What is GST and HST?
GST or the goods and services tax is a tax that applies to the supply of most goods and services in Canada. These include real propery and intangible personal property.
HST or harmonized sales tax generally applies to the same base of property and services as GST. HST is imposed in participating provinces that have harmonized their provincial sales tax with the GST.
New Brunswick, Nova Scotia, Newfoundland and Labrador, Ontario and Prince Edward Island are participating provinces. in the other provinces and territories, GST is imposed on taxable goods and services and there may also be a provincial sales tax or a retail sales tax in place.
What supplies does the GST and HST apply to?
Most goods and services supplied in or imported into Canada are taxable supplies and are subject to GST and HST.
Some supplies of good and services are are charged at a 0% taxation rate.
- basic groceries such as milk, bread, and vegetables
- agricultural products like grain or raw wool
- prescription drugs and drug-dispensing fees
- medical devices
A small number of goods and services are exempt from taxation.
- used residential housing
- long-term residential accommodation and residential condominium fees
- most health, medical, and dental services performed for medical reasons
- child care services for children 14 years or younger
- bridge, road, and ferry tolls
- legal aid services
- educational services such as:
- courses from a vocational school that leads to a certificate or a diploma to practice a trade or a vocation, or
- tutoring services for an individual who takes a course approved for credit by a school authority or the service follows a curriculum designated by a school authority;
- music lessons
- most services provided by financial institutions
- arranging for and issuing insurance policies by insurance companies, agents, and brokers
- most goods and services provided by charities
- certain goods and services provided by non-profit organizations, governments, and other public service bodies