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In Canada there are three types of sales taxes: provincial sales taxes or PST, the federal Goods and Services Tax or GST, and the combined Harmonized Sales Tax or HST.

Every province, with the exception of Alberta, implements a provincial sales tax or the Harmonized Sales Tax. The territories of Yukon, Northwest Territories and Nunavut do not have territorial sales taxes. The federal GST rate is 5%, effective January 1, 2008.

Contents

Goods and Services Tax

The federal government's sales tax is a value-added tax.

Harmonized Sales Tax

The Harmonized Sales Tax (HST) is used in certain provinces to combine the federal Goods and Services Tax (GST) and the Provincial Sales Tax (PST) into a single, blended sales tax. Currently, there is a 13% HST in the provinces of New Brunswick, Newfoundland, and Nova Scotia. The HST is collected by the Canada Revenue Agency, which then remits the appropriate amounts to the participating provinces. Like the GST, the HST is value-added. Effective July 1, 2010, British Columbia and Ontario will adopt HST at 12% and 13% respectively, replacing their current split tax mechanism (PST and GST).

Provincial sales taxes

Separate Provincial Sales Taxes (PST) are collected in the provinces of British Columbia, Saskatchewan, Manitoba, Ontario, Quebec (called QST for Quebec Sales Tax, in French TVQ, Taxes des Ventes du Québec), and Prince Edward Island. Goods to which the tax is applied vary by province, as does the rate. Moreover, for those provinces whose provincial sales tax is applied to the combined cost and GST, provincial revenues decline or increase with respective changes in the GST. Of the provincial sales taxes, only the QST (and the HST) are value-added; the rest are cascading taxes.

Province rate (%) combined fed./prov. rate (%) note
British Columbia 7 [1] 12
  • food, fuel, children's sized clothes and footwear as well as some other items and service are exempted (see Sales taxes in British Columbia for more detail)
  • Alcohol is taxed at 10%.
  • Passenger vehicles are taxed at between 7% to 10% based on purchase price.[1]
  • Harmonized Sales Tax takes effect on July 1, 2010.
Alberta 0 5
  • Alberta has no provincial sales tax. There is a 4% tax on lodging.
Saskatchewan 5 [2] 10
  • Reduced from 7% on 28 October 2006 [2]
  • There is a separate 10% liquor consumption tax. The non-alcoholic portion of a restaurant meal is not taxed.
Manitoba 7 [3] 12
Ontario 8 [4] 13
  • PST is usually 8%, but is 10% on entertainment and alcohol at restaurants and 12% on alcohol at retail stores on top of the flat LCBO liquor markups. [3].
  • PST is 5% on lodging, but many communities add their own 3% fee, with the money being invested in projects designed to further encourage tourism.
  • Harmonized Sales Tax takes effect on July 1, 2010.
Quebec 7.5 [5] 12.875
  • Provincial rate is nominally 7.5%, but also applied to federal 5% GST. Effective provincial rate is 7.875%.
Prince Edward Island 10 [6] 15.5
  • Provincial rate is nominally 10%, but also applied to federal 5% GST. Effective provincial rate is 10.5%.
New Brunswick 13 13
Nova Scotia 13 13
Newfoundland and Labrador 13 13

The territories

There is neither the HST nor any other sort of "territorial sales tax" in any of the three northern jurisdictions,[4] only the GST is collected. The territorial governments are heavily subsidized by Ottawa, and its residents receive some additional tax concessions due to the high cost of living in the north.

Since the territories are under federal jurisdictions in all matters whatsoever Parliament could theoretically impose the HST (or some other sales tax) in the territories without the consent of their governments. However, consumer goods in the territories are already very expensive (due to high shipping costs) so there is no political will to tax them any further.

See also

References

  1. ^ Finance, British Columbia Ministry of (2007). "Finance - Provincial Sales Tax" (in English). http://www.sbr.gov.bc.ca/individuals/Consumer_Taxes/Provincial_Sales_Tax/about.htm. Retrieved 2009-09-26. 
  2. ^ Finance, Saskatchewan Ministry of (2007). "Provincial Sales Tax - Finance -" (in English). http://www.finance.gov.sk.ca/taxes/pst/. Retrieved 2009-09-26. 
  3. ^ Finance, Manitoba Ministry of (2009). "Manitoba Finance" (in English). http://www.gov.mb.ca/finance/taxation/taxes/retail.html. Retrieved 2009-09-26. 
  4. ^ Revenue, Ontario Ministry of (2009-09-21). "Retail Sales Tax" (in English). http://www.rev.gov.on.ca/en/tax/rst/index.html. Retrieved 2009-09-26. 
  5. ^ Revenu, Quebec. "General information - GST & QST" (in English). http://www.revenu.gouv.qc.ca/eng/particulier/taxes/tpstvq/info.asp. Retrieved 2009-09-26. 
  6. ^ Public Treasury, Prince Edward Island Department of (2008-01-07). "Tax and Land Information Website: Revenue Tax (PST)" (in English). http://www.gov.pe.ca/pt/taxandland/index.php3?number=76948&lang=E. Retrieved 2009-09-26. 

External links

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