Key business leaders across B.C., including those in engineering, are calling on the provincial government to scrap the newly announced expansion of the provincial sales tax (PST) in Budget 2026. The expansion will hit a wide range of professional services, including accounting, engineering, architectural, security, and commercial real estate services.
A 7 per cent PST will be applied broadly and a partial 30 per cent tax base applied to architectural, engineering, and geoscience (AEG) work, effective October 2026.
Budget 2026 also confirmed a planned $80 billion increase in the debt over three years and a record $13.3‑billion deficit for 2026–27.
A joint statement said: “B.C. cannot afford policies that raise input costs, discourage investment, and weaken our competitive position. B.C.’s PST is already the most uncompetitive sales tax in Canada, and Budget 2026 doubles down. This expansion creates a massive new administrative burden and a ‘tax on a tax’ for every project.”
According to the B.C. Construction Association, the expansion of PST to architectural, engineering, and related professional services will add real cost to virtually every project in B.C. Professional services typically represent 8–15 per cent of total project value. Applying PST to those fees adds an estimated 1–2 per cent to overall project budgets.
For schools to hospitals – projects that can cost upwards of $100M to $1B, these are additional, unnecessary costs ranging from $1-10 million.
These costs will reduce project scope, extend timelines as budgets are revised, or get absorbed back into the public purse. This risks undermining the Budget’s capital commitments. At a moment when the province is trying to stretch infrastructure dollars as far as possible, adding cost friction at the front end of the project delivery pipeline works against that goal.
Budget 2026 tables or defers decisions on several significant healthcare capital projects, including long‑term care facilities and the Burnaby Hospital redevelopment. This will reintroduce uncertainty into an industry that relies on long‑term visibility to function efficiently.