B.C. set to expand PST to professional services Oct. 1 despite committee call for repeal

Accounting, security and some real estate services are among those affected; engineering, architecture and geoscience face different tax treatment

B.C. is set to expand the provincial sales tax to several professional services beginning Oct. 1, including accounting, security and some real estate services. Taxable architectural, engineering and geoscience services will also be affected under separate rules.

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VICTORIA — British Columbia is still preparing to expand the provincial sales tax to several categories of professional services on Oct. 1, despite a legislative committee recommending the province repeal the change.

The expansion, announced in Budget 2026 and subsequently enacted in law, will make accounting and bookkeeping services, architectural services, engineering and geoscience services, security and private-investigation services and specified non-residential real estate services subject to PST. Provincial regulations setting out exemptions and other details are also now in place.

The change does not mean every professional service in B.C. will suddenly be subject to a seven-per-cent tax, as some social-media posts warning about the Oct. 1 deadline have suggested.

Exactly how much PST applies depends on the type of service and whether an exemption applies.

Accounting services, including bookkeeping and assurance services, are among the services being brought into the PST system, along with security services and specified non-residential real estate services such as trading, rental property management and strata management services.

Taxable architectural, engineering and geoscience services are treated differently. The seven-per-cent PST applies to 30 per cent of the taxable purchase price, producing an effective tax of 2.1 per cent on the taxable portion of the bill.

For example, the province says $100,000 in fully taxable engineering or geoscience services would result in $2,100 in PST. Some types of engineering, architectural and geoscience work are exempt, so the tax will not necessarily apply to an entire project or invoice.

The expansion is expected to bring substantial new revenue into provincial coffers.

Budget 2026 estimates the professional-services change will generate $261 million in 2026-27, when it will be in effect for six months of the fiscal year. The province projects revenue of $534 million in 2027-28 and $563 million in 2028-29.

The tax measures were introduced as the province confronts a projected $13.3-billion deficit in 2026-27. Budget 2026 projects that deficit will fall to $12.2 billion in 2027-28 and $11.4 billion in 2028-29.

When the budget was released in February, the province said expanding the PST base would raise revenue needed to protect health care, education and other public services. It also argued taxing the affected professional services would generally bring B.C. more closely in line with the way sales taxes apply in other provinces.

The measure has faced sustained opposition from business organizations.

That opposition gained new weight Aug. 11, when the legislature's Select Standing Committee on Finance and Government Services recommended that the government repeal the planned PST expansion to professional services.

The committee includes government and opposition MLAs. Its recommendation does not change the legislation or stop the Oct. 1 implementation date, but business organizations including the Canadian Federation of Independent Business and Greater Vancouver Board of Trade have called on the province to follow it and reverse course.

CFIB said more than 3,500 small businesses had signed its petition opposing the expansion as of Aug. 11.

The organization has also pointed to a February survey of 439 CFIB members who own independent businesses in B.C. Eighty per cent of respondents opposed expanding PST to professional services and 72 per cent said they were likely to pass some or all of the additional costs on to customers. The survey was of CFIB members and was not a representative poll of all B.C. businesses or the general public.

The Oct. 1 tax changes extend beyond professional services.

PST exemptions are also being removed from clothing patterns, yarn, natural fibres, synthetic thread and fabric commonly used to make or repair clothing. Services to clothing and footwear will generally become taxable as well, although services to protective clothing and footwear remain exempt.

Dry-cleaning, wet-cleaning and laundry services will also remain exempt.

Basic cable television, residential landline telephone and toll-free telephone services will lose their PST exemptions on the same date.

The professional-services provisions are no longer simply a budget proposal. The Budget Measures Implementation Act, 2026 received Royal Assent April 16, and the province has since completed regulations governing the new tax rules.

The government had also indicated after the committee recommendation that it did not intend to abandon the changes. In a statement reported Aug. 13, then-finance minister Brenda Bailey said the government had “no plans to stop these changes.”

Bailey left the Finance portfolio the following day as part of a cabinet change after announcing she would take leave for cancer treatment. Josie Osborne was appointed finance minister effective Aug. 14.

As of Aug. 17, there has been no change to the province's published implementation schedule. B.C.'s tax guidance continues to state that the professional-services expansion takes effect Oct. 1, and the province was still updating detailed guidance for affected businesses as recently as Aug. 13.

Unless the province changes course before then, affected businesses will have to begin applying the new PST rules this fall — even as the legislature's finance committee is recommending the government repeal them.