Summary: GST, HST, and PST are all sales taxes used in Canada, but they serve different purposes and apply differently depending on the province. GST is a 5% federal tax that applies across Canada, while PST is a separate provincial tax charged in British Columbia, Manitoba, Saskatchewan, and Quebec. HST combines the federal GST with a provincial portion into one tax in Ontario, Nova Scotia, New Brunswick, Newfoundland and Labrador, and Prince Edward Island. Understanding these differences can help businesses and consumers determine which taxes apply to a purchase, sale, or imported shipment.
Understanding Canadian sales taxes may seem straightforward until you encounter several different terms during a purchase or import process: GST, HST, and PST. Many businesses assume these taxes work in exactly the same way, but they serve different purposes and may apply differently depending on the province. Whether you’re selling goods in Canada for the first time or importing products across the border, understanding what each tax means can help you better prepare for the costs involved.
Although all three taxes are connected to the Canadian sales tax system, they focus on different parts of taxation. GST is a federal tax applied across Canada, PST is a separate provincial tax, and HST combines the federal and provincial portions into one harmonized tax. Understanding how these taxes differ can help you determine the correct tax treatment and avoid unexpected costs.
What is GST?
The Goods and Services Tax (GST) is a federal value-added tax that applies to most goods and services across Canada. The current GST rate is 5%, and it applies in every province and territory, including on imported goods.
Although every province uses the federal GST system, some provinces have additional provincial sales taxes while others combine the provincial portion with GST. Alberta, Northwest Territories, Nunavut, and Yukon do not have a separate provincial sales tax, meaning the standard sales tax on most goods and services in these jurisdictions is 5%.
GST may apply to everyday purchases, business transactions, and imported goods. For imports into Canada, GST is generally payable at the border based on the value of the imported shipment, separate from any customs duties that may apply.
What is PST?
Provincial Sales Tax (PST) is a separate tax administered at the provincial level. Unlike GST, PST is not a federal tax, and its rate and registration requirements can vary depending on the province.
PST is currently used in four provinces:
- British Columbia: 7% PST
- Manitoba: 7% Retail Sales Tax (RST)
- Saskatchewan: 6% PST
- Quebec: 9.975% Quebec Sales Tax (QST)
When combined with the 5% federal GST, the standard total sales tax rates are 12% in British Columbia and Manitoba, 11% in Saskatchewan, and 14.975% in Quebec.
PST is generally calculated separately from GST, and the two taxes may appear as separate line items on an invoice or receipt. Businesses operating in provinces with separate provincial sales taxes may also need to meet provincial registration requirements in addition to federal GST/HST requirements.
What is HST?
The Harmonized Sales Tax (HST) combines the federal GST with a provincial portion into a single tax. Instead of charging GST and a separate provincial sales tax, businesses in HST provinces generally charge one combined rate.
Five provinces currently use HST:
- Ontario: 13%
- Nova Scotia: 14%
- New Brunswick: 15%
- Newfoundland and Labrador: 15%
- Prince Edward Island: 15%
HST is collected federally through the Canada Revenue Agency, which helps simplify tax collection compared with provinces that require separate GST and PST reporting.
One important rate change to keep in mind is Nova Scotia's reduction from 15% to 14% on April 1, 2025. If you are using older Canadian sales tax information, make sure the rate has been updated.
How are GST, HST, and PST different?
Although these taxes are often discussed together, they are not interchangeable. GST is the federal component that applies across Canada, PST is a separate provincial tax used in four provinces, and HST combines the federal and provincial portions into one tax.
The differences may also affect how businesses calculate prices, register for taxes, issue invoices, and handle imported goods. For example, a sale in British Columbia may involve 5% GST plus 7% PST, while a sale in Ontario generally involves a single 13% HST.
The province where the sale or transaction takes place plays an important role in determining which tax applies. Understanding these differences can make it easier to calculate the correct amount and plan for your overall costs.
What are the current sales tax rates in Canada?
Canada's sales tax structure can be grouped into three main categories:
- GST only: Alberta, Northwest Territories, Nunavut, and Yukon — 5%
- GST + PST: British Columbia — 12%; Manitoba — 12%; Saskatchewan — 11%; Quebec — 14.975%
- HST: Ontario — 13%; Nova Scotia — 14%; New Brunswick — 15%; Newfoundland and Labrador — 15%; Prince Edward Island — 15%
These are standard rates for most taxable goods and services. Certain products, including some basic groceries, prescription drugs, and medical devices, may be zero-rated or exempt depending on the applicable rules.
Knowing the province and the type of goods or services involved is important before calculating the final tax amount.
Do healthy businesses still need to understand GST, HST, and PST?
Yes, of course! Even if a business regularly sells products in Canada, it cannot assume that the same sales tax treatment applies everywhere. The tax structure can change depending on the province, the type of transaction, and whether the goods are imported.
Understanding the applicable taxes helps businesses prepare accurate invoices, establish appropriate pricing, and avoid unexpected tax obligations. Businesses that regularly import goods should also understand how GST is charged at the border and how it may be recovered through the appropriate tax mechanisms.
For businesses making taxable supplies in Canada, the current small-supplier threshold for mandatory GST/HST registration is generally $30,000 in annual revenue. Businesses below that threshold may still choose to register voluntarily in certain circumstances.
Frequently Asked Questions
Is HST the same as GST?
No. HST includes GST, but the two terms do not mean exactly the same thing. HST is a combined tax that includes the 5% federal GST and a provincial component. For example, Ontario's 13% HST already includes the federal GST portion.
Is HST the same as PST and GST?
HST replaces the need to charge GST and PST separately in provinces that use the harmonized system. In HST provinces, businesses generally charge one combined tax instead of separate GST and PST.
What's the difference between PST and HST?
PST is a separate provincial tax charged in addition to the federal GST. HST combines the federal and provincial portions into one harmonized tax collected federally. As a result, GST and PST may appear as separate taxes on an invoice, while HST generally appears as one combined tax.
Do I pay PST and GST, or HST?
It depends on the province. In British Columbia, Manitoba, Saskatchewan, and Quebec, GST and a separate provincial tax generally apply. In Ontario, Nova Scotia, New Brunswick, Newfoundland and Labrador, and Prince Edward Island, HST applies. Alberta and the three territories generally charge only the 5% GST.
What does PST stand for?
PST stands for Provincial Sales Tax. Manitoba calls its provincial tax the Retail Sales Tax (RST), while Quebec uses the Quebec Sales Tax (QST). These are provincial taxes that operate separately from the federal GST.
Know the difference before you calculate your costs
Knowing whether GST, HST, or PST applies is an important step when calculating the true cost of goods and services in Canada. GST applies at 5% across Canada, PST is added separately in British Columbia, Manitoba, Saskatchewan, and Quebec, while HST combines federal and provincial taxes in five provinces.
For imports, the calculation can be different from a normal consumer purchase. Imported goods generally incur 5% GST at the Canadian border, regardless of whether the final destination is an HST or PST province. Customs duties, clearance fees, the value of the goods, and the correct HS classification can also affect the total amount payable.
Understanding the applicable tax structure before shipping or selling can help businesses plan their costs, prepare accurate pricing, and reduce unexpected charges. Whether you're importing goods, selling products, or expanding into another Canadian province, knowing the difference between GST, HST, and PST can make the process much easier.