PST tax hike threatens competitiveness, safety, and affordability
VANCOUVER, B.C. — Today, business leaders representing key pillars of B.C.’s economy called on the Province of British Columbia to scrap the newly announced expansion of the Provincial Sales Tax (PST) to a wide range of professional services, including accounting, engineering, architectural, security, and commercial real estate services. The expansion would apply the 7% PST broadly, with a partial 30% tax base applied to architectural, engineering, and geoscience (AEG) work.
Budget 2026 also confirmed a planned $80 billion increase in the debt over three years and a record $13.3-billion deficit for 2026–27. The signatories below have released the following statement:
“B.C. cannot afford policies that raise input costs, discourage investment, and weaken our competitive position. B.C.’s PST is already the most uncompetitive sales tax in Canada, and Budget 2026 doubles down. This expansion creates a massive new administrative burden and a ‘tax on a tax’ for every project.
While the government says they want safe streets, they are taxing security services and punishing small businesses for trying to protect their stores from theft and vandalism. Public safety concerns have driven many businesses to hire additional security to operate safely, and this ill-advised change effectively penalizes them for trying to manage a challenge they did not create. Taxing property management and leasing services will effectively hike rent for every local retailer, making it even harder for downtown storefronts to keep their lights on.
Instead of following through with their promises to accelerate housing construction and meet their own targets, the government, through Budget 2026, is choosing to raise the cost of homebuilding. Taxing the essential services needed to build homes, including the new levy on architectural and engineering work, is a direct hit to affordability and project viability. It could not come at a worse time as housing projects are being shelved and cancelled all across B.C. as market conditions deteriorate.
Similarly, while the government says they want to accelerate major projects, Budget 2026 taxes the services required to permit and build those projects. B.C. will become a more costly jurisdiction to invest in, putting investment, jobs, and trade diversification goals at risk.
We urge the government to scrap these PST changes. British Columbia is facing an uncertain future, and we cannot tax our way to prosperity by targeting the essential services that build our homes, protect our streets, and grow our economy.”
Signatories
Association of Consulting Engineering Companies British Columbia
Association of Mineral Exploration – British Columbia
British Columbia Chamber of Commerce
British Columbia Real Estate Association
BOMA
Business Council of British Columbia
BC Council of Forest Industries
Canadian Federation of Independent Businesses
CBRE
Greater Vancouver Board of Trade
Independent Contractors and Businesses Association
Mining Association of British Columbia
Mining Suppliers Association of BC
NAIOP – Vancouver Chapter
Retail Council of Canada
Save Our Streets Coalition
Surrey & White Rock Board of Trade
Urban Development Institute
Facts
Administrative costs will be significant. Thousands of businesses will have to register for PST and pay to manage two entirely different tax systems with different rules and filing deadlines. CFIB estimates these costs at up to $7,000 per year per employee.
PST is a “tax on a tax.” Unlike the GST or HST, B.C.’s PST is not refundable for businesses. This means every time a service is taxed during a project, that cost is baked in and then taxed again at the next stage, leading to higher final prices for consumers.
B.C.’s PST is already the least competitive in Canada. In Alberta, there is 0% PST. In Ontario and Quebec, businesses get their sales tax refunded. In B.C., that money is a permanent loss to the business’s bottom line, and ultimately a cost to consumers.
Budget 2026 adds over $4.0 billion in new taxes on businesses and workers while still projecting a record $13.3 billion deficit.
For the first time, businesses must pay a 7% tax just to keep their staff and property safe. This punishes shopkeepers who are already spending thousands to combat rising theft and vandalism.
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