Canadian Sales Tax 101 (GST, PST, HST)

Published: 28-02-2022

Author

Julie

Picture this. You have $2.75 left in your pocket and you feel like grabbing a drink. Perfect, a can of Coke is $2.75, lucky you!
“That will be $3.10!”
Wait, what? How?
And this is why you should be reading this article!

Federal and provincial value-added taxes in Canada

In Canada, two value-added taxes are added to the price of most products and services—a federal tax and a provincial tax.

The goods and services tax (the “GST,” “Taxe sur les produits et services” or “TPS” in French) is a 5% value-added tax collected and administered by the federal government.

Separate provincial sales taxes (“PST”) are collected in British Columbia, Saskatchewan, Manitoba and Quebec (“Taxe de vente du Québec”). Each province has a different tax rate and a different list of products and services to which the PST applies.

In five provinces, Nova Scotia, New Brunswick, Newfoundland and Labrador, Ontario and Prince Edward Island, GST is combined with provincial sales tax (PST) into a harmonized sales tax (HST).

Sales tax rate by province and territory

Province / Territory Type GST PST HST Total Tax Rate
Alberta GST 5%   - 5%
British Colombia GST + PST 5%   7% 12%
Prince-Edward Island HTS -  - 15%
Manitoba GST + PST 5% 7% 12%
New Brunswick  HTS   - - 15%
Nova Scotia HTS   - - 15%
Nunavut GST 5% - 5%
Ontario HST - -  13%
Québec GST + QST 5% 9.975%  14.975%
Saskatchewan GST + PST 5%  6% 11%
Newfoundland and Labrador HTS - - 15%
Northwest Territories GST 5% - 5%
Yukon GST 5% - 5%

Sales taxes in daily life

The main thing to remember is that in Canada, sales taxes (GST+PST or HST) are NOT included on the sticker price. You’re basically “discovering” how much you will pay at the cash register, and it may make a difference, especially for bigger purchases. For instance, your $880 laptop is actually $994.40 in Ontario and $985.60 in British Columbia. You can use this useful calculator to get the final “after taxes” price.

“Basic groceries” are not taxable or “zero rated,” so your $3.25 loaf of bread is actually $3.25. However, the definition of “basic groceries” is rather complex—we’re talking pages and pages of categories and exemptions. For instance, cooking wines are zero rated, but taxes apply for wine. Snack food is taxable, but milk, meat, produce or eggs aren’t. For fun, check out “basic groceries” and enjoy the long section on “salt”!

Oh, and by the way, provinces and territories have their own list of taxable items, so it may get even more confusing if you’re travelling around Canada.
Bottom line is, carry extra cash or a debit/credit card.
The same rule applies in restaurants, all prices are without tax—budget for taxes plus tip if applicable. Note that taxes aren’t charged on tips.
Clothing, furniture, etc., are also taxable. Gas too, but taxes are included for once!

How about services?

Services are taxable too! So (mentally) add taxes to your phone and Internet plan, hotel room or haircut.
Bank fees are not taxable. Transit pass prices can be with or without taxes added, depending on the province.

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