A B.C. legislature committee made up of government and opposition MLAs is calling on the province to scrap its planned expansion of the provincial sales tax to professional services.
Finance Minister Brenda Bailey said the government has no plans to stop the changes, which take effect Oct. 1.
Six MLAs on the Select Standing Committee on Finance and Government Services held consultations in communities across the province in June to collect input on next year’s budget.
The committee’s report recommends repealing the planned PST expansion to professional services to “simplify and streamline taxation systems.”
The government’s 2026 budget, tabled in February, said the PST would apply to services such as accounting and bookkeeping. Architectural services, engineering and geoscience services, non-residential real estate services and security services, including private investigations, would also be subject to the tax.
The PST expansion drew concerns from business and industry groups when it was announced. They said it would mean higher costs for everything from retail security to mining development.
“This is a time where, unfortunately, we all have to look at areas that we can increase revenue during very challenging times economically, and this was one of those decisions,” Bailey said of the PST expansion at the time.
Budget 2026 forecasts a $13.3 billion deficit for the 2026-27 fiscal year.
The finance ministry said the PST base expansion for professional services is expected to increase annual revenues by about $261 million this fiscal year and well over $500 million in the following two years.
The Canadian Federation of Independent Business said it told the committee that 80 per cent of respondents to its survey opposed the expansion and 72 per cent would likely pass the cost on to consumers.
“A multi-party committee has recognized what small businesses have been saying for months: stop this tax grab,” said Ryan Mitton, B.C. director of legislative affairs for the CFIB. “Expanding the PST to essential professional services will add more than $500 million in annual costs onto B.C. businesses and consumers at a time when few can afford it.”
The B.C. Conservatives are also backing calls to halt the PST expansion.
“The government needs to listen and scrap this tax hike,” said finance critic Peter Milobar. “The PST expansion was the move of a government that is desperate for cash. But you don’t fix B.C.’s finances by making it more expensive to run a business, build a home or even make or repair your own clothes.”
The budget also removes PST exemptions for some materials and services used to make or repair clothing.
In a statement, Bailey thanked the committee for its recommendations.
“Not only do the planned updates to PST generally align us with other provinces’ sales taxes, they also help to protect health care, education, and other core services people rely on. We do not have any plans to stop these changes,” she said.
Bailey said the province has introduced other measures to support businesses, including a $400 million strategic investment fund and a new 15 per cent tax credit for manufacturing. She said businesses are also saving money following the elimination of the consumer carbon tax in 2025.
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