[hhw]

There's no such tax on 'passive income', it's just taxed as business income, which is exactly what it is and taxed no higher than employment income. It's just not taxed as capital gains nor has dividend tax credits, which it shouldn't be/have.

The only tax that discourages renting out is that the portion of your principal residence used for renting out no longer qualifies for tax-free capital gains.

Considering how almost nobody in BC ever declares this, and barely anything is done to curb it, it's kind of a moot point.