What Is the Harmonized Sales Tax (HST)?

Canada’s harmonized sales tax (HST) is a consumption tax paid by local consumers and businesses. It combines the federal goods and services tax (GST) and sales taxes. Five provinces use the HST as of 2025. The HST was implemented in 1997 and is administered by the federal government. Businesses collect the tax and remit it to the 澳洲幸运5官方开奖结果体彩网:Canada Revenue Agency (CRA). Proponents believe it impr🐲oves competition for Canadian businesses by simplifying their administrative costs, leading to lower prices for consumers.

Who Pays the HST in Canada?

Before being introduced in 1997, Canadian provinces collected the GST and their provincial sales tax (PST), remitting the GST to the federal government. Five provinces use the HST. It is paid by purchasers at the 澳洲幸运5官方开奖结果体彩网:point of sale (POS). The vendor collects the tax and remits it to the CRA, the tax division of the federal government. The CRA then allocates the provincial portion of the HST to the respective pr🌱ovince’s government.

The HST was designed to streamline the recording and collection of federal and provincial 澳洲幸运5官方开奖结果体彩网:sales taxes by combining them into a single tax across the country. Advocates said it would reduce business costs (and ultimately customers) since it simplifies sales-tax-related bookkee💎ping.

But, the process can be complicated. While the aim was to create a national sal⛎es tax, the Canadian government made the adoption of the HST optional—and many p🐈rovinces opted to keep their separate systems and rates instead.

As a result, businesses operating provincially or nationally—either in physical locations or online—have to deal with disparities in tax rates, depending on whether the customer is based in an HST province or a GST/PST province.

Canadian Provinces and the HST

🥂 Five of Canada’s 13 provinces use the harmonized sales tax:

British Columbia, Saskatchewan, Québec, and Manitoba apply the provincial system in addition to the separate federal sales tax. Alberta and the territories (Northwest Territories, Nunavut, and Yukon) do not have a provincial or territorial sales tax and only collect the GST.

Registering and Collecting the HST

Canadian provinces (other than Alberta and the territories) established a percentage for PST coꦉllection and h🌸armonized it with the GST when they joined the HST program. So the exact amount of the HST differs depending on the province.

Owners of Canadian businesses that earn $30,000 or more per year in total revenue in participating provinces are responsible for collecting and remitting the tax. To apply the sales tax, the business operator must register for a GST/HST account through the CRA.

So-called small suppliers (business owners with firms earning less than $30,000 in annual revenue) are not required to charge or remit the HST. However, they can still voluntarily register to collect the tax, since doing so allows them to claim input tax credits on the goods and services they purchase to run their operations.

Exempted Goods and Services

While many goods and services are subject to the HST, some are 澳洲幸运5官方开奖结果体彩网:zero-rated or tax-exempt. A zero-rated commodity or service that has an HST rate of 0%. These include products like basic groceries, books, and many agricultural and fishery goods.

Goods exported from Canada for use outside the country are zero-rated. However, 澳洲幸运5官方开奖结果体彩网:nonresidents visiting Canada, such as tourists, are required to pay the HST. In some cases, they may qualify for an HST rebate.

The HST’s Effect on Taxpayers

The effectiveness of the HST and how it impacts consumers and taxpaye🦄rs remains. Critics claim that the HST shifts the tax burden from businesses to consumers. Proponents of the HST argue that it lowers taxes. They say that the HST system reduces the cost of doing business,🐽 which effectively lowers the prices of consumer goods and services.

The Bottom Line

Canada's harmonized sales tax combines federal (5%) and provincial taxes on goods and services in five provinces. It was introduced in 1997 to streamline the recording and collection of federal and PSTs. Critics argue that the HST shifts the burden of taxation to consumers, but proponents claim it ultimately benefits consumers by lowering costs.