August is about wildfires. Displaced businesses, evacuated residents, negative impacts on tourism, and smoke in the air for everyone. Municipalities are examining policy responses, as are our provincial and federal counterparts. Calls for a national policy — and a national waterbomber fleet — are growing louder. Meanwhile, the drought continues, driven in part by a high-pressure system parked over the Rockies that has sent flooding rain and tornadoes to Alberta instead. We could use some of that weather here in the Okanagan. Kelowna residents & businesses alike have pitched in with a broad range of supports.
There are several other stories in motion this month as well. Let's get into it.
INFLATION UP, BUT GDP LOOKING BETTER THAN EXPECTED
Gas prices pushed Canada's inflation rate up to 3% in recent weeks, but the broader economic picture is more encouraging. The Canadian Chamber of Commerce's Business Data Lab reports that retail sales rose 1.0% to $73.7 billion in May — a fifth consecutive monthly increase. Core retail sales climbed 0.9% and real sales volumes were up 0.3%, meaning Canadians are buying more, not simply paying more.
The gains were broad-based: all nine retail subsectors posted increases in May. General merchandise and sporting goods retailers each recorded their first increase in three months. British Columbia led all provinces with growth of 2.1%. Card-spending data from the Business Data Lab's Business Sales Tracker shows nominal spending accelerated to 5.9% year-over-year in May, and Statistics Canada's advance estimate points to a further increase in June. The note of caution: with tariffs and global energy prices still unsettled, households appear to be weighing bigger purchases carefully. You can read Andrew DiCapua’s analysis here (Principal Economist, Business Data Lab, Canadian Chamber) here; it includes data from all provinces. Inflation returns to 3% as prices at the pump rebound - Business Data Lab
Retail sales have now risen for five straight months — a sign of resilience even as gas prices push headline inflation higher.
GLIMMER OF HOPE THAT PST EXPANSION REPEAL MIGHT MAKE IT INTO THE FALL BC PROVINCIAL BUDGET
Last week, the Select Standing Committee on Finance and Government Services released seven recommendations for the Province's 2027 budget. We welcome the committee's recommendations, particularly Recommendation 5, which calls to repeal the Province's proposed expansion of the PST to professional services.
Since this measure was first announced, our members have consistently raised concerns about the impact of this tax on business investment, competitiveness, and affordability across British Columbia. This recommendation reflects those concerns. We spoke to this directly with visiting NDP ministers a few weeks ago, and we also included the exemption ask in our submission to the committee.
The Legislature will need to act quickly as the PST changes are set to take effect October 1, likely in advance of tabling the full Budget 2027.
KELOWNA CHAMBER FORMS WATER TASK FORCE TO HELP MEMBERS BETTER UNDERSTAND WATER CHALLENGES IN THE VALLEY
The Okanagan is now in its fourth consecutive year of drought, with snowpack, precipitation, and reservoir levels well below normal. The Regional District of North Okanagan has already imposed a mandatory 70% reduction in agricultural water use in the Greater Vernon Water service area, a cut growers have identified as an orchard-survival threat.
Closer to home, Kelowna City Council approved a resolution on July 27 reducing the annual water allotment for agricultural customers on the City's non-potable system, with service shutoffs authorized for customers who exceed their reduced allotment or fail to comply. The change directly affects southeast Kelowna, where roughly 337 agricultural customers and 300 small irrigation services — irrigating about 2,000 hectares — rely on the McCulloch Reservoir System, which peaked at only 70% capacity this spring due to low snowpack and below-normal rainfall.
And on August 6, the City moved to Stage 2 water restrictions, a step the BMID (Black Mountain Irrigation District took on August 14.
In response, the Chamber has set up a Water Task Force. Our draft position calls on regional districts, municipalities, and the province to adopt proportional and transparent water allocation frameworks; accelerate investment in drought resilience infrastructure; treat agricultural water security as an economic priority; take a balanced, data-informed approach to the housing-water debate; and support practical conservation incentives across all sectors. The Task Force is now working to quantify the local economic impact — crop loss, revenue at risk, and employment at risk — through a member survey before the position statement is finalized.
Water scarcity should inform development decisions — not become a blanket rationale to halt all growth.
DEFENCE PROCUREMENT FORUM
The Kelowna Chamber, alongside collaborators, is planning an early-November forum for members and other businesses interested in defence procurement. The half-day event will feature a panel and speakers on the subject, and will provide tools for getting involved — and being successful — in government bidding.
The Defence Procurement Forum is a business event led by the Kelowna Chamber of Commerce, in partnership with the Central Okanagan Economic Development Commission and the Okanagan Manufacturing Network, with support being secured from BDC, BDO LLP, PacifiCan, KF Aerospace, Okanagan College, and YLW International Airport.
The Forum is a powerful local response to the federal government's plan to scale Canadian defence spending to 5% of GDP, representing up to $150 billion in annual investment. It is intended to help Okanagan businesses understand this shift and identify opportunities within it — both for companies already positioning for federal procurement and those exploring how to become approved suppliers for the first time. MP Stephen Fuhr, Secretary of State (Defence Procurement) for Canada, is an enthusiastic supporter of the Forum, and schedules permitting, will be on hand. Date to be confirmed shortly.
