BC Tax Expansion Faces Growing Opposition as October 1st Deadline Nears
New Leger poll finds two-thirds of British Columbians want planned PST expansion cancelled, while businesses warn of higher costs and a legislative committee calls for repeal
British Columbia’s planned expansion of the provincial sales tax is facing mounting opposition from taxpayers, businesses, industry organizations and a multi-party legislative committee, with the new tax rules scheduled to take effect October 1.
A new Leger poll commissioned by the Canadian Taxpayers Federation (CTF) found that 66 per cent of British Columbians want the provincial government to cancel the expansion, compared with 15 per cent who support proceeding with it. Another 19 per cent were undecided. Among respondents who expressed an opinion, 82 per cent favoured cancelling the changes.
The polling comes less than two months before the expanded tax is scheduled to take effect and shortly after the B.C. legislature’s Select Standing Committee on Finance and Government Services recommended that the government repeal the planned expansion.
Despite the recommendation, Finance Minister Brenda Bailey has said the government intends to proceed.
What is changing October 1?
The B.C. government’s 2026 budget expands the province’s 7 per cent PST to several professional and commercial services that have historically been exempt.
Beginning October 1, PST will generally apply to:
- Accounting and bookkeeping services
- Architectural services
- Engineering and geoscience services
- Security and private investigation services
- Non-residential real estate services, including certain property and strata management services
There are special rules for architectural, engineering and geoscience services. Rather than applying the 7 per cent tax to the entire purchase price, PST generally applies to 30 per cent of the value, producing an effective tax rate of 2.1 per cent on those services.
The province is also removing or narrowing some existing exemptions affecting products and services including clothing repair materials, clothing and footwear-related services, basic cable television and landline telephone services.
The government says the changes bring B.C.’s tax treatment more closely into line with other provinces.
Poll shows broad opposition
The Leger survey commissioned by the CTF suggests opposition is not concentrated in one particular political, demographic or geographic group.
According to the CTF, opponents of the expansion form a majority across gender, age and regional categories.
Vancouver Island residents, women and British Columbians aged 55 and older recorded the strongest opposition, according to the organization’s release.
The headline results were:
| Response | British Columbians |
|---|---|
| Cancel the PST expansion | 66% |
| Proceed with the expansion | 15% |
| Unsure | 19% |
Because the poll was commissioned by the Canadian Taxpayers Federation, the results should be understood as commissioned polling rather than a government survey. Nevertheless, the findings add another data point to a debate that has already generated significant opposition from business organizations.
Businesses have been warning about higher prices
The Canadian Federation of Independent Business conducted its own survey earlier this year involving 439 B.C. business owners.
The February survey found that 80 per cent of respondents opposed expanding the 7 per cent PST to professional services.
Even more significantly, 72 per cent said they were likely to pass some or all of the additional tax costs on to customers.
The CFIB said accounting and bookkeeping services were identified as the professional services most likely to negatively affect small businesses, followed by property management, security and architectural, engineering and geoscience services.
The implication is straightforward: while the tax may technically be charged to a business purchasing a service, the eventual economic cost can be distributed through the broader economy.
A business paying PST on accounting, security, engineering or property-management services may incorporate those additional expenses into its operating costs, potentially affecting prices charged to customers.
Security services become taxable
The inclusion of security services has generated particular criticism from businesses in communities dealing with property crime.
The Business Improvement Areas of B.C. has argued that the expansion effectively taxes businesses for purchasing security services they increasingly consider necessary to protect employees, customers and property.
In Kelowna, local business representatives told Global News that businesses were already spending heavily on security because of repeated property crime and other safety concerns.
That creates an unusual policy tension: governments and communities encourage businesses to invest in security, while the provincial tax system is simultaneously adding a 7 per cent tax to many of those services.
The issue has become one of the central arguments made by opponents of the expansion.
Business groups launch “Stop the Squeeze” campaign
The Greater Vancouver Board of Trade has organized a campaign called Stop the Squeeze, arguing that the tax expansion will increase the cost of doing business at a time when B.C. companies are already facing high operating costs.
The organization says the expanded PST could affect the cost of building homes, operating businesses, maintaining security and attracting investment.
The campaign has attracted support from a wider coalition of business organizations.
The Business Council of British Columbia has also called for the expansion to be scrapped, arguing that the tax increases input costs and could weaken B.C.’s competitive position.
The B.C. Chamber of Commerce has taken a similar position, while advocating for a longer-term move toward a value-added tax system rather than expanding the existing PST.
Why businesses object to the PST structure
One of the more technical arguments against the expansion involves the way B.C.’s PST works.
Unlike a value-added tax such as the GST/HST, the PST generally does not provide businesses with broad input-tax credits.
That means taxes paid on business inputs can become part of the cost of producing another good or service.
The Business Council of B.C. argues this can cause taxation to compound through supply chains and contribute to higher effective costs for investment.
The B.C. Chamber has made a similar argument, saying the province should consider moving toward a value-added tax with input tax credits rather than expanding the current PST.
The distinction is important because opponents aren’t necessarily arguing that sales taxes should never apply to professional services.
