Sales taxes in Canada: Difference between revisions

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Revision as of 14:35, 23 October 2008

In Canada there are three types of sales taxes: provincial sales taxes or PST, the federal Goods and Services Tax or GST, and the Harmonized Sales Tax or HST.

Every province except Alberta implements a Provincial Sales Tax or the Harmonized Sales Tax. The Yukon, Northwest Territories and Nunavut do not have any type of regional sales tax. The federal GST rate is 5% effective January 1, 2008.

Harmonized Sales Tax

The Harmonized Sales Tax (HST) is used in certain provinces to combine the federal Goods and Services Tax (GST) and the Provincial Sales Tax (PST) into a single, blended, sales tax. Currently, there is a 13% HST in the provinces of New Brunswick, Newfoundland, and Nova Scotia. The HST is collected by the Canada Revenue Agency, which then remits the appropriate amounts to the participating provinces,.

Provincial Sales Taxes

Separate Provincial Sales Taxes (PST) are collected in the provinces of British Columbia, Saskatchewan, Manitoba, Ontario, Quebec, and Prince Edward Island. Goods to which the tax is applied varies by province, as does the rate. Moreover, for those provinces whose provincial sales tax is applied to the combined cost and GST, provincial revenues decline or increase with respective changes in the GST.

Province	rate (%)	combined fed./prov. rate (%)	note
British Columbia	7	12	Officially known as the Social Service Tax [1] Alcohol is taxed at 10% [2]
Alberta	0	5	Alberta has no provincial sales tax
Saskatchewan	5	10	Reduced from 7% on 28 October 2006 [3] There is a separate 10% liquor consumption tax. The non-alcoholic portion of a restaurant meal is not taxed.
Manitoba	7	12
Ontario	8	13	PST is usually 8%, but is 5% on lodging, 10% on entertainment and alcohol at restaurants, and 12% on alcohol at retail stores [4]
Quebec	7.5	12.875	Provincial rate is nominally 7.5%, federal 5% GST is also applied on top, effectively 7.875%
Prince Edward Island	10	15.5	Provincial rate is nominally 10%, federal 5% GST is also applied on top, so effectively 15.5%
New Brunswick	13		*Harmonized Sales Tax includes provincial tax and GST
Nova Scotia	13
Newfoundland and Labrador	13

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-*Provincial rate is nominally 10%, federal 5% GST is also applied on top, so effectively 10.5%
+*Provincial rate is nominally 10%, federal 5% GST is also applied on top, so effectively 15.5%
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 ! [[New Brunswick]]