient electrification
Demand-management systems
Renewable electricity generation
Waste-heat recovery
Facility expansions that increase electrical use

BC Hydro calculates funding primarily according to the expected energy savings. Depending on the project, the incentive can cover eligible design, equipment, installation, disposal and tax costs, up to the program’s applicable limits.

A temporary 30% bonus applies to qualifying custom projects submitted between June 3, 2025 and February 11, 2027. Projects receiving the bonus must be completed by March 14, 2028.

Eligible industrial customers generally need projected electricity savings of at least 25,000 kWh annually. New facilities and expansions increasing site energy use by more than 10% can be eligible.

Approval should be pursued before equipment is ordered or construction commitments are made.

FortisBC commercial new-construction incentives

FortisBC Commercial New Construction Program offers rebates of up to $800,000 for certain high-performance commercial buildings.

Eligible incentives can include:

Capital incentives based on building area and energy performance
Up to 50% of eligible energy-modelling costs, to a maximum of $15,000
Up to 75% of mid-construction airtightness testing costs, to a maximum of $5,000

The program can cover certain light-industrial buildings, but it specifically excludes light-industrial buildings where manufacturing or industrial processes occur.

As a result, it may fit:

Distribution warehouses
Commercial storage facilities
Industrial-office buildings
Flex-commercial developments
Certain owner-occupied warehouse properties without active processing

It is less likely to fit a conventional manufacturing plant.

Federal Clean Technology Investment Tax Credit

An industrial owner-operator incorporating renewable energy or low-carbon equipment into a new development may qualify for the federal Clean Technology Investment Tax Credit.

The refundable credit can equal up to 30% of the capital cost of qualifying new clean-technology property acquired and available for use through 2033. The rate decreases to 15% in 2034.

Qualifying property can include certain:

Solar power systems
Wind and small-hydro systems
Stationary electricity-storage systems
Air-source and ground-source heat pumps
Non-road zero-emission vehicles
Charging and refuelling equipment
Waste-biomass energy systems

The credit applies to the qualifying clean-technology assets—not to the complete industrial building or the land.

Businesses manufacturing eligible clean technologies or processing specified critical minerals may instead qualify for the separate Clean Technology Manufacturing Investment Tax Credit, which can also provide a refundable credit of up to 30% on eligible property.

Canada Small Business Financing Program

The Canada Small Business Financing Program is not a grant. It is a federal risk-sharing program that can make it easier for an eligible small business to obtain financing from a participating bank or credit union.

Eligible businesses generally must have annual gross revenue of no more than $10 million.

A business may access:

Up to $1 million in term loans
Up to $150,000 in additional line-of-credit financing

Term financing may be used for:

Commercial land and buildings
Construction and modernization
Leasehold improvements
Equipment
Certain intangible assets and working-capital costs

For the purchase of existing real estate, the borrower must generally use at least 50% of the land or building for its own business operations. For new construction, financing is limited to the portion needed for the borrower’s operations. Program guidelines

A holding company that does not operate the business is generally not an eligible borrower under the program. This can create complications where a business owner intends to place the real estate in a separate property company.

BDC commercial real estate financing

The Business Development Bank of Canada’s commercial real estate financing can be used to:

Buy commercial land or buildings
Cover construction costs
Expand or renovate existing premises
Replenish working capital used for real estate expenditures

BDC financing is repayable and subject to underwriting. It does not reduce the project cost in the way a refundable credit or grant does.

Its potential advantage is financing flexibility. BDC may be able to structure principal postponements, longer amortization periods or working-capital support around a commercial construction or expansion project, subject to approval.

It may be particularly relevant where a project exceeds the Canada Small Business Financing Program’s $1-million term-loan limit.

PacifiCan Regional Tariff Response Initiative

The Regional Tariff Response Initiative is currently accepting applications from eligible B.C. businesses affected by tariff and trade disruptions.

Funding for commercial projects ranges from:

$200,000 to $10 million in repayable contributions
$200,000 to $1 million in non-repayable contributions

Eligible businesses generally must:

Be incorporated
Maintain staffed operations in B.C.
Employ between 10 and 499 full-time employees
Have operated continuously for at least three years
Demonstrate exposure to tariffs or trade disruption
Provide at least two complete years of externally prepared or reviewed financial statements

The program is intended to help businesses improve productivity, reduce costs, strengthen supply chains and diversify into new markets.

An ordinary commercial property purchase is unlikely to qualify by itself. However, an industrial expansion that includes automation, equipment, production improvements or supply-chain restructuring may have a stronger case.

Specialized funding for food-processing projects

Large food-processing and food-manufacturing projects may qualify for federal support through the Strategic Response Fund.

The current food-processing intake supports projects involving:

New domestic food-processing capacity
Modernization of existing facilities
Food manufacturing and packaging
Storage and distribution infrastructure
Supply-chain resilience
Critical food-system inputs

Available support ranges from $10 million to $50 million per project.

The first 2026 intake closes on August 4, 2026, with a second intake expected in fall 2026. Detailed application criteria

This program is intended for large, transformative projects rather than a typical small or medium-sized warehouse acquisition.

Programs worth monitoring

Several relevant programs are not currently accepting general applications.

B.C. Manufacturing Jobs Fund

The B.C. Manufacturing Jobs Fund has supported factory expansions, new production equipment and industrial modernization projects across the province.

Its general intake is currently closed, and no date has been established for another intake. Businesses can request placement on the program’s notification list.

PacifiCan Business Scale-up and Productivity

The Business Scale-up and Productivity Program provides repayable contributions of between $200,000 and $5 million for high-growth B.C. companies.

The program is not currently accepting applications, but future intakes could be relevant to manufacturers pursuing automation, commercialization or major productivity improvements.

