You're standing at a checkout counter in Toronto or Vancouver, looking at a price tag that says $20. But when the cashier rings it up, the total jumps to $22.60 or $21. That extra bit? That’s basically the GST—and usually its partner in crime, the PST or HST—working its way into your receipt.
Honestly, taxes are confusing. You've probably heard people complain about the "Goods and Services Tax" since it was introduced back in 1991, but unless you're an accountant, the math usually feels like a headache.
In simple terms, the GST is a 5% federal tax that applies to almost every transaction in the country. It doesn't matter if you're buying a new laptop or getting a haircut; the federal government wants its 5% cut. But depending on which province you're standing in, that 5% might be hidden inside a larger 13% or 15% tax called the HST.
Let's break down how this actually hits your wallet and, more importantly, how some of that money might actually end up back in your bank account.
GST in Canada: The 5% Rule and the HST Twist
The Goods and Services Tax (GST) is a value-added tax. It's not a "hidden" tax—it's right there on your receipt—but it feels hidden because the price on the shelf rarely includes it.
✨ Don't miss: Mortgage rates predictions 2025: Why the experts were wrong and what actually happened
Across the whole country, the federal GST rate is 5%.
However, Canada has a "choose your own adventure" style of sales tax. Some provinces decided to merge their local provincial sales tax (PST) with the federal GST. This creates the Harmonized Sales Tax (HST).
If you are in Ontario, you don't see "GST" on your bill; you see "HST" at 13%. In the Maritimes, it’s usually 15%. Even though it has a different name, that 5% federal GST is still tucked inside that larger number.
Current Rates Across the Provinces (As of 2026)
| Region | Tax Type | Total Rate |
|---|---|---|
| Alberta, Nunavut, Yukon, NWT | GST Only | 5% |
| Ontario | HST | 13% |
| New Brunswick, PEI, NL | HST | 15% |
| Nova Scotia | HST | 14% (Changed in 2025) |
| Quebec | GST + QST | 14.975% |
| British Columbia | GST + PST | 12% |
| Manitoba | GST + PST | 12% |
| Saskatchewan | GST + PST | 11% |
Alberta is the "unicorn" here. Because they have no provincial sales tax, you only pay the 5% GST. It’s one of the few places in Canada where a $100 item actually costs $105 at the till.
Who Actually Pays the GST?
Technically, everyone pays it at the cash register. But the burden is different if you’re a consumer versus a business owner.
For you and me buying groceries or a new pair of shoes, the GST is a final cost. We pay it, and it’s gone. However, for a business, the GST is more like a temporary pass-through. If a coffee shop buys milk, they pay GST to the dairy farmer. But they then "claim" that tax back from the government as an Input Tax Credit (ITC).
The idea is that only the "final" consumer truly pays the tax.
There are also things called Zero-Rated goods. These are items where the tax rate is 0%. You won't see GST on:
- Basic groceries (milk, bread, vegetables).
- Prescription drugs and many medical devices.
- Most feminine hygiene products.
- Exported goods (if you sell a sweater to someone in London, you don't charge Canadian GST).
Then there are Exempt supplies. This sounds the same as zero-rated, but it's a bit different for businesses. Things like residential rent, most health and dental services, and music lessons don't have GST added to them.
💡 You might also like: Why Dark Money Staging Las Vegas Is Changing the Real Estate Game
The "Small Supplier" Secret for Freelancers
If you’ve started a side hustle or you’re freelancing in 2026, you might be panicking about whether you need to charge your clients GST.
Here is the deal: if your total taxable revenue is under $30,000 over four consecutive calendar quarters, you are considered a "Small Supplier."
You don't have to register for a GST/HST number. You don't have to charge your clients the tax.
But there’s a catch. If you don't register, you can't claim back the GST you pay on your own business expenses. If you're spending a lot on equipment or software, it actually might be worth registering voluntarily just to get those tax credits back.
Just remember, once you hit that $30,000 threshold, the Canada Revenue Agency (CRA) expects you to register immediately. If you wait too long, they might come looking for the tax you should have collected out of your own pocket.
Getting Paid: The GST/HST Credit
The government knows that a flat 5% tax hits lower-income families harder than the wealthy. To balance this out, the CRA sends out "rebate" checks—the GST/HST Credit.
✨ Don't miss: Lost & Found OTR: What’s Actually Happening in the Over-the-Road Trucking Recovery World
It’s basically a "sorry we taxed your sneakers" payment.
In 2026, these payments land in bank accounts four times a year: January 5, April 2, July 3, and October 5.
For the 2025-2026 benefit year, the amounts are roughly:
- $533 for single individuals.
- $698 for married or common-law couples.
- $184 for each child under 19.
You don't even have to "apply" for this anymore. As long as you file your taxes every year—even if you made zero dollars—the CRA automatically checks if you're eligible and starts sending the money.
If your family income is over about $56,000 to $60,000 (depending on your kids), the credit starts to fade away until it hits zero.
Common Myths About GST in Canada
I've heard some weird stuff over the years about how this tax works.
One big misconception is that you have to pay GST on used goods. If you buy a used car from a dealership, yes, you pay it. But if you buy a dusty old lamp from your neighbor at a garage sale? No. The "Small Supplier" rule usually covers casual sales between individuals.
Another thing people get wrong is thinking GST applies to everything. It doesn't. You won't find it on your bridge tolls, your water bill, or most educational services.
Actionable Steps for Your Wallet
Whether you're a shopper or a business owner, here is how to handle the GST without losing your mind:
- File your taxes, even if you’re broke. This is the only way to get the GST/HST Credit. If you don't file, the CRA assumes you don't want the money.
- Watch the $30k mark. If you’re a freelancer, keep a spreadsheet of your gross sales. The moment you look like you'll pass $30,000 in a 12-month period, head to the CRA website and register for a Business Number.
- Check your receipts in "GST-only" provinces. If you travel to Alberta or the Territories, remember the price is 5% higher than the tag. It helps with the sticker shock at the register.
- Save your business receipts. If you are registered for GST, every dollar of tax you pay on your business laptop, phone bill, or office rent is money you get back when you file your GST return.
The GST is just a part of life in Canada. It pays for the roads, the hospitals, and the services we use. It’s not exactly fun to pay, but at least now you know where that extra few bucks on your receipt is actually going.