In a recent letter to the Minister of Finance, CPB Canada voiced strong concerns regarding the proposed expansion of the Provincial Sales Tax (PST) to cover professional bookkeeping and accounting services. We emphasized the significant burden this policy would impose on small businesses. We urged the government to either exempt these services or, at a minimum, conduct a consultation period to address the issues.
On April 20, the Minister’s Office responded to CPB Canada, reaffirming its commitment to the policy and declining to reconsider its stance.
Key takeaways from the Minister’s response include:
- The government maintains that the PST expansion aligns with practices in other provinces and addresses BC’s historically narrow sales tax base.
- The PST expansion is set to proceed, with accounting services, including bookkeeping and assurance, becoming taxable as of October 1, 2026.
- Unequal Treatment: Although architectural, engineering, and geoscience services receive a partial tax exemption, no such consideration is granted for bookkeeping services.
- The government countered CPB Canada’s concerns about the financial impact on small businesses by looking the other way and citing measures they believe will offset business costs (i.e., increasing the employer health tax exemption, the venture capital tax credit, etc.).
Implications for Members:
Members offering bookkeeping services in BC will be required to register for PST collection, which may create challenges in maintaining affordability for clients. Small and micro businesses that depend on external expertise are likely to experience increased financial strain.
The government’s response indicates limited willingness to reconsider or modify the policy, despite its potential long-term economic consequences for small businesses.
Next Steps:
CPB Canada will continue to advocate for an exemption or, at the very least, a consultation period to address the unique challenges faced by small businesses and bookkeeping professionals.
We remain committed to supporting our members and upholding the principles of a fair and thriving business environment.
Response E-mail from the British Columbia Minister of Finance:
Dear Rick Johal and Melissa Lenos:
Thank you for your email sent on February 25, 2026, regarding applying the Provincial Sales Tax (PST) to accounting services. We appreciate you taking the time to share your ideas and feedback.
Since the PST’s introduction in 1948, BC’s economy has shifted significantly towards services, which have largely remained untaxed under the PST. BC currently has the narrowest sales tax base of all Canadian provinces that have a sales tax.
Budget 2026 announced that effective October 1, 2026, the PST will apply to:
- accounting services, including bookkeeping and assurance services;
- architectural services;
- engineering and geoscience services;
- rental property and strata management services related to non-residential real estate, and commissions related to buying and selling non-residential real estate; and
- security services, including private investigation services.
The PST on architectural, engineering, and geoscience services will apply to 30 per cent of the purchase price of the services subject to the tax.
Expanding the tax to these services is generally consistent with how tax applies to these services in most provinces. Additionally, the goods and services tax/harmonized sales tax (GST/HST) applies to more services than the Budget 2026 changes.
We understand there are costs to businesses. Government has taken action to reduce costs for businesses, including increasing the employer health tax exemption threshold from $500,000 to $1 million starting in 2024, and increasing the small business venture capital tax credit budget and annual limit to encourage investment in eligible small businesses.
Additionally, despite the removal of the carbon tax on April 1, 2025, government chose to maintain many of the carbon tax’s revenue neutrality measures, including for businesses. These include:
- the reduction in the small business corporate tax rate from 2.5 per cent to 2 per cent;
- the increase to the small business corporate tax threshold from $400,000 to $500,000; and
- the PST exemption for non-residential electricity.
Thank you again for taking the time to write. We appreciate your support and input on how we can build a better BC.
Sincerely,
Office of the Minister
