Business leaders resist hike they say threatens B.C. home building, affordability

Bridgitte Anderson, president and CEO of the Greater Vancouver Board of Trade (courtesy: Greater Vancouver Board of Trade).

A coalition of B.C. business groups is asking the provincial government to cancel its planned expansion of the Provincial Sales Tax (PST) to professional services, arguing the hike will drive up costs and further strain housing construction.

In a joint statement released this week by the Greater Vancouver Board of Trade responding to Budget 2026, the signatories — including the British Columbia Real Estate Association (BCREA) — said the changes would make it more expensive to build homes and operate businesses across the province.

The budget expands the seven per cent PST to services such as accounting, engineering, architectural, security and commercial real estate services. Architectural, engineering and geoscience work would be subject to a partial 30 per cent tax base. 

Budget 2026 projects a record $13.3-billion deficit for 2026-27 and an $80-billion increase in debt over three years.

‘Tax on a tax’ concerns

The business groups said the move will raise input costs and weaken B.C.’s competitive position.

They said the expansion would create “a massive new administrative burden and a ‘tax on a tax’ for every project.”

Unlike the GST or HST, B.C.’s PST is not refundable for businesses, according to the statement. “This means every time a service is taxed during a project, that cost is baked in and then taxed again at the next stage, leading to higher final prices for consumers,” it says.

Impact to housing supply and affordability

Taxing the essential services needed to build homes, including the new levy on architectural and engineering work, “is a direct hit to affordability and project viability,” reads the statement.

“It could not come at a worse time as housing projects are being shelved and cancelled all across B.C. as market conditions deteriorate.”

The groups also warned the changes would make B.C. a more costly place to invest, putting jobs and major projects at risk.

“British Columbia is facing an uncertain future, and we cannot tax our way to prosperity by targeting the essential services that build our homes, protect our streets, and grow our economy.”