How Provincial Sales Tax (PST, GST, HST) Apply to a Small Business Owner

by Craig Anthony

2 min read

Three different types of sales taxes are levied in Canada. A business is required to pay one or more of these taxes depending on the business’s geographic location. Since each province or territory may have its own detailed nuances in the tax code, it is best to consult a tax professional regarding your business’s sales tax before remitting your tax obligation each year. Learn more about these sales taxes, and find out which of these taxes are due in each of the provinces.

Provincial Sales Tax, Goods and Services Tax, and Harmonized Sales Tax

The provincial sales tax, the goods and services tax, and the harmonized sales tax are the three different sales taxes levied in Canada.

  • PST is a sales tax levied by the individual province.

  • GST is a value-added tax levied by the Canadian federal government.

  • HST is a value-added tax that is a blend of the PST and GST; it is collected by the Canadian Revenue Agency and disbursed to provinces.

What Types of Tax Are Due Where

Depending on the province where a business is located, it will have to charge either a combination of PST and GST, GST only, or HST only.

Provinces Where PST and GST Are Due

A combination of PST and GST is due in the following provinces:

  • British Columbia: A 5% GST and a 7% PST are due, for a total tax of 12%.

  • Manitoba: A 5% GST and an 8% PST are due, for a total tax of 13%.

  • Quebec: A 5% GST and a 9.975% PST are due, for a total tax of 14.975%.

  • Saskatchewan: A 5% GST and PST are due, for total tax of 10%.

Some of these provinces have additional special tax situations. For example, Saskatchewan has a separate 10% liquor consumption tax. Quebec has a 5% tax on books, and Manitoba has a 5% tax on lodging.

Provinces Where Only GST Is Due

There are four provinces or territories where only GST is due. In all cases, the GST is only 5%, bringing the total tax due for these territories to 5%.

  • Alberta

  • The Northwest Territories

  • Nunavut

  • Yukon

Alberta also has a 4% tax on lodging and a 4% tax on hotel room fees.

Provinces Where Only HST Is Due

There are five provinces or territories where HST (blending GST and PST) is due. These provinces, along with their total tax rates, are:

  • New Brunswick: 15% (a 5% GST and a 10% PST)

  • Newfoundland and Labrador: 15% (a 5% GST and a 10% PST)

  • Nova Scotia: 15% (a 5% GST and a 10% PST)

  • Ontario: 13% (a 5% GST and a 8% PST)

  • Prince Edward Island: 15% (a 5% GST and a 10% PST)

References & Resources

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