Sales Taxes in Canada
Sales taxes in Canada: all about GST, PST, HST, QST and RST, who has to pay them, how they're calculated, and what the rates are...
In Canada, there are three broad types of sales tax:
- Goods and Services Tax (GST)
- Provincial Sales Tax (PST) or Quebec Sales Tax (QST)
- Harmonised Sales Tax (HST)
Consumers pay the tax at point of sale when they buy goods and services. GST is the sales tax that the federal government levies, while PST is an additional percentage that the provincial government levies and collects. As an example, if GST in Canada is 5 percent and the PST in Nova Scotia is 10 percent, a customer in a Nova Scotia shop will pay 15 percent sales tax.
To make things simpler, in some provinces HST is collected instead of GST and PST. HST is a combination of GST and PST, but is paid to just one authority (the Canadian Revenue Agency) rather than two. The CRA then pays the federal portion of HST back to the province or territory.
Businesses must register to pay GST or HST if their turnover exceeds the small supplier limit of $30,000.
Goods and Services Tax (GST)
The rate of GST is five percent.
- For more information on GST from the CRA: Click here
- For more information on paying GST in Quebec: Click here
Provincial Sales Tax (PST) and Quebec Sales Tax (QST)
PST is not charged by Alberta, the Northwest Territories, Nunavut or Yukon, where only the 5 percent GST is paid at point of sale.
PST is not technically charged in New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario or Prince Edward Island, as consumers pay the combined HST instead.
In each province or territory, PST is charged at higher or lower rates on certain goods. For more information, see the links below.
- In British Columbia, the rate of PST is 7 percent
- In Manitoba, the rate of PST (also called "Retail Sales Tax" or RST) is 8 percent
- In Quebec, the rate of QST (the equivalent of PST) is 9.975 percent
- In Saskatchewan, the rate of PST is 5 percent
Harmonised Sales Tax (HST)
HST is not charged by British Columbia, Manitoba, Quebec or Saskatchewan, which pay GST and PST/QST separately.
HST is not charged by Alberta, the Northwest Territories, Nunavut or Yukon, where only the 5 percent GST is paid at point of sale.
- In New Brunswick, the HST rate is 13 percent
- In Newfoundland and Labrador the HST rate is 13 percent
- In Nova Scotia the HST rate is 15 percent
- In Prince Edward Island the HST rate is 14 percent
The HST rates above include the provincial rate and the federal GST rate.
- To check HST rates with the Canadian Revenue Agency: Click here
Sales Tax Exemptions
Exemptions and rebates apply to the taxes listed above. Some exemptions and rebates are federal, and others apply only at a provincial level.
GST applies to everyone in Canada, including non-residents. However, certain goods such as basic groceries and prescription medicines are zero-rated, as are goods shipped out of Canada. GST rebates are possible in specific circumstances.
There are many more exemptions and rebates available possible for PST and the provincial element of HST. Entitlement for rebates is controlled and administered by provincial authorities, and administered by the CRA in the case of HST. Rates on goods such as alcohol and tobacco are routinely higher, and vary between provinces. Some provinces have arranged point-of-sale rebates on essential goods and services, so no provincial sales tax is paid on these.
- For more information on the people, institutions, goods and services eligible for GST and HST rebates: Click here
- For more information on zero-rated goods and services: Click here
- For information on goods that qualify for a rebate at point of sale: Click here
- For further information on provincially-controlled rebates and exemptions, check the website of the relevant province or territory. A list can be found here
GST/HST credit is available to families with low incomes as a tax free quarterly payment.
- For more information on GST/HST credit: Click here
Making purchases in another province of Canada with lower sales tax does not reduce the final cost. This is because in each province and territory, a self-assessment income declaration must be completed for goods and services bought in another province, and the difference between the local rates is paid to the province of residency. For further details, see the website of the relevant provincial department of finance.