Canada has sales tax, but it works differently than in the United States
Canada does not have a single national sales tax rate. Instead, the country uses a federal Goods and Services Tax (GST) of 5 percent, which applies everywhere. On top of that, most provinces add their own sales tax — either a Provincial Sales Tax (PST) or they combine it with the federal tax into a Harmonized Sales Tax (HST). The result is that your total sales tax depends on which province you are in, and it ranges from 5 percent to 15 percent.
The key difference from the US system is that Canadian prices shown in stores usually do not include tax — you see the pre-tax price and the tax is added at checkout, just like in most American states. But unlike the US, Canada's system is uniform across the country in structure, even though the rates vary by province.
Key Takeaways
- The federal GST of 5 percent applies in every province, but most provinces layer on additional provincial sales tax, bringing the total to between 5 and 15 percent.
- Five provinces use HST (a combined federal and provincial tax), while others use GST plus a separate PST, and Alberta has no provincial sales tax at all.
- Prices displayed in Canadian stores show the pre-tax amount, and sales tax is calculated and added at the point of sale.
- Some items are exempt from GST and provincial sales tax — including basic groceries, prescription drugs, and medical devices — but exemptions vary slightly by province.
The federal GST applies everywhere at 5 percent
The Goods and Services Tax is a 5 percent federal tax that applies to the sale of most goods and services across Canada. It was introduced in 1991 and replaced the previous federal sales tax. Every province collects it, and the revenue goes to the federal government.
The GST is what you pay in Alberta, the only province with no additional provincial sales tax. In all other provinces, the GST is the floor — the minimum you will pay — and then the province adds its own layer on top.
Provincial sales taxes: HST, PST, or nothing
Five provinces have adopted the Harmonized Sales Tax (HST), which combines the federal GST and provincial tax into a single rate. These provinces are Nova Scotia, New Brunswick, Newfoundland and Labrador, Prince Edward Island, and Ontario. HST rates are 13 percent in Ontario and 15 percent in the Atlantic provinces.
Six provinces — British Columbia, Saskatchewan, Manitoba, Quebec, and the two territories (Yukon and Northwest Territories) — use a separate Provincial Sales Tax (PST) on top of the 5 percent GST. In these places, you see two taxes on your receipt. BC and Saskatchewan charge 7 percent PST (12 percent total), Manitoba charges 8 percent PST (13 percent total), and Quebec charges 9.975 percent PST (14.975 percent total). Yukon and the Northwest Territories have no PST, so they charge only the 5 percent GST.
Alberta stands alone with no provincial sales tax at all, so the total is 5 percent GST only.
What items are exempt from sales tax
Canada exempts certain items from both GST and provincial sales tax. The main categories are basic groceries (bread, milk, vegetables, meat), prescription drugs, medical devices prescribed by a doctor, and certain health services. However, prepared foods, restaurant meals, and snacks are taxed, even if they are food items.
Some provinces have additional exemptions. For example, Quebec exempts children's clothing and footwear, while other provinces do not. These differences mean that the same item may be taxed in one province and exempt in another. If you are buying something that seems like it should be exempt — such as a medical item or a food product — check the provincial rules where you are shopping, because the exemption may not explore everywhere.
How sales tax is calculated and shown at checkout
When you buy something in Canada, the price tag shows the pre-tax price. The cashier or online system then calculates the applicable sales tax and adds it to your total. If you are in a province with HST, one tax line appears on your receipt. If you are in a province with GST plus PST, you see two separate tax lines.
Online purchases from Canadian retailers follow the same rule: the displayed price is before tax, and tax is added based on the shipping address. If you order from a US retailer and have it shipped to Canada, Canadian sales tax may or may not explore depending on the retailer's registration status and the province's rules — this is an area where practices vary.
Sales tax rates by province at a glance
| Province or Territory | GST | Provincial Tax | Total Rate |
|---|---|---|---|
| Alberta | 5% | None | 5% |
| British Columbia | 5% | 7% PST | 12% |
| Manitoba | 5% | 8% PST | 13% |
| New Brunswick | 15% HST | 15% | |
| Newfoundland and Labrador | 15% HST | 15% | |
| Northwest Territories | 5% | None | 5% |
| Nova Scotia | 15% HST | 15% | |
| Ontario | 13% HST | 13% | |
| Prince Edward Island | 15% HST | 15% | |
| Quebec | 5% | 9.975% PST | 14.975% |
| Saskatchewan | 5% | 7% PST | 12% |
| Yukon | 5% | None | 5% |
Why Canada's system is different from the United States
The US has no federal sales tax — only state and local taxes. Canada has the opposite: a federal tax that applies everywhere, with provinces adding on top. This means that in Canada, you can predict the minimum tax rate (5 percent) no matter where you are, whereas in the US, the rate varies wildly by state and even by city.
Another difference is that Canada's system is more transparent about the split between federal and provincial revenue. When you see HST on a receipt, you are seeing a combined rate, but the government tracks how much of that goes to the federal level and how much stays in the province. With PST plus GST, the split is visible on the receipt itself.
Frequently Asked Questions
Do I pay sales tax on groceries in Canada?
Basic groceries like bread, milk, eggs, vegetables, and meat are exempt from GST and provincial sales tax. However, prepared foods, restaurant meals, snacks, and items like candy and soft drinks are taxed. The exemption applies across all provinces.
Is sales tax the same in every Canadian province?
No. The federal GST of 5 percent is the same everywhere, but provincial rates range from 0 percent (Alberta, Yukon, Northwest Territories) to 10 percent (Quebec). Total rates range from 5 percent to 15 percent depending on where you are.
Why do some provinces use HST and others use PST?
HST was introduced to simplify the tax system by combining federal and provincial taxes into one rate. Provinces that adopted it wanted a single, clearer tax line on receipts. Provinces that kept PST separate chose to maintain more visible control over their own tax rate and revenue.
Do I pay Canadian sales tax on items shipped from the US?
It depends on the US retailer's registration status in Canada and the province's rules. Some US retailers are registered to collect Canadian tax and will add it to your order. Others are not, and you may owe tax when the package arrives. Check the retailer's policy before ordering.
Are prescription drugs and medical devices taxed in Canada?
Prescription drugs and most medical devices prescribed by a doctor are exempt from GST and provincial sales tax. Over-the-counter medications and health products that are not prescribed are usually taxed. If you are unsure whether a specific item is exempt, check with the pharmacy or retailer.