What is GST/HST?

The Goods and Services Tax (GST) is a 5% federal tax on most goods and services sold in Canada. Five provinces have combined their provincial sales tax with the GST into a single Harmonized Sales Tax (HST): Ontario at 13%, Nova Scotia at 14%, and New Brunswick, Newfoundland and Labrador and Prince Edward Island at 15%. The other provinces and territories charge 5% GST, with British Columbia, Saskatchewan, Manitoba and Québec adding their own separate provincial tax.

A business must register for GST/HST once its worldwide taxable sales exceed $30,000 in a single calendar quarter or over four consecutive calendar quarters, the small supplier threshold. Smaller businesses can register voluntarily. Registrants charge tax on taxable sales, claim input tax credits for tax paid on business purchases, and file returns monthly, quarterly or annually depending on their sales volume. The net amount is either remitted or refunded.

Not everything is taxed the same way. Zero-rated supplies, such as basic groceries and exports, are taxable at 0%, so the seller still claims input tax credits. Exempt supplies, such as most residential rent and many health and financial services, carry no tax and no credits. The rate charged generally depends on where the customer receives the goods or services, so a business in Alberta shipping to Ontario charges 13% HST.