Some are instead arguing that the structure of the tax is the problem.
Accountants warn of implementation complications
The accounting profession has also raised concerns about how the new rules will work.
The Chartered Professional Accountants of British Columbia says the final regulations released in July provided additional clarity regarding issues such as multi-jurisdictional work, corporate-group services and resale arrangements.
Under the new rules, accounting services performed in B.C. will generally become subject to the 7 per cent PST unless a specific exemption applies.
CPABC has advocated for longer-term sales-tax modernization, including consideration of a value-added tax model with general input tax credits.
That position is significant because it demonstrates that opposition to the government’s approach extends beyond organizations that simply oppose taxation.
Some professional organizations are instead arguing for a different tax structure that they believe would be less distortive.
Housing industry joins the opposition
The B.C. real estate industry has also warned that expanding the PST could work against the province’s housing objectives.
The British Columbia Real Estate Association recommended that the province not proceed with the PST expansion, arguing that taxation policy can affect the financial viability of development projects and ultimately the pace at which new housing reaches the market.
This adds another dimension to the debate.
The province is simultaneously attempting to increase housing supply while imposing additional taxes on some of the professional services involved in developing and managing that housing.
Architects, engineers, property managers and other professionals can all play a role in construction and development projects.
Critics argue that additional taxes on those inputs could ultimately become another cost incorporated into development budgets.
Legislative committee calls for repeal
Perhaps the most politically significant development came from the B.C. legislature’s Select Standing Committee on Finance and Government Services.
Following its 2027 budget consultation, the multi-party committee recommended that the provincial government repeal the planned PST expansion to professional services.
The committee’s recommendation was framed partly around simplifying and streamlining the province’s taxation system.
The committee includes MLAs from government and opposition parties, making the recommendation notable even though it does not itself force the government to change policy.
The recommendation was welcomed by organizations including the CFIB and Greater Vancouver Board of Trade.
Ottawa isn’t responsible for this tax
The debate is entirely provincial.
The PST is administered by the Government of British Columbia, not Ottawa.
The upcoming changes were included in B.C.’s 2026 budget and are being implemented through provincial tax legislation and regulations.
That distinction matters because the argument over the expansion is ultimately about how the B.C. government chooses to raise revenue and structure its tax system.
The government’s case
The B.C. government has defended the expansion as part of its broader approach to taxation and public services.
The province says expanding PST to professional services generally brings B.C. more closely into line with how other provinces treat those services.
The government is also dealing with a significant fiscal challenge.
B.C.’s 2026 budget projected a $13.3-billion deficit for 2026-27, while the new tax measures are expected to generate approximately $1.4 billion over three years, according to government figures reported in connection with the budget.
The government’s argument is that additional revenue is necessary to help maintain core public services, including health care and education.
Finance Minister Brenda Bailey has indicated that the government is not planning to reverse the expansion, despite the legislative committee’s recommendation.
That puts the government directly at odds with both the committee recommendation and several major business organizations.
A $1.5-billion tax question
The CTF estimates that the PST expansion will cost British Columbians nearly $1.5 billion over three years, while government budget reporting has put the expected revenue at approximately $1.4 billion over the same period.
The difference illustrates one of the fundamental disagreements in the debate.
The province views the expansion primarily as a source of revenue.
Opponents view it as a cost that will be absorbed by businesses, consumers and the broader economy.
Both can occur simultaneously: government can collect additional revenue while businesses and households bear additional costs.
The economic question is therefore what happens to that money after it moves through the tax system—and whether the resulting public-service benefits outweigh the economic costs associated with higher prices and business inputs.
October 1 deadline approaches
With the implementation date now less than a month away, businesses providing or purchasing affected services are preparing for the changes.
The province has released detailed guidance covering accounting, architectural, engineering and geoscience, security and non-residential real estate services.
Businesses affected by the changes may need to determine whether they must register for PST, collect the tax, remit it to the province or self-assess tax on certain purchases.
That makes the issue more than a political debate.
For affected businesses, the October 1 date represents a concrete change to invoices, accounting systems and operating costs.
The larger issue: how should B.C. tax business?
The disagreement over the PST expansion ultimately goes beyond the individual services being taxed.
It raises a broader question about how British Columbia should structure its tax system while attempting to improve productivity, increase housing supply, attract investment and maintain public services.
The CTF says the answer is to cancel the expansion.
Business groups have called for its repeal and, in some cases, a longer-term transition toward a value-added tax.
The B.C. government argues the expansion broadens the tax base and provides revenue for essential public services.
Meanwhile, the province’s own multi-party finance committee has recommended that the expansion be repealed.
And according to the new Leger poll commissioned by the CTF, 66 per cent of British Columbians surveyed want the government to cancel the changes, compared with 15 per cent who want them to proceed.
Unless the government changes course, however, the new rules remain scheduled to take effect October 1, 2026.
For British Columbians, the debate is now moving from whether the tax expansion is a good idea to a much more immediate question:
Will the province proceed with a tax increase that its own legislative finance committee has recommended cancelling, despite growing opposition from taxpayers and the business community?
