Getting an engineer, accountant, or security guard in British Columbia may not become more expensive after all, at least for now…

Earlier this year, BC’s Budget 2026 confirmed that starting on October 1, 2026, PST would apply at the rate of 7% to five categories of professional services previously not subject to PST. These services included: (i) accounting (including bookkeeping and assurance), (ii) architectural services, (iii) engineering and geoscience services, (iv) security and  private investigation services, and (v) non-residential real estate services such as trading, rental property management, and strata management. Architectural, engineering, and geoscience services were also to receive a partial break, as PST would have applied to only 30% of the purchase price of those services, resulting in an effective tax rate of 2.1%.  

Since its introduction in 1948, BC’s PST has applied mainly to the sales of goods. However, with the province’s move towards a more service-based economy, the proposed expansion represented a real structural shift that would have brought BC closer to how other provinces with sales taxes treat services.

For now, however, implementation of those changes has been put on hold.

The Proposed Expansion

 The proposed expansion stems from Bill 2, the Budget Measures Implementation Act, 2026, which amends the Provincial Sales Tax Act to bring these five professional services within the 7% tax base. The BC Ministry of Finance followed up with a Notice 2026-001 to spell out registration obligations for the affected services. Although the expansion had been scheduled to take effect on October 1, 2026, the Province has since announced that implementation will be paused through a temporary regulation.

Practical Implications for Businesses

The Province’s announcement means that the planned October 1, 2026 implementation date will no longer proceed. As a result, the affected professional services will remain exempt from the additional PST for the time being.

Had the expansion taken effect as proposed, purchasers of accounting, bookkeeping, security and private investigation services, and non-residential real estate services would generally have been required to pay an additional 7% PST, subject to certain discounts available for  architectural, engineering, and geoscience services.

The delay is significant because, unlike GST, PST generally cannot be recovered through input tax credits. Accordingly, the proposed expansion would have increased costs for many businesses, developers, and property owners that heavily rely on such services.

The pause also postpones the implementation of related compliance obligations for affected service providers. Had the expansion proceeded as planned, affected businesses would have been required to register for PST, update invoicing practices, and collect and remit PST on newly taxable services.  

The Province has not announced a revised implementation date. However, it has indicated that the expansion is being delayed in response to ongoing trade disruptions and economic uncertainty.

What Businesses Should Do Now

While the October 1, 2026 implementation date has been postponed, businesses should not assume that the proposed expansion has been permanently withdrawn.

 Professional service providers may wish to continue reviewing whether their services fall within the scope of the proposed rules and remain attentive to future announcements regarding implementation. Businesses purchasing these services should likewise remain aware that the proposal has been paused and could still be implemented at a future date.  

The pause also provides an opportunity for businesses to revisit pricing arrangements, service agreements, and long-term budgeting assumptions that were made in anticipation of the new PST obligations.

For the time being, however, the affected professional services will continue to be exempt from PST under the existing framework.  

Questions

If you have questions about the foregoing tax, please contact Elias Notopoulos, Anny Kim or another member of our Business Law Group.

Frequently Asked Questions

Disclaimer: This content is provided solely for informational purposes and is not intended for use in any legal proceeding. You should consult a qualified lawyer for advice tailored to your specific circumstances.

Sources

1. British Columbia, Ministry of Finance, Consumer Taxation Branch, Notice 2026-001: Notice to Providers of Professional Services (Victoria: Government of British Columbia, last updated 5 May 2026), online: <www2.gov.bc.ca/gov/content/taxes/sales-taxes/pst/publications/notice-professional-services>.
2. Budget Measures Implementation Act, 2026, Bill 2, 2nd Sess, 43rd Parl, British Columbia, 2026, online: <https://www.bclaws.gov.bc.ca/civix/document/id/bills/billscurrent/2nd43rd:gov02-1>, amending Provincial Sales Tax Act, SBC 2012, c 35.
3. Chartered Professional Accountants of British Columbia, “What BC’s New PST Rules Mean for Businesses”, CPABC Newsroom (July 2026), online: <https://www.bccpa.ca/news-events/cpabc-newsroom/2026/july/what-bc-s-new-pst-rules-mean-for-businesses/>.
4. Greater Vancouver Board of Trade et al, “PST Tax Hike Threatens Competitiveness, Safety, and Affordability”, Media Statement (24 February 2026), online: <www.boardoftrade.com/news/media-statement/pst-tax-hike-threatens-competitiveness-safety-and-affordability>.
5. Canadian Bar Association, Commodity Tax, Customs and Trade Law Section, Letter to the Honourable Brenda Bailey et al, “Recommendations to Reduce Significant Internal Trade Barriers (Sales Tax Harmonization)” (28 August 2025), online (pdf): <cba.org/CBA/media/PDFs/Our%20Impact/Submission/2025/25-44-eng.pdf>