Taxes in Canada

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Tourists have to pay taxes in Canada.

Quoted prices on goods and services are always net and excluding Federal and Provincial taxes.
The price you see quoted is not the price you will end up paying.
Federal and provincial sales tax are added at the till.

How much tax you pay depends on the taxes per province and the product or service you buy.

Not many foreign travellers are familiar with these regulations. They often get surprised during their travel in Canada.....


On this page:

Different kinds of taxes

Taxes on Lodging


Excise taxes


Taxes per province


Examples of different kind of taxes in Canada



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Different kinds of Taxes in Canada

Federal tax: GST – Goods and Services Tax

  • Each province and territory in Canada charges 5% GST on goods and services. This includes hotel and restaurant bills.
  • Exceptions: basic essentials such as groceries, medical and dental services, and financial services.
  • GST does not apply when non-resident consumers purchase goods in Canada and when these goods are shipped directly by the Canadian supplier to the non-resident's residence. (The shipping charges are also exempt from GST.)
  • Foreign visitors can not rebate GST on goods and services.

Provincial tax: PST –Provincial Sales Tax

  • Most provinces charge 5-10% PST.
  • Exceptions: Alberta and the 3 territories, Nunavut, Yukon, and Northwest Territories.
  • PST also applies to most goods and services, including accommodation and restaurant bills.
  • In Quebec the provincial sales tax is called QST (Quebec Sales Tax). 

Harmonized Sales Tax

Harmonized Sales Tax (HST) is a blended combination of PST and GST.

  • HST applies in New Brunswick, Newfoundland and Labrador, Ontario, Prince Edward Island and Nova Scotia.
  • Goods to which the Provincial Sales Tax or Harmonized Sales Tax are applied vary per province, as do the rates.



Taxes on Lodging in Canada

Accommodations to which taxes apply vary per province, region, and municipality.

Municipal and Regional District Tax

Municipal and Regional District Tax (MRDT) is a local tax collected by the municipal, regional or provincial governments. The revenue is utilized to promote or support local (mostly tourism) destinations.

Destination Marketing Fee

Destination Marketing Fee (DMF) on the other hand is simply individual businesses deciding to contribute funds to a joint marketing program. It is a business to business contractual arrangement.



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Excise Taxes in Canada

Both the federal and provincial governments impose excise taxes on goods such as cigarettes and alcohol. Canada has some of the highest rates of taxes on cigarettes and alcohol in the world.

It is generally accepted that higher prices discourage consumption of these items which have been known to increase health care costs. This way the user indirectly pays extra for health care.



Taxes in Canada per Province or Territory

Alberta                                  British Columbia                              Manitoba

New Brunswick                        Newfoundland and Labrador              Northwest Territories

Nova Scotia                            Nunavut                                       Ontario

Prince Edward Island                Quebec                                         Saskatchewan

Yukon Territory



Alberta

  • GST 5% No PST in Alberta
  • 4% Municipal and Regional District Tax (MRDT)
  • The town of Banff applies an additional 2 % Tourism Improvement Fee (TIF)
  • Some cities in Alberta levy an additional Destination Marketing Fee (DMF, up to 3%) on top of the 4% MRDT

DMF: 3% Calgary, 3% Edmonton, 2% Jasper, 3% Canmore,2% Lethbridge, 2% Medicine Hat, 1% Camrose, 1% Grand Prairie, 1% Slave Lake, Corporate Hotel DMFs:3% Canalta Hotel Group,3% Pomeroy Group


British Columbia

  • As of April 1, 2013: GST 5%+ PST 7% on most goods and services
  • 2% Municipal and Regional District Tax (MRDT) on lodging in 45 municipalities and regional districts
  • Select hotels in Vancouver levy an additional 1.5 % Destination Marketing Fee (DMF) on top of the 2% MRDT, which makes a total of 3.5% additional taxes on some accommodation in Vancouver


Manitoba

  • GST 5%
  • PST 8% 
  • The cities of Winnipeg and Thompson levy 5% tax on accommodation within the city
  • The city of Brandon adds $3,- per night


New Brunswick

  • 15% HST in New Brunswick
  • The city of Bathurst adds $2,- tax per night on accommodation
  • MRDT is 2% in Miramichi, Saint John and Charlotte County


Newfoundland and Labrador

  • 15% HST
  • Saint John’s and Gros Morne additional room tax: 3%


Northwest Territories

  • GST 5%
  • No PST


Nova Scotia

  • 15% HST
  • Halifax Regional Municipality: 2% tax on hotels with more than 20 rooms in Halifax and area


Nunavut (territory)

  • GST 5%
  • No PST
  • No additional hotel room taxes in Nunavut


Ontario

  • 13% HST
  • Some municipalities in Ontario charge additional taxes on lodging, others don't.
  • Alcoholic beverages purchased from licensed restaurants are subject to an Ontario rate of 10% rather than 8% of the PST part within HST

Overview of Destination Marketing Programs in Ontario

Prince Edward Island

  • 15% HST 
  • 2% Municipal and Regional District Tax (MRDT) on lodging in Charlottetown


Quebec

  • GST 5%
  • 9.975% QST (PST)
  • Hotel room tax: $2 per room night - Québec City and area, Outaouais, Charlevoix, Saguenay-Lac-Saint-Jean, Chaudière-Appalaches, Eastern Townships, Gaspésie, and Centre-du Québec
  • 3.5 % Accommodation tax applies on lodging in Montréal and Laval


Saskatchewan

  • GST 5%
  • PST 5%
  • 10% liquor consumption tax. The non-alcoholic portion of a restaurant meal is not taxed.
  • Saskatoon and Regina: 2 % Destination Marketing Fee (DMF)


Yukon (territory)

  • GST 5%
  • No PST
  • No additional hotel room taxes in the Yukon


Examples of different kind of taxes in Canada

All the different taxes in Canada can be confusing.
Here are some examples of my travel bills to make things clear.

My other half and I spent the night in a hostel in Banff, Alberta.
Quoted price per person per night: $35.00

x 2 units =     $70.00
2 % TIF         $ 1.40
5 % GST        $ 3.57 (5% over $ 71.40)
4 % MRDT      $ 2.86 (4% over $ 71.40)
Total costs   $77.83

The next day we drove to Saskatchewan where we enjoyed dinner.

2 meals $13.95 each=      $28.90
2 beer  $ 5.25 each=       $10.50
                                    $39.40
5% GST                         $ 1.97 (5 % over $ 39.40)
10% LQT                       $ 1.05 (10% over $10.50)
Total excluding gratuity   $42.42
15% Service                  $ 5.91 (15% over $39.40)
Total paid for dinner     $48.33

Later that week we drove into Quebec. Pouring rain made us buy an umbrella.

1 Umbrella    $14.95
5% GST        $ 0.75
9.755% QST  $ 1.49 
Final bill     $17.19


Sources

Hotel Association of Canada

Government of Canada: Canada Revenue Agency




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