Sales taxes

Let's check in on Paul

Paul is at the mall with his friend Anna, buying a new shirt. When the cashier rings up the sale, the total is more than Paul expects.

"The price tag shows $24.95," protests Paul. The cashier checks the receipt and explains, "Yes, $24.95 plus tax."

Goods and services tax/harmonized sales tax

The goods and services tax (GST) is a 5% federal tax you pay on most goods and services you purchase in Canada. In some provinces, the GST has been combined with provincial sales tax to create the harmonized sales tax (HST). HST rates vary by province.

Some common examples of goods and services that we do not pay GST/HST on, are:

  • basic groceries such as milk, bread and vegetables
  • prescription drugs and drug-dispensing fees
  • medical devices such as hearing aids and artificial teeth
  • most healthcare, medical and dental services
  • residential rents, including university residences and boarding houses
  • used residential housing
  • local or municipal bus services and passenger ferry services
  • legal aid services
  • most banking services
  • most child care and educational services including tuition fees

Provincial sales tax

Some provinces apply provincial sales tax or retail sales tax to the purchases you make. The items that are taxed and the tax rate vary from province to province.

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