Business and public safety advocates are sounding the alarm that the British Columbia government's decision to expand the provincial sales tax to essential professional services could have devastating consequences for small businesses across the province. The new tax measures, which take effect October 1, will apply PST to up to 30 percent of costs for services including bookkeeping, security, architectural services, engineering, rental and strata management, and geoscience services.
Mounting Financial Pressure on Struggling Enterprises
Ryan Mitton, B.C. legislative director for the Canadian Federation of Independent Business, expressed grave concerns about the timing of these tax changes. "There's been an outpouring of frustration, because the No. 1 thing businesses didn't need going into this budget was another new tax," Mitton stated. He emphasized that businesses are already grappling with the economic downturn and rising incidents of theft and property crime, making this additional financial burden particularly challenging.
Mitton highlighted that many small businesses are spending thousands of dollars monthly on security services alone. "A seven per cent increase is a huge hit when your bill is in the tens of thousands of dollars," he explained. Beyond the direct financial impact, the complicated nature of PST compliance creates another layer of administrative burden that small business owners must navigate, often requiring additional time for paperwork that ultimately increases costs passed to consumers.
Real-World Impact on Business Owners
Caren McSherry, owner of Gourmet Warehouse on East Hastings in Vancouver, provided concrete examples of how these changes affect local businesses. She currently spends over $7,000 monthly to maintain security coverage seven days a week at her establishment. While her business is large enough to absorb these costs temporarily, she expressed deep concern for smaller operations.
"I've voiced my opinions so many times, and it falls on deaf ears, and pretty soon, there won't be any more privately owned businesses left because they haven't got the wherewithal to survive," McSherry lamented. She noted that many of her colleagues have already been forced to close their businesses due to mounting pressures. "The climate in B.C. is not favourable to business," she concluded.
Government Response and Public Safety Concerns
The B.C. government has defended the tax expansion as bringing the province in line with other jurisdictions, arguing it maintains competitive parity. However, critics question whether this justification adequately addresses the unique challenges facing British Columbia's small business community.
Although the government allocated an additional $139 million for public safety in this year's budget, Jess Ketchum of the Save Our Streets Coalition argues this funding falls short of addressing the scale of security challenges businesses face. The coalition maintains that businesses need substantive support to manage security costs rather than additional taxation that compounds their financial strain.
Advocates emphasize that small businesses form the backbone of British Columbia's economy and communities. They warn that without reconsideration of these tax measures, the province risks losing vital enterprises that contribute to local employment, community character, and economic diversity. The coming months will reveal how businesses adapt to these new financial realities and whether government policy adjustments might follow.
