Sales Taxes in Canada

Sales Taxes In Canada

In Canada, three types of sales taxes are levied. These are as follows:

• Provincial sales taxes (PST), levied by the provinces
• Goods and Services Tax (GST), a value-added tax levied by the federal government
• The combined Harmonized Sales Tax (HST), also a value-added tax, a single, blended combination of the PST and GST which is used in British Columbia, Ontario, and the Atlantic provinces of New Brunswick, Newfoundland and Labrador, and Nova Scotia. The HST is then collected by the Canada Revenue Agency, which then remits the appropriate amounts to the participating provinces.

Every province except Alberta has implemented either a provincial sales tax or the Harmonized Sales Tax. The federal GST rate is 5 percent, effective January 1, 2008.

The territories of Yukon, Northwest Territories, and Nunavut do not have either the HST or territorial sales taxes. Only the GST is collected. The three northern jurisdictions are heavily subsidized by the federal government, and its residents receive some additional tax concessions due to the high cost of living in the north.