Canadian Tax: GST, HST, and PST by Province

Canadian Tax: GST, HST, and PST by Province

Overview of Canadian indirect tax

Canada levies indirect tax at both the federal and provincial levels. The federal Goods and Services Tax (GST) is 5% and applies nationwide. Most provinces have harmonized their provincial sales tax with the GST into a single Harmonized Sales Tax (HST), administered jointly by the Canada Revenue Agency. A few provinces (British Columbia, Saskatchewan, Manitoba) maintain a separate Provincial Sales Tax (PST) collected independently. Quebec has its own system: the QST (Quebec Sales Tax) operates separately from GST but is administered by Revenu Québec.

Alberta and the three territories (Nunavut, Northwest Territories, and Yukon) have no provincial sales tax, so only the 5% federal GST applies.

GST/HST/PST rates by province and territory

HST is collected as a single tax; the federal and provincial components are embedded within it. For HST provinces, there is no need to separately calculate GST — the combined rate is applied.

When does Canadian tax apply?

GST/HST applies to most goods and services sold or provided in Canada. The key question is whether your supply is "taxable" (standard-rated), "zero-rated" (0% but still a taxable supply allowing input tax credits), or "exempt" (no tax and no input tax credit recovery).

Taxable supplies (standard rate): Most retail goods, professional services, software, telecommunications, digital services.

Zero-rated supplies: Basic groceries (most food items), prescription drugs, medical devices, exports of goods and services, international travel.

Exempt supplies: Most financial services, residential rent, healthcare, educational services (primary/secondary schools, most post-secondary programs), child care, legal aid services.

GST/HST registration threshold

A business must register for GST/HST if its worldwide taxable supplies exceed CAD $30,000 in a single calendar quarter or over four consecutive quarters. Small suppliers below this threshold are not required to register (though they may choose to do so voluntarily).

For non-resident businesses selling digital services to Canadian consumers, the threshold applies differently: if you supply digital services to "specified Canadian recipients" (private individuals or non-registered businesses in Canada) and your supplies exceed CAD $30,000 in a 12-month period, you must register for the "simplified GST/HST" framework regardless of your location.

PST registration (BC, Saskatchewan, Manitoba)

PST in British Columbia, Saskatchewan, and Manitoba is separate from GST. Each province has its own registration requirements:

• British Columbia (PST 7%): Register if you sell taxable goods or software to BC customers, or if you provide certain services in BC. Non-residents must register if they make retail sales into BC that exceed a threshold or if they have a business presence in BC.
• Saskatchewan (PST 6%): Register if you sell taxable tangible goods or related services for use or consumption in Saskatchewan.
• Manitoba (RST 7%): Register if you make retail sales or provide taxable services in Manitoba.

PST does not flow through the supply chain the way GST/HST does — there are no input tax credits for PST paid on business purchases. It is a pure consumer tax.

Quebec Sales Tax (QST)

Quebec applies its own 9.975% QST on top of the 5% federal GST, for a combined rate of 14.975%. QST is administered by Revenu Québec (not the CRA). Like GST/HST, QST is a value-added tax with input tax refunds (ITRs) available to registrants. Non-residents supplying digital services to Quebec consumers must register for QST if their supplies to private consumers exceed CAD $30,000.

Digital services and non-resident sellers

Since 2021, Canada has required non-resident businesses that supply digital services directly to Canadian consumers to register for the simplified GST/HST regime. This applies to streaming services, SaaS, downloadable software, e-books, online courses, and any other electronic service consumed by a private individual (not a registered business) in Canada.

Under the simplified regime:

• Register once with the CRA (no need to register in each province separately for HST)
• Charge the HST rate for HST provinces, the GST rate for other provinces
• File quarterly or annually via the CRA's simplified portal
• You do not need to obtain a full GST/HST registration number — a simplified registration is sufficient

Quebec has its own equivalent non-resident digital services registration, also effective 2021, which must be done separately with Revenu Québec.

How Clearvo handles Canadian tax

Pass the seller province (or "federal" for non-resident sellers), the buyer's province/territory, the transaction type (B2B/B2C), and the product description. Clearvo returns the correct combined rate, identifies whether the supply is taxable/zero-rated/exempt, and breaks down the federal vs. provincial components. Get your production API key immediately on sign-up — no sales call, no onboarding delay.

{
  "seller_country": "CA",
  "buyer_country": "CA",
  "buyer_province": "ON",
  "transaction_type": "B2C",
  "line_items": [
    {
      "description": "SaaS subscription — annual plan",
      "amount": 1200.00,
      "currency": "CAD"
    }
  ]
}

Response:

{
  "tax_rate": 0.13,
  "tax_amount": 156.00,
  "tax_type": "HST",
  "jurisdiction": "Ontario",
  "breakdown": {
    "federal_gst": 0.05,
    "provincial_hst": 0.08
  },
  "taxable": true,
  "supply_type": "taxable"
}

Getting started

Test Canadian tax calculations in the sandbox environment using csk_test_* keys. Full documentation at clearvo.io/docs.

Related country guides

• United States — sales tax across all 50 states
• Australia — GST and digital services tax
• Germany — EU VAT and XRechnung e-invoicing

Frequently asked questions

Does Canada have e-invoicing mandates?
Canada does not currently have a mandatory B2B e-invoicing requirement. GST/HST invoices must meet certain content standards (supplier name and registration number, date, description, total consideration, GST/HST amount) but the format is not prescribed electronically. Canada Revenue Agency has published guidance on electronic records and invoices but has not mandated a specific XML format or authority submission flow.

Do I need to charge GST/HST if I am selling B2B to a Canadian business?
If the Canadian buyer is a registered GST/HST business and you make a taxable supply to them, you generally must charge GST/HST. However, if the supply is an export (physically delivered outside Canada), it is zero-rated and no tax is charged. For digital services supplied cross-border to a GST/HST registrant, the buyer self-assesses under the reverse-charge mechanism — the non-resident seller does not need to charge tax.

What is the difference between GST and HST?
GST is the 5% federal Goods and Services Tax that applies throughout Canada. HST is a harmonized combination of the federal GST and a provincial component, applied as a single tax in participating provinces. Both are administered by the Canada Revenue Agency. Provinces that have not harmonized (BC, Saskatchewan, Manitoba, Quebec) collect their provincial tax separately.

Does Clearvo handle both GST/HST and PST?
Yes. For provinces with a harmonized HST, Clearvo applies the single combined rate. For BC, Saskatchewan, and Manitoba, Clearvo calculates both the federal GST and the separate provincial PST/RST and returns both as line items in the response breakdown.