B.C. legislative committee recommends scrapping planned PST expansion on professional services

B.C.'s legislative Select Standing Committee on Finance has recommended the provincial government repeal a planned expansion of the Provincial Sales Tax to professional services, citing concerns that the tax would embed costs across business operations.

The recommendation came in the committee's final report on consultations for the 2027 budget, released August 13. The committee received nearly 400 presentations and more than 1,100 written submissions over recent months and included the repeal recommendation among 81 total recommendations.

Under the changes announced in the 2026 budget and scheduled to take effect October 1, 2026, the seven per cent PST would be extended to accounting services (including bookkeeping and assurance), security and private investigation services, various non-residential real estate services, and architectural, engineering and geoscience services (though at only 30 per cent of the price for those services).

The provincial government argued the expansion modernizes a tax system built when the economy focused primarily on goods rather than services. The 2026 budget estimated it would generate an additional $261 million in the 2026/2027 fiscal year, $534 million in 2027/2028, and $563 million in 2028/2029.

Business groups have strongly opposed the measure. The Chartered Professional Accountants of British Columbia told the committee the tax structure raises costs and discourages investment. The Tax Executives Institute recommended replacing B.C.'s PST entirely with a Harmonized Sales Tax, though the committee did not recommend that shift.

The Greater Vancouver Board of Trade welcomed the committee's recommendation to reverse the expansion.

The committee's recommendation does not itself cancel the tax changes. The expansion remains scheduled to take effect October 1 unless Premier David Eby's NDP government changes course before that date.