HST Rates and an HST Definition
Provincial HST Rates & Who Has to Charge It
Harmonized Sales Tax, commonly referred to as HST, is a consumer tax resulting from the combination of the Canadian federal Goods and Services Tax (GST) and provincial sales tax (PST). The HST resulted from attempts by the federal government to pressure provinces to abandon their individual provincial sales tax systems in favour of a blended tax that would "improve the competitiveness of Canadian businesses".
Unfortunately, due to resistance by some provinces the HST has not been universally implemented and some provinces still charge and administer their own provincial (or retail) taxes in addition to GST.
The HST is collected by the Canada Revenue Agency (CRA) which then remits the appropriate amounts to the participating provinces.
To compensate low income individuals who are affected by the GST/HST, the federal (and some provincial) governments issue a GST/HST credit - a tax-free quarterly payment intended to offset all or part of the GST/HST paid. Eligibility for the GST/HST credit is determined from the previous year's tax return.
Ontario implemented the Harmonized Sales Tax (HST) July 1, 2010, joining Nova Scotia, New Brunswick, and Newfoundland and Labrador where HST has already been in effect since 1997. PEI implemented the HST on April 1, 2013.
BC actually switched to the HST on July 1, 2010 but opposition led to a referendum resulting in the province converting back to the PST/GST on April 1, 2013 and paying back the $1.6 billion HST transition subsidy originally given to the province by the federal government.
At present, British Columbia, Saskatchewan and Manitoba still have provincial sales tax as does Quebec (referred to as the Quebec Sales Tax or QST).
Alberta, Yukon, Nunavut, and the Northwest Territories have no provincial sales taxes and therefore no Harmonized Sales Tax either. Consumers in those places are charged only the GST on taxable goods and services.
Canadian Taxes: Which Province Charges Which Taxes & How Much?
|BC||GST 5% & PST 7%||As of April 1, 2013.|
|Saskatchewan||GST 5% & PST 5%|
|Manitoba||GST 5% & RST 7%||The Provincial Sales Tax is known as Retail Sales Tax (RST)|
|Quebec||GST 5% & QST 9.5%(Quebec Sales Tax)||As of January 1, 2013, the QST rate will be 9.975%, but will no longer be charged on GST. This results in no change to the total tax.|
|New Brunswick||HST 13%|
|Nova Scotia||HST 15%|
|Newfoundland & Labrador||HST 15%||As of July 1, 2016, the HST rate increased from 13% to 15%|
|Prince Edward Island||HST 15%||As of Oct. 1, 2016, the HST rate increased to 15%|
|Northwest Territories||GST 5%|
Does My Business Need to Charge HST?
As an operator of a business in any of the provinces that has HST, it's your responsibility to charge, collect and remit Harmonized Sales Tax as required. As with the GST, there is a Small Supplier exception; if your small business makes less than $30,000 annually, you are not required to register for GST/HST. You may want to register voluntarily, however, so you can claim Input Tax Credits on the goods and services you consume in the course of doing business.
What If I Sell Goods and Services Out-of-Province or Out-of Country?
Because of the differing tax regimes, selling goods and services to another province or territory is a headache for Canadian businesses. You must charge either HST or GST/PST according to the destination provincial/territorial rates. So for example, if your business resides in Ontario but you are shipping goods to Manitoba, rather than charging the Ontario rate of 13% HST on the sale you would charge 5% GST and 7% Manitoba Retail Sales Tax (RST). (See How To Charge and Provincial Sales Tax (RST) in Manitoba.)
HST/GST/PST does not apply to sales of goods and services to jurisdictions outside of Canada. This includes sales to Canadian businesses as long as the destination address is outside Canada - so for example, if a business in BC sells a product to a business located in Nova Scotia but the product is for use elsewhere and is shipped outside of the country there is no HST/GST/PST charged on the transaction.
For more information on charging and remitting GST/HST, see:
- How to Get a GST/HST Number in Canada: GST/HST Registration
- Grappling With the GST/HST
- What You Need to Know About Ontario HST
- How to Pay the GST/HST Your Canadian Small Business Owes
- How is GST/HST Charged on Discounts?
- How Do You Get a GST/HST Refund?