B.C. committee urges province to cancel PST expansion to professional services

B.C.’s Select Standing Committee on Finance and Government Services is urging the provincial government to repeal its planned expansion of the Provincial Sales Tax to professional services. The recommendation appears in the committee’s final report on 2027 budget consultations, which drew nearly 400 presentations and more than 1,100 written submissions.

The change remains scheduled for Oct. 1, 2026 unless David Eby’s government changes course. The 2026 budget proposed applying the seven-per-cent PST to accounting, bookkeeping and assurance services; security and private-investigation services; and various non-residential real-estate services. Architectural, engineering and geoscience services would also be taxable, with the tax applying to 30 per cent of their price.

The province has said the measure modernizes a tax system designed for a more goods-based economy. It projected additional revenue of $261 million in 2026-27, $534 million in 2027-28 and $563 million in 2028-29.

Business groups told the committee that the lack of broad input tax credits can cause PST costs to accumulate through supply chains. The Canadian Federation of Independent Business said 80 per cent of surveyed businesses opposed the expansion and 72 per cent expected to pass costs on to customers. The Greater Vancouver Board of Trade welcomed the committee’s recommendation, while the B.C. Conservatives also called for the change to be scrapped.

The recommendation is limited to professional services. It does not call for reversal of separate Oct. 1 changes removing exemptions for certain clothing-making materials and services, basic cable, toll-free telephone services and residential landlines. The committee also recommended raising the luxury-vehicle threshold for higher PST rates and changing PST treatment of rental vehicles.