PST on professional services related to development and construction.
To understand why the 2026 BC budget could increase housing costs and introduce delays, we have to look at how housing gets built in BC. Pretty much every housing development in BC (think condos, townhomes, duplexes and more) must be reviewed by engineers, architects and geoscientists. These are intended to prevent shoddy construction and ensure buildings meet minimum standards. But they take time and money.
The February 2026 BC budget mandates that PST be collected on “architectural services, engineering and geoscience services.” All three of these professions are involved in the development process, and thus this added expense will likely be passed on to the end buyer once a project reaches completion.
Furthermore, expanded PST introduces additional time and paperwork to the development process, which could slow down housing projects even further. And it adds more overhead for accounting departments (or outside accountants a developer brings on to a project), setting up the possibility of further delays. Plus, accounting services, including bookkeeping and assurance services, are also now subject to PST themselves, topping off yet another layer of costs and paperwork.
Housing starts were predicted to drop in the upcoming years even before this new budget was announced. These new budgetary measures may mean more projects get put on hold, delayed or cancelled, which may further constrain supply. Furthermore, before these budgetary measures were introduced, cost-of-delivery was already cited as an issue constraining housing supply in BC. The result could be a perfect storm of delays and cost increases.
The BC provincial government plans to slow investments in infrastructure and housing.
Beyond the impacts of the extension of PST to services involved in development and construction, the BC government is also slowing its pace of investment in infrastructure and housing projects.
The latter is more immediately related to housing. The province states that it is, in essence, spreading out investments over a longer time period. This means that the same amount of dollars are now being spent but projects won’t happen as fast. This introduces a direct delay that could affect low-income housing the most.
On the other side, investment in projects like hospitals will also slow down, along with roads and other infrastructure. While not as directly tied to housing, these are necessary to support new residents, and without them many housing projects may not happen or may not happen as quickly.
Overall, the 2026 BC budget may lead to reduced housing starts and a slower pace of housing construction in the years ahead. Combined with an already sluggish pace of housing development, this could mean constrained supply, and in turn higher prices, as demand once again outstrips inventory down the line.