Can these incentives be combined?

Some incentives may be combined, but government assistance can reduce the expenditure eligible for another program.

For example, the B.C. Manufacturing and Processing Investment Tax Credit requires eligible expenditures to be reduced by government and non-government assistance received or receivable in relation to the property.

The best approach is to divide the project budget into distinct categories:

Land
Base building and shell
Mechanical and electrical systems
Manufacturing machinery
Clean-energy equipment
Office and administrative improvements
Professional and soft costs
Working capital

Each category can then be reviewed against the available programs.

This is considerably more effective than completing the project and asking an accountant afterward whether any incentives are available.

Example: planning a new owner-occupied manufacturing facility

Consider a B.C. manufacturer proposing to acquire industrial land and construct a new production facility.

The project could potentially include:

A refundable B.C. credit on up to $2 million of eligible new building and equipment costs
Immediate federal expensing of qualifying production equipment
Potential federal immediate expensing of the manufacturing building if Bill C-31 is enacted
GST input tax credits on eligible construction and acquisition costs
PST exemptions for qualifying production machinery
BC Hydro funding for efficient equipment and electrical systems
A Clean Technology ITC for eligible solar, storage or low-carbon equipment
BDC or Canada Small Business Financing Program financing

The land itself would generally not qualify for depreciation because land is not depreciable property. Grants that directly reimburse an ordinary industrial land purchase are uncommon.

The building, building components and installed machinery therefore need to be properly identified and valued.

Questions to ask before buying industrial real estate

Before removing conditions on an industrial property, an owner-operator should consider:

Will the property be owned by the operating company or a separate property company?
Is the corporation a qualifying CCPC?
Will the property be new or previously used?
What percentage of the building will be used for manufacturing?
Does the operation meet the tax definition of manufacturing or processing?
Which expenditures belong to the land, building and equipment?
Is sufficient electrical capacity available?
Are utility incentives conditional on approval before construction?
Does the zoning permit the proposed operation?
Will grants or contributions reduce another credit?
Could a future sale or change of use trigger recapture?

Tax eligibility should form part of the real estate, financing and construction strategy—not be treated as a separate issue after the property has been purchased.

Finding industrial property for an owner-operated business

The best industrial property is not necessarily the lowest-priced building.

For a manufacturer, the right property may depend on:

Power supply and upgrade costs
Clear height and loading
Yard and outdoor-storage permissions
Environmental conditions
Zoning and permitted uses
Labour and transportation access
Expansion potential
Servicing and municipal development costs
Whether a new building could qualify for incentives unavailable on a used property

Remax Commercial Camosun works with owner-operated businesses and industrial developers purchasing, selling and leasing commercial property across British Columbia, with a focus on the Fraser Valley, Lower Mainland and Vancouver Island.

Businesses considering an expansion can also review our current commercial and industrial property listings.

A real estate search can then be structured around both operational requirements and the potential eligibility of the property.

Frequently asked questions

Are there grants for buying an industrial building in B.C.?

There are few broad grants that pay directly for the purchase of an ordinary existing industrial building. Government-supported financing, GST recovery, equipment incentives and accelerated depreciation are generally more applicable. Targeted grants may become available where the purchase forms part of a larger manufacturing, trade-resilience, clean-technology or food-processing expansion.

Can an owner-operator get a tax credit for constructing a new warehouse?

A plain distribution warehouse may not qualify for the B.C. Manufacturing and Processing Investment Tax Credit unless it is primarily used for qualifying manufacturing or processing activities. A purpose-built manufacturing plant, including qualifying building systems, may be eligible.

Does industrial land qualify for the 15% B.C. credit?

The provincial credit applies to qualifying buildings, machinery and equipment. The cost allocated to land does not qualify.

Can a previously occupied industrial building qualify?

The B.C. credit generally excludes property that was used before it was acquired. A used industrial building is therefore unlikely to qualify for the provincial refundable building credit. The proposed federal manufacturing-building write-off may use different rules, so a used building that is new to the buyer could potentially receive different treatment if the federal legislation is enacted and all other tests are met.

Does the federal 100% building write-off mean the government pays for the building?

No. Immediate expensing is a tax deduction, not a grant or refundable payment. The business deducts the eligible building cost from taxable income. The financial benefit depends on the business’s income, tax rate and ability to use the deduction.

Can a business receive both a grant and a tax credit?

Possibly, but assistance received from one source may reduce the expenditure eligible for another credit. The stacking rules must be reviewed for every program.

When should a business apply?

Utility and government contribution programs should generally be investigated before equipment is ordered, construction begins or binding commitments are signed. Tax credits may be claimed later, but the property, ownership, contracts, invoices and use of the building should be structured correctly from the beginning.

Final takeaway

There is no single program that eliminates the cost of purchasing or constructing an industrial property in British Columbia.

For the right owner-operator, however, several programs may work together:

The new 15% refundable B.C. manufacturing credit
Federal accelerated depreciation
GST input tax credits
PST-exempt production equipment
Clean-technology credits
BC Hydro or FortisBC incentives
Government-supported commercial financing
Targeted PacifiCan or industry-specific funding

The largest savings are likely to be available to businesses building new manufacturing space rather than purchasing a previously used warehouse.

Before acquiring land or committing to a building, the company should coordinate its real estate broker, accountant, lender, legal counsel, engineering team and utility provider. The location, corporate structure and construction budget can all affect which incentives survive once the project is completed. Commercial real estate decisions should be made only after appropriate independent due diligence and professional advice have been obtained.

Official sources and further reading

Industrial Construction Grants and Tax Incentives in British Columbia: A 2026 Guide for Owner-Operators