British Columbia announces big changes to Provincial Sales Tax (PST)

On February 17, 2026, the British Columbia provincial government announced in its 2026 budget, various proposed changes with respect to PST.

General overview of proposed changes

Effective October 1, 2026, PST is proposed to expand to the following professional services:

• Accounting services, including bookkeeping and assurance services
• Architectural services – only applicable on 30 percent of the purchase price
• Engineering and geoscience services – only applicable on 30 percent of the purchase price
• Non-residential real estate services, including trading services, rental property management services, and strata management services
• Security services, including private investigation services

As a general reminder, under the current Provincial Sales Tax Act, only professional legal services are taxable for PST purposes in the province of British Columbia.

How are similar professional services taxed in other provinces?

While the changes to how certain professional services as outlined above will be taxed has only just been proposed in British Columbia, by comparison, most of these services are generally already subject to sales tax in the provinces of Manitoba and Saskatchewan, as outlined in the chart below. Note that there are exceptions.

As noted above, Manitoba currently does not tax non-residential real estate services, including trading services, rental property management services, and strata management services. In contrast, Saskatchewan does tax a variety of real property-related services provided to commercial properties, including real estate commission fees (with some exceptions).

Businesses operating across multiple provinces in Canada should be aware of how sales tax may apply in any province where they carry on business or have customers, given that there are legislative differences to provincial sales tax among British Columbia, Manitoba, and Saskatchewan which can result in different sales tax obligations.

Overall impacts of proposed PST changes

The proposed changes will significantly impact how certain businesses operate, as further outlined below.

Registration requirement

In general, the registration requirement threshold for B.C. PST purposes is very low, and most businesses located in B.C. with taxable sales will have a requirement to register.

Businesses located outside of B.C. should also be aware of a potential requirement to register for B.C. PST if certain registration requirement criteria are met.

Accordingly, if the proposed legislation becomes law, any businesses offering the above-noted professional services will likely have a requirement to register for PST and will be required to start charging and collecting PST on their applicable taxable sales as of October 1, 2026.

System and process updates

If a business has a requirement to register and will be required to start charging and collecting PST as of the effective date, it must ensure that its internal processes and procedures are properly updated to reflect these changes.

This would include, but is not limited to, updates to point-of-sale or accounting software to ensure PST is being charged and reported on applicable taxable sales. Training and updating staff on the changes will also be necessary so they are aware of the updates and can field questions from customers. Finally, businesses must ensure that any supporting documentation such as invoices or sales receipts is updated or amended to reflect the new information requirements. 

For example, when invoices are being prepared which include taxable goods and/or services and non-taxable goods and/or services, care must be taken to assess how PST applies to each good or service.

Understand potential exemptions

Businesses will also need to be aware of potential PST exemptions that may be available to certain customers or clients, and how to meet the exemption requirements, including necessary supporting documentation. While specific exemptions relating to these newly taxable services are not yet known, two main exemptions that exist currently in the legislation relate to certain sales made to First Nations and purchases for resale.

Example

Professional services purchased by a First Nations individual or band would generally be exempt from PST if the professional services relate to real property situated on First Nations land or the services are performed on First Nations land. Sellers generally must obtain certain supporting documentation to support providing an exemption and must keep these records in the case of an audit.

Understand self-assessment rules

Anyone purchasing the above professional services and certain other goods and services will also have to understand the self-assessment rules, generally applicable if a supplier has not charged PST when they should have, or in some cases where the goods and services are purchased out-of-province.

Generally, if PST is applicable on a taxable sale and the seller does not charge and collect PST, there is an obligation placed on the buyer to self-assess and remit the PST directly to the province. We have provided two examples below.

Example 1

A corporation located and operating in B.C. acquires commercial real property management services from a local B.C. firm and is issued an invoice on October 31, 2026. The property management firm inadvertently fails to charge the corporation PST on these services. Since these services will be subject to PST after October 1, 2026, and since the property management firm has not properly charged and collected PST, the corporation is required to self-assess and remit the PST on this purchase. The property management firm also has a liability to correctly charge the tax and is still subject to audit exposure.

Example 2

An organization located and operating in B.C. purchases private investigative security services in respect of its B.C. operations from a business located in Alberta on November 15, 2026. The Alberta business is not registered for and does not charge the B.C. business any PST in respect of the security services. The B.C. business would be required to self-assess and remit PST since they are a B.C. resident and purchased security services outside of B.C. that relate to its B.C. operations.

What comes next?

It is important to note that these proposed PST changes are not yet law and are subject to the budget legislation receiving Royal Assent.

However, with a proposed effective date of October 1, 2026, it is important for businesses who are impacted by these changes to start considering the overall effect the change will have on their operations as explained in detail above.

How can we help?

We understand it can be overwhelming to interpret and understand the proposed updates and new PST measures. These changes have already sparked various questions, especially given the limited information available at this point in time.

Our Indirect Tax Team is here to help businesses navigate these changes, assist with next steps, and provide regular updates as the legislation evolves and as new information becomes available.

For more information, contact your local MNP Tax advisor.