B.C. Premier David Eby says the province is delaying a previously announced PST expansion to professional services until after a U.S. trade dispute ends.
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The B.C. government says it is pausing a controversial planned expansion of the provincial sales tax to professional services, which had been scheduled to begin Oct. 1.
Premier David Eby said the change will be delayed until after Canada’s trade war with the United States is over, describing the decision as a way to give businesses “breathing room” while they navigate tariffs and bans and look for other markets.
Eby said, “There’s a time to stay the course and there’s a time to adjust,” and argued that delaying the tax changes well after the U.S. trade conflict ends will help firms manage economic pressure.
Under the expansion announced in the last provincial budget, several professional services that are currently exempt from collecting PST would have been subject to the tax starting Oct. 1. The list described by the province includes accounting and bookkeeping, architectural and engineering services, geoscientist services, commercial real estate fees, and security and private investigation services.
The government said the pause will be welcome for small businesses across the province that rely on those services. It also indicated that the original PST shift was intended to bring B.C. in line with how other provinces tax similar services.
The policy has been criticized since it was announced in February. Chris Gardner, president and CEO of the Independent Contractors and Businesses Association, argued the move would increase costs for construction and ultimately be reflected in project budgets, saying “slapping PST on engineering, architecture, and professional services” is not “clever tax policy” and functions as a hidden construction tax.
Gardner’s comments, reported at the time of the original announcement, also suggested that contractors would incorporate the tax into their pricing and that people paying for housing would bear the cost.
Alongside the PST expansion, B.C. had also announced a separate measure in the February budget: a new temporary 15 per cent manufacturing and processing investment refundable tax credit for businesses investing in buildings, machinery, and equipment used in manufacturing and processing.
The pause means the tax treatment for the identified categories of professional services will remain unchanged for now, while the province waits for the trade dispute to conclude before implementing the broader PST expansion.
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