BC's PST Expansion: What Every Business Needs to Know

Budget 2026 expanded BC's Provincial Sales Tax (PST) to cover professional services for the first time, including things like accounting, security and engineering. These are services that almost every business in BC relies on. The BC Chamber of Commerce is here to break down what changed, why it matters, and what we think should happen next.

What's Actually Changing?

Historically, BC's PST has applied primarily to goods (products you can touch and buy). Starting October 1, 2026, the PST will expand to cover a range of professional services for the first time:

• Accounting and bookkeeping services (7% PST on the full service fee)
• Architectural services (7% PST applied to 30% of the service fee)
• Engineering and geoscience services (7% PST applied to 30% of the service fee)
• Security and private investigation services (7% PST on the full fee)
• Rental property and strata management services (7% PST on the full fee)
• Non-residential real estate commissions (7% PST on the full fee)

Service providers in these categories will need to register for PST (even if they're not currently registered), with registration opening April 1, 2026, ahead of the October 1 effective date.

Why These Services?

BC's sales tax has traditionally applied to goods, not services. But the government's rationale is that the economy has shifted. More of what businesses buy today is service-based, and many of those services have never had provincial tax applied. Budget 2026 broadens the tax base to capture that activity.

Why Businesses Are Concerned

This is the part that catches a lot of people off guard, and it's the crux of why BC's business community is concerned.

With the federal GST and HST systems used in other provinces, businesses can recover what they pay through input tax credits. The idea is simple: the tax is ultimately paid once, by the end consumer. Any business that pays GST or HST on a service along the way can claim it back. It doesn't pile up.

BC's PST doesn't work that way. It's non-refundable, meaning every time PST is charged on a service, that cost is permanent and unrecoverable. And because it can't be claimed back at each stage, costs compound. This is what people mean when they call it a "tax on a tax."

Here's a simple example. Say you run a retail shop in Smithers. You hire a bookkeeper to manage your accounts. Starting October 1, that service now carries a 7% PST charge that your bookkeeper passes on to you. You can't claim it back. It's a straight cost increase to your business. If you also pay for security services to protect your store, that's taxed too. Neither cost is recoverable. They just stack.

In Alberta, there is no provincial sales tax at all. In provinces like Ontario and Nova Scotia using HST, businesses can recover what they pay. Even in Quebec, businesses can claim their tax back. BC, Saskatchewan and Manitoba are among the few provinces where this tax is permanent and unrecoverable — and BC's expansion is one of the most aggressive in recent years.

The BC Chamber's Position

We understand the fiscal context. The province is projecting a $13.3 billion deficit, and broadening the tax base is one tool for addressing that. But the way BC's PST is structured creates a real problem for businesses, which is where our concern lies.

We are hearing this from members across the province, and we want to be clear: this is not just a big-city issue. From an independent accountant in Kelowna to a retailer on main street in a small town, to a major company managing infrastructure projects across multiple regions, the impact is being felt everywhere. The businesses that keep local economies running are the ones absorbing these costs, and many of them are already under significant pressure.

The BC Chamber of Commerce signed a joint business statement with 18 other major industry associations calling on the provincial government to reconsider this expansion. Our position is straightforward: expanding a non-refundable tax on essential business services increases costs at a time when businesses are already under pressure and competing nationally for investment. We support tools that help the province address its fiscal challenges, including the Strategic Investment Fund. But raising structural costs through a non-refundable tax is not the right approach.

We are actively engaging with government on behalf of BC Chamber members, and we'll continue to update you as this develops. The PST changes still require Royal Assent (the formal step where the Lieutenant Governor signs the legislation into law) before they take effect. That window remains open, and there is still an opportunity for the province to act on the business community's concerns.

What Should You Do Right Now?

• If you provide newly taxable services: Begin preparing to register for PST. Registration opens April 1, 2026, six months before the changes take effect.
• Review your contracts: PST applies based on when services are performed, not necessarily when they are invoiced or agreed upon. Timing matters.
• Model the cost impact: For businesses relying heavily on accounting, engineering, or security services, it's worth estimating the annual cost increase now.
• Engage with us: Your local chamber of commerce is your channel. Share how this affects your business. Member voices shape our advocacy.