British Columbia Eliminates Sales Tax on Heat Pumps

The Province of British Columbia is making non-polluting electric heat pumps more affordable—and natural gas furnaces, fireplaces, and water heaters more expensive. 

As of April 1, 2022 the province will increase the provincial sales tax (PST) on fossil fuel combustion systems from 7 per cent to 12 per cent. Meanwhile, on the same date, heat pumps will be exempt from PST.

The PST rate increase applies to fossil fuel combustion systems that heat or cool indoor spaces or water. The province defines one as "a system that may rely on, in all or in part, the combustion of coal, kerosene, heavy fuel oil, heating oil, natural gas or propane and is designed, in all or in part, for indoor use." It includes
central forced air furnaces, fireplaces, on-demand gas fired hot water heaters, and air conditioners. (Yes, there are natural-gas powered air conditioners.)

With provincial rebates already making heat pumps more financially attractive, the removal of sales tax is one more reason to switch up your home to all-electric equipment when the time comes to replace your oil- or natural-gas-fired furnace.

Source: Provincial Sales Tax (PST) Notice 2022-003.