In today’s national marketplace, businesses operating across Canadian provinces face a variety of sales-tax regimes: GST, HST, PST etc…
For finance and business leaders, knowing which tax applies where and why is not an option, it’s strategic.
Below are six focused questions, each addressing a core term or key decision point: from the basic definition of a tax to province-specific rates and compliance implications.
What is the Goods and Services Tax (GST)?
The GST is the federal consumption-tax in Canada, set at 5% on most taxable goods and services in provinces without a harmonized model.
It’s the foundational layer of Canada’s sales-tax framework: from a business perspective, you need to charge it when your supply is made in a province that only levies GST.
What does Harmonized Sales Tax (HST) mean and how does it differ from GST?
HST is a blended sales-tax model used in participating provinces: it combines the federal GST with a provincial sales tax component into one single rate.
For example, in Ontario the HST rate is 13%, meaning that instead of separately charging GST + PST, you charge one HST rate.
How much is HST in Ontario (and why does it matter)?
In Ontario the HST rate is 13% for taxable supplies made in Ontario under the Place of Supply rules.
From a business planning standpoint: if you sell into Ontario, your pricing model, invoicing system and cost-structure must account for the 13% HST (not just the 5% federal GST).
What About Provincial Sales Tax (PST) And How Does It Combine With GST?
In provinces that have not adopted HST, a separate PST may apply alongside GST. For example in British Columbia the combined rate is 5% GST + 7% PST = 12%.
Thus your business must ascertain:
- Does the province use HST or GST+PST?
- What is the PST rate?
- How do you charge correctly?
What is the current rate of GST/HST across Canada and what recent changes should you know?
As of current guidance:
- The base GST remains at 5% in non-participating provinces.
- For participating provinces: Ontario 13%, Nova Scotia 14% (from April 1st 2025) following the provincial portion drop.
- PST-based provinces have varying combined rates (e.g: BC at 12%)
For business leaders, staying on top of rate changes (such as Nova Scotia’s April 2025 shift) is essential to avoid miscalculation and liability.
How do GST/HST obligations impact a business (registration, calculation and compliance)?
Your operational checklist must include:
- Registration for GST/HST when your taxable supplies exceed the CAD 30,000 threshold over four consecutive calendar quarters.
- Correctly determining place of supply so you charge the correct tax rate based on the buyer’s province.
- Using the tax calculator tools provided by Canada Revenue Agency to compute tax liabilities
From a strategic standpoint: sales tax is more than compliance, it affects your pricing architecture, margin modelling and cross-jurisdictional expansion strategy.
Conclusion
In the landscape of Canadian provincial sales tax regimes, clarity is not only useful, it is operationally and strategically vital.
For executives and leaders at companies active across multiple jurisdictions, ensuring the correct application of GST, HST or PST is a competitive enabler: reducing risk, supporting pricing accuracy and aligning tax costs with growth ambitions.
Still confused by province by province sales tax? You’re not alone, most business leaders find them tricky!
Book a meeting with our experts to get clarity on sales tax and grow your project efficiently.
