Canada has sales tax, but the system is different from the United States
Canada does have sales tax. The federal government charges a Goods and Services Tax (GST) of 5 percent on most items. Most provinces also charge their own sales tax, called Provincial Sales Tax (PST) or Harmonized Sales Tax (HST), which ranges from 0 to 10 percent depending on where you live. When you buy something in Canada, you pay the combined rate — so the total tax you see at checkout is the sum of federal and provincial taxes together.
The key difference from the U.S. system is that Canada's sales tax is often included in the advertised price, especially in stores and restaurants. In the United States, the price tag usually shows the pre-tax amount, and tax is added at the register. In Canada, you may see the price with tax already built in, or you may see it added at checkout — it depends on the retailer and the province.
Key Takeaways
- Canada charges a 5 percent federal GST on most goods and services, plus a provincial tax that varies by province from 0 to 10 percent.
- The combined sales tax rate ranges from 5 percent in Alberta to 15 percent in Nova Scotia, New Brunswick, and Newfoundland and Labrador.
- Some items are exempt from GST, including basic groceries, prescription medications, and medical devices.
- Advertised prices in Canada often include sales tax already, unlike in the United States where tax is usually added at checkout.
Sales tax rates by province
Each province sets its own tax rate and decides which items are taxed. Some provinces use a single combined rate called HST, while others charge GST plus a separate PST. The rates are:
| Province | GST | Provincial Tax | Total Rate |
|---|---|---|---|
| Alberta | 5% | 0% | 5% |
| British Columbia | 5% | 7% PST | 12% |
| Manitoba | 5% | 8% PST | 13% |
| New Brunswick | 15% HST | 15% | |
| Newfoundland and Labrador | 15% HST | 15% | |
| Nova Scotia | 15% HST | 15% | |
| Ontario | 13% HST | 13% | |
| Prince Edward Island | 15% HST | 15% | |
| Quebec | 5% | 9.975% QST | 14.975% |
| Saskatchewan | 5% | 6% PST | 11% |
Alberta has the lowest combined rate at 5 percent because it charges only the federal GST and no provincial tax. The Atlantic provinces (Nova Scotia, New Brunswick, Newfoundland and Labrador, and Prince Edward Island) charge the highest rate at 15 percent through HST. Quebec uses a separate Quebec Sales Tax (QST) in addition to GST, which results in a combined rate of about 14.975 percent.
What items are exempt from GST
Not everything sold in Canada is taxed. The federal government exempts certain items from GST, including basic groceries (bread, milk, vegetables, meat), prescription medications, medical devices prescribed by a doctor, and dental and medical services. Some provinces also exempt additional items from their provincial tax.
Restaurant meals and prepared foods are taxed, but raw ingredients you buy at a grocery store are not. This means a loaf of bread from a bakery counter may be taxed differently than a packaged loaf from the shelf, depending on how the retailer categorizes it. Children's clothing and footwear are exempt from GST in most cases, but again, provincial rules vary.
Services like haircuts, legal advice, and accounting are taxed. Rent for residential housing is exempt from GST, but hotels and short-term rentals are taxed. If you are unsure whether a specific item is taxed, the Canada Revenue Agency (CRA) website lists exemptions in detail, or you can ask the retailer.
How GST refunds work for visitors
If you are a visitor to Canada from outside the country, you may be able to recover the GST you paid on goods you are taking out of Canada. You cannot recover GST on services, meals, or accommodation. To claim a refund, you must have receipts showing the GST paid, and the goods must be unused and in original condition.
You submit your receipts and a refund form to the CRA or to a duty-free shop at the airport or border when you leave Canada. The refund is usually processed within a few weeks and sent to your home address. The minimum purchase amount and exact process vary by retailer and border crossing, so check with the CRA or your retailer before you leave.
Sales tax on online purchases
When you buy something online from a Canadian retailer, you pay the sales tax rate for the province where the item is being delivered, not where the retailer is located. If you order from a U.S. retailer and have it shipped to Canada, you may owe GST/HST on the purchase, and the courier company often collects it at delivery.
Some online retailers based outside Canada do not charge Canadian sales tax at the time of purchase, but Canada Border Services Agency (CBSA) may assess tax when the package arrives. If tax is owed, the delivery company will contact you to collect it before the package is released. This is especially common for purchases under a certain dollar threshold — the exact amount depends on the province and the type of item.
Frequently Asked Questions
Is sales tax included in the price shown in Canadian stores?
It depends on the retailer and province. Many stores show the price with tax included, but some show the pre-tax price and add tax at checkout. Restaurants and fast-food chains usually show the pre-tax price. If you are unsure, ask the cashier or check the receipt.
Do I pay sales tax on groceries in Canada?
Basic groceries like bread, milk, vegetables, and meat are exempt from GST. However, prepared foods, restaurant meals, and some specialty items are taxed. Packaged snacks and candy are usually taxed, while fresh produce is not.
Can I claim GST back on my taxes?
Most individual consumers cannot claim GST back. However, if you are self-employed or run a business, you may be able to claim Input Tax Credits (ITCs) for GST paid on business purchases. You must be registered for GST with the CRA to do this.
What is the difference between HST and PST plus GST?
HST is a single combined tax that replaces GST and PST. Provinces using HST (Ontario, Nova Scotia, New Brunswick, Newfoundland and Labrador, and Prince Edward Island) charge one rate. Provinces using PST plus GST charge two separate taxes that are added together. The total amount you pay is the same either way.
Do I pay sales tax when I buy something in one province and use it in another?
You pay the sales tax rate of the province where you make the purchase, not where you use the item. If you buy something in Alberta (5 percent tax) and take it to Ontario (13 percent tax), you pay the Alberta rate. This applies to in-store purchases; online orders are taxed based on the delivery address.