WILDFIRE IMPACT ON BUSINESS
New polling from Pollara Strategic Insights, “Canadian Perceptions: Wildfire Response,” is available for review through DeHavilland Aircraft of Canada at https://dehavilland.com/wp-content/uploads/2026/07/DeHavilland-Public-Perception_May-2026-Report-FINAL.pdf
What One Okanagan Business Is Saying
Barry Yeo, owner of Bliss Bakery & Bistro in Peachland, has gone public with the economic toll the Bald Range wildfire is taking on businesses that never suffered physical fire damage. With evacuation orders, alerts, and a collapse in tourism traffic during what is normally his busiest month, Yeo reports sales down 60–75%, cut staff hours, and thousands of dollars in spoiled inventory — with no insurance claim available, since his building itself was never touched by fire. He is calling on government for an Emergency Wildfire Economic Recovery Program: emergency grants tied to documented revenue loss, wage and payroll assistance, and working-capital support for affected businesses. “Our building didn't burn,” he says. “Our market did.”
DON’T FORGET, THE MUNICIPAL ELECTIONS ARE COMING!
TRADE US/CANADA
Candace Laing, President and CEO of the Canadian Chamber of Commerce, and a member of the Canada-U.S. Economic Relations Advisory Committee, issued this statement over the weekend of August 22/23 after the trade negotiations with the US broke down:
"With the current state of Canada-U.S. trade talks and the potential implications, we find ourselves in new and uncharted territory in the trade relationship and as a country overall. We need to be ready to lead as a strong, united front through a time of crisis and potential transformation.
"As I shared in my most recent statement, Canadian businesses have shown remarkable resilience under immense pressure, and they will not relent now. This will get tougher, but we know Canada can navigate it, if we’re united. The reason our economy has been so strong is in no small part because of the choices businesses have made in the last year and a half. As Canada’s largest business association, we will be mobilizing our network of businesses in all regions and all sectors to brace for impact and make the best of a bad situation.
"Our Prime Minister shared details regarding the breakdown of talks in the last day of negotiations. While we anticipate an eventual path that concludes in a review of CUSMA and constructive discussions on our broader shared interests, it is not in our immediate interest to return to the bargaining table. As such, we turn our focus and attention to our response, which most importantly includes proactive and protective measures for our businesses, workers and families.
"The Prime Minister’s Canada-U.S. Economic Relations Advisory Committee was convened over the weekend and we also met with Minister Joly to discuss our next steps. Our Chamber Network is being asked to play an important role in ensuring the supports offered reach the businesses that need it. We have done this before and proven, such as during the pandemic, that we are not only highly capable but well situated as a national network of chambers of commerce and boards of trade to deliver high value in a time like this."
Chambers across the country issued statements of support and Canadians and Canadian businesses, expressed support for turning down a "bad deal, which is worse than no deal". Some rough times lie ahead, but Canada's sovereignty remains intact.
FEDERAL BUDGET INPUT – PROVINCIAL BUDGET UPDATE
You can share your thoughts or complete a questionnaire through the Department of Finance Consultations Portal until September 8: canada.ca – Pre-Budget Consultations 2026.
The Budget Update from the Provincial government August 17 noted the projected $11 billion deficit is now “just” $7.7 billion.
The tobacco settlement ($2.6 billion) will flow into BC’s coffers over a number of years, but has been counted all at once for 2026, giving the deficit a revenue surge. Delayed projects already committed to were also cut from the budget update, as spending is pushed to a later date.
The deficit remains massive at $7.7 billion; largest on record. Every British Columbian is now paying $800/year for debt servicing of the deficit.
The government might find savings, according to the Fraser Institute, if provincial government employment was cut. In the past ten years, the population of BC grew by 19.6%. Government hiring grew by 54%.
Matching hiring (cutting current jobs) to population growth could save between $12.2 billion-$13.2 billion.
Yes, that would completely retire the deficit. So, there is one way to help end the fiscal failure.
The BC Provincial Budget report is due “on or before November 15, 2026.” We're all watching to see which recommendations from the Select Standing Committee on Finance make the final cut. And if steps are taken to reduce the onerous deficit. Stay tuned.
REBATE IN FREIGHT COSTS FOR SHIPPING CANADIAN STEEL
SOME OTHER DATES OF NOTE
- Municipal Elections: Saturday, October 17
- Canadian Chamber of Commerce National Conference & Policy Forum: October 27–29, Empress Hotel, Victoria https://chamber.ca/events/agm-convention/
- Defence Procurement Forum: November 3, 4 or 5 (half day session including panel & break-out topic tables). Date will be confirmed shortly by the Kelowna Chamber.
- Kelowna Chamber Policy Development Forum: Wednesday, November 25, 7:30 a.m.–10:00 a.m., Sandman Hotel, Kelowna https://www.kelownachamber.org/events
MUSSEL DETECTION RESEARCH
TWO KELOWNA POLICIES RECEIVE FULL ENDORSEMENT IN CANADIAN CHAMBER COMMITTEE REVIEW
Draft policies for consideration at the October 27–29 conference in Victoria have been greenlighted to go to the policy floor for adoption: “Countering the Cost of Crime on Canadian Small Business” and “Powering Canada's Future: The Urgent Need for Electricity Capacity Growth to Support Housing Construction and Data Centre Development.” An enormous amount of research went into writing both policies, plus several months of consideration and defence in front of the national policy review committees.
Both are now ready for delegates' consideration and also, have gained the support of chambers across the country. We're very pleased with the work to date and look forward to hearing the policies presented at the conference.