Canada’s tax landscape varies significantly across provinces and territories, with different rates for Goods and Services Tax (GST), Provincial Sales Tax (PST), and Harmonized Sales Tax (HST). Understanding these differences is crucial for residents, businesses, and investors. This guide provides an in-depth look at the various tax rates applicable in Canada, covering GST, PST, HST, restaurant and food taxes, real estate taxes, and other relevant levies.
Table of contents
Overview of Canadian Tax Structure
Canada’s tax system is divided into federal and provincial/territorial levels. The federal Goods and Services Tax (GST) applies uniformly across the country, while provinces and territories may impose additional taxes, such as PST (Provincial Sales Tax) or HST (Harmonized Sales Tax). These variations lead to significant differences in the overall tax burden across Canada.
Breakdown of Tax Rates by Province and Territory
GST, PST, and HST Rates Across Canada
The combination of GST, PST, and HST varies significantly by region. Alberta stands out for having no PST or HST, while other provinces like Quebec and Ontario have higher combined rates.
| Province/Territory | GST Rate (%) | PST Rate (%) | HST Rate (%) | Combined Rate (%) |
|---|---|---|---|---|
| Alberta | 5% | N/A | N/A | 5% |
| British Columbia | 5% | 7% | N/A | 12% |
| Manitoba | 5% | 7% | N/A | 12% |
| New Brunswick | N/A | N/A | 15% | 15% |
| Newfoundland and Labrador | N/A | N/A | 15% | 15% |
| Northwest Territories | 5% | N/A | N/A | 5% |
| Nova Scotia | N/A | N/A | 15% | 15% |
| Nunavut | 5% | N/A | N/A | 5% |
| Ontario | N/A | N/A | 13% | 13% |
| Prince Edward Island | N/A | N/A | 15% | 15% |
| Quebec | 5% | 9.975% | N/A | 14.975% |
| Saskatchewan | 5% | 6% | N/A | 11% |
| Yukon | 5% | N/A | N/A | 5% |
Key Points:
- Alberta: Only GST of 5%, no additional provincial taxes.
- Ontario: 13% HST applied to most goods and services.
- Quebec: Combined GST and PST of 14.975%, one of the highest in Canada.
Restaurant and Food Taxes in Canada
Restaurant and food taxes vary by province, primarily influenced by the combined GST, PST, or HST rates. In provinces with HST, the entire tax applies to restaurant meals, whereas in regions with separate GST and PST, only certain items may be taxed differently.
Example Calculation for Restaurant Tax:
Province: Ontario
- Total Bill (before tax): $100
- HST (13%): $13
- Total Bill (after tax): $113
Province: Alberta
- Total Bill (before tax): $100
- GST (5%): $5
- Total Bill (after tax): $105
Real Estate and Property Taxes in Canada
Property taxes are a major source of revenue for local governments across Canada. These taxes vary by municipality and are calculated based on the assessed value of properties.
| City | Province | Property Tax Rate ($ per $1,000 of assessed value) |
|---|---|---|
| Toronto | Ontario | $9.5 |
| Vancouver | British Columbia | $2.8 |
| Calgary | Alberta | $7.6 |
| Montreal | Quebec | $11.0 |
| Halifax | Nova Scotia | $12.4 |
| Ottawa | Ontario | $10.0 |
| Winnipeg | Manitoba | $12.3 |
| Regina | Saskatchewan | $10.5 |
| St. John’s | Newfoundland | $11.8 |
| Edmonton | Alberta | $8.0 |
| Victoria | British Columbia | $5.0 |
| Saskatoon | Saskatchewan | $11.0 |
| Charlottetown | Prince Edward Island | $13.0 |
| Whitehorse | Yukon | $10.2 |
| Yellowknife | Northwest Territories | $10.7 |
| Iqaluit | Nunavut | $9.0 |
| Fredericton | New Brunswick | $11.5 |
| Quebec City | Quebec | $10.8 |
Key Points:
- Vancouver: Has one of the lowest property tax rates among major cities, benefiting homeowners in high-value areas.
- Calgary and Edmonton: Offer competitive rates compared to other major cities, reflecting Alberta’s overall tax-friendly environment.
- Halifax and Charlottetown: Feature some of the highest property tax rates, driven by local infrastructure and education funding needs.
Other Taxes in Canada
- Fuel Tax: Varies by province, with Alberta offering the most dynamic relief program based on oil prices.
| Province | Fuel Tax Rate (cents/litre) |
|---|---|
| Alberta | 0 – 13 |
| Ontario | 14.7 |
| Quebec | 19.2 |
| British Columbia | 16.5 |
| Saskatchewan | 15 |
2. Tobacco Tax: Applies to all tobacco products, with rates designed to discourage usage.
| Province | Cigarette Tax (cents/stick) | Smokeless Tobacco (cents/gram) |
|---|---|---|
| Alberta | 30 | 35 |
| Ontario | 29.8 | 33 |
| Quebec | 32 | 36 |
| British Columbia | 29 | 34 |
Tourism Levy: A tax applied to temporary accommodations in several provinces, such as Alberta’s 4% levy.
Frequently Asked Questions (FAQs) About Tax Rates
Edmonton follows Alberta’s tax structure, with only a 5% GST and no PST or HST.
GST on food items in restaurants is 5%, with no additional provincial food tax.
No, Alberta does not have a provincial sales tax (PST) or Harmonized Sales Tax (HST).
Most basic groceries are exempt from GST, making them tax-free.
The tax on restaurant food in Edmonton is 5% GST, with no additional provincial tax.
Conclusion
Alberta’s tax-friendly environment, characterized by the absence of PST and HST, makes it an appealing location for both businesses and consumers. Understanding these tax structures helps residents and business owners make more informed financial decisions. For detailed advice or consultation, feel free to contact Yeg Tax Master’s expert team.