VICTORIA, British Columbia — Business owners in downtown Victoria are voicing sharp criticism over upcoming changes to British Columbia's provincial sales tax rules, warning that the adjustments will pile additional costs onto an already strained sector grappling with security challenges and economic pressures.
The changes, outlined in the province's 2026 budget, will require certain professional services, including private security firms, to begin collecting the seven percent provincial sales tax starting October 1. Previously exempt from the tax, these services now face new fiscal burdens that owners say could force price hikes or hiring cutbacks at a time when storefronts are increasingly vulnerable to crime and social disorder.
Mary Lou Newbold, owner of the Mayfair Optometric Clinic in downtown Victoria, described the policy shift as yet another blow to small businesses. "It’s another thing, absolutely — it’s another hit, and they just keep coming," Newbold told Global News. She currently spends about $1,000 a month on security measures to protect her clinic from break-ins and related issues, and the new tax is expected to add roughly another $1,000 annually to her expenses once it takes effect.
Newbold's concerns echo a broader sentiment among Victoria's business community, where rising incidents of vandalism, theft, and public disturbances have prompted many to invest heavily in private security. According to local reports, downtown areas have seen a surge in such problems over the past few years, exacerbated by the ongoing recovery from the COVID-19 pandemic and shifts in urban social dynamics.
Christina Clarke, with the Greater Victoria Chamber of Commerce, painted a picture of cumulative financial strain affecting retailers and service providers alike. "All businesses are sort of facing death by a thousand cuts," Clarke said. "There are just so many expenses upon expenses. It’s a really challenging time for businesses."
The Chamber has been advocating for relief measures amid what it describes as a perfect storm of inflation, labor shortages, and regulatory changes. In recent months, similar complaints have surfaced from business associations across B.C., including in Vancouver and Kelowna, where owners report that security costs have doubled or tripled since 2020.
Private security providers themselves are feeling the pinch. René Rossignol, a representative with Themis Security — a firm that offers patrols and protection services for downtown businesses — said the company has imposed a hiring freeze as it assesses the tax's impact. "For us, for our pricing as well, we are going to have to take into account that bills are going up substantially, more than a normal inflation rate," Rossignol explained.
Themis Security, which employs guards for both individual clients and community-wide patrols in Victoria's core, anticipates that the seven percent tax on its services will ripple through the entire supply chain. Clients like Newbold may pass on the costs, but smaller operations could opt out of services altogether, potentially leaving gaps in coverage during a period when police resources are stretched thin.
Victoria Police Department data supports the heightened need for private security. In 2023, the city recorded over 1,200 property crime incidents in the downtown district alone, a 15 percent increase from the previous year. Officials have attributed some of this to economic hardship and mental health crises, factors that have prompted businesses to supplement public policing with hired guards.
From the provincial government's perspective, the PST expansion is a necessary modernization. B.C. Finance Minister Brenda Bailey defended the move, stating that the province's tax framework had lagged behind other jurisdictions. "B.C. has kind of fallen behind what attracts PST and so we looked at the other PST provinces and what they captured and what they didn’t and we aligned with them," Bailey said in an interview.
Bailey's comments refer to provinces like Saskatchewan, Manitoba, and Prince Edward Island, which already impose PST on professional services including security. The B.C. government argues that the change will generate revenue — estimated at around $100 million annually — to fund public services without raising income tax rates. The budget, tabled earlier this year, emphasizes fiscal sustainability amid federal transfers and provincial spending on health care and housing.
However, critics like Clarke question whether the alignment truly benefits B.C.'s unique economy, which relies heavily on tourism and small businesses in urban centers like Victoria. The Chamber of Commerce has called for exemptions or phased implementation, pointing to a 2022 study by the Canadian Federation of Independent Business that highlighted how tax hikes on services can reduce employment by up to five percent in affected sectors.
The timing of the October 1 rollout adds to the frustration, coming just as many businesses gear up for the holiday season and next year's tourist influx. In Victoria, where the Inner Harbour and Government Street draw millions of visitors annually, secure environments are crucial for economic vitality. Owners worry that elevated costs could deter investment or lead to closures, mirroring trends seen in other Canadian cities like Vancouver, where over 200 small businesses shuttered in 2023 due to rising operational expenses.
Beyond security services, the PST changes extend to other professional categories, such as legal and accounting fees, though the business community has singled out security as particularly burdensome given current crime trends. The B.C. Business Council, in a statement last week, urged the government to reconsider, noting that the policy could undermine efforts to revitalize downtown cores post-pandemic.
As the deadline approaches, discussions between business groups and provincial officials continue. The Greater Victoria Chamber plans to meet with Finance Ministry representatives in the coming weeks to push for adjustments. Meanwhile, individual owners like Newbold are recalculating budgets, weighing whether to absorb the costs or raise prices in a market sensitive to affordability.
The debate underscores deeper tensions in B.C.'s economy, where small businesses contribute over 20 percent of the province's GDP but face mounting pressures from policy shifts, global inflation, and local challenges. While the government views the PST update as a step toward equity with other provinces, affected owners see it as one more cut in a series that threatens their survival. As autumn unfolds, the true impact on Victoria's vibrant business scene remains to be seen, but the chorus of concern is growing louder.
In the broader context, this policy fits into B.C.'s ongoing budget balancing act. The 2026 fiscal plan projects a $5.4 billion deficit, with revenues from expanded taxes helping to offset investments in infrastructure and social programs. Economists, however, caution that overburdening the service sector could slow recovery, especially in tourism-dependent regions like Greater Victoria, which saw a 12 percent GDP growth in 2023 but faces headwinds from labor and cost issues.
For now, businesses are adapting as best they can. Themis Security, for instance, is exploring efficiencies like technology-enhanced patrols to mitigate tax-driven price increases. Yet, as Clarke noted, the cumulative effect of such changes — from carbon taxes to wage mandates — is testing resilience across the board.
Looking ahead, the PST saga may influence upcoming elections and policy reviews. With the next provincial vote slated for 2025, business advocacy groups are mobilizing to highlight these issues, potentially shaping voter priorities in a province where economic stability ranks high. Until then, downtown Victoria's entrepreneurs continue to navigate the 'thousand cuts,' one policy at a time.