Several business and industry groups came together Tuesday to call on the B.C. government to scrap plans to expand the provincial sales tax to certain professional services.
Representatives from the Greater Vancouver Board of Trade, the Canadian Federation of Independent Business, the Urban Development Institute, and other groups representing the construction and mining industries spoke at a joint press conference Tuesday morning.
The NDP government’s 2026 budget, tabled on Feb. 17, features a record $13.3 billion deficit for 2026–2027, while total taxpayer-supported debt is set to approach $143 billion.
The province said in the budget it plans to expand the PST to services such as accounting and bookkeeping, geoscientist and engineering services, commercial real estate fees, and security and private investigation services. The expanded PST would take effect on Oct. 1.
Finance Minister Brenda Bailey said the changes would generally align B.C. with other provinces.
“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,” she told reporters Tuesday.
The budget estimates the impact of the measure on taxpayers will be $261 million in the upcoming fiscal year, rising to $564 million by 2028–2029.
Bailey pointed to other measures the province is proposing to attract private investment, including a new manufacturing and processing investment tax credit. The province also announced Tuesday a proposed $400-million B.C. Strategic Investment Fund that would allow the government to co-invest in private-sector projects.
Bridgitte Anderson, president of the Greater Vancouver Board of Trade, said the expanded PST is a step in the wrong direction.
“We have had a week to digest Budget 2026 and it’s clear, this government and the business community are not on the same page,” said Anderson.
She said B.C.’s PST policies are among the least competitive in Canada.
Alberta, Yukon, Northwest Territories and Nunavut do not have a provincial sales tax and are only subject to the five per cent GST.
Of the four provinces that charge a provincial sales tax, only Quebec has a higher rate than B.C., at nearly 10 per cent.
Other provinces have HST rates between 13 and 15 per cent.
Anderson said that unlike the GST, B.C.’s PST is not refundable for businesses.
“This means every time a service is taxed during a project, that cost is baked in and then taxed again, leading to higher final prices for consumers,” she said.
Ryan Mitton of the Canadian Federation of Independent Business said the changes will raise the cost of security for restaurants and stores, and the cost of basic paperwork and accounting for small businesses.
“PST compliance and paperwork is one of the most time-consuming forms of red tape we hear about from entrepreneurs,” said Mitton. “But instead of making it easier for them, the government has chosen to expand the provincial sales tax to even more businesses.”
Mike Drummond, interim president of the development industry group the Urban Development Institute, said the new tax comes amid difficult market conditions for the sector.
“New applications are down. Project launches are down. Projects that were economically viable two and three years ago no longer are,” he said.
Drummond said that in the case of an average 300-unit rental building, the expanded PST would add about $275,000 in upfront construction costs and $20,000 in additional annual operating costs.
“And because income-producing buildings are valued on net operating income, roughly $500,000 is lost in asset value,” he said.
Michael Goehring, CEO of the Mining Association of British Columbia, called the decision “disappointing.” He said it means higher costs for mine operators, mine development projects, and smelters.
The B.C. government has positioned the mining industry as a key part of its “Look West” economic strategy. The plan includes a target to have four new critical mineral mines or expansions in operation by 2032.
“Government has made progress on permitting, but the new PST hike will hinder efforts to grow BC’s mining industry. It’s one step forward, two steps back,” said Goehring.
He said the added PST will slap early development projects that are already facing high technical and feasibility study costs with millions in added expenses.
Todd Stone, president of the Association of Mineral Explorers of B.C., said $750 million was spent on mineral exploration in B.C. in 2025. He said the PST would have added $16 million in costs to those projects.
“Government needs to get out of their own way and start backing up their words about mineral exploration and mining,” said Stone.
Premier David Eby acknowledged Tuesday that the expanded PST would be an additional burden on businesses, while pointing to the broader labour-market benefits of improved services like childcare and healthcare.
“The budget tried to find that balance between recognizing that our economy has shifted increasingly toward service provision, and we have to be able to have revenue fund public services as well as supporting businesses going forward,” Eby said.
He said B.C. is supporting the mining sector through efforts like reduced permitting times and expanding the North Coast Transmission Line to power projects in the north.
He rejected suggestions from Anderson and other business leaders that the province consider reinstating a harmonized sales tax.
“The answer is no,” Eby said. “Layering an additional level of tax on British Columbians right now is a non-starter.”
B.C. eliminated the 12 per cent HST after voters rejected it in a 2011 referendum.
Gavin Dew, B.C. Conservative MLA for Kelowna-Mission and economic development critic, said the PST measure shows the province is out of touch with working families, small businesses and taxpayers.
