Canadian GST/HST/PST explained for the American

My business is based in Phoenix Arizona and I sell my product in Canada through and  There wasn’t a web site that I can find that explained the Canadian tax system, so I ended up learning how the Canadian taxes worked by calling the tax agencies in Canada.

So here is a primer on the Canadian tax system:


GST stands for the Goods and Services Tax.  Practically this is the sales tax for the whole country of Canada.  This is the base tax rate of taxable goods in Canada.  If a good is taxable, GST is imposed on it.  Currently, the GST rate is 5%.  So if an item is taxable, at least there is a 5% tax rate on it.  GST is colleted by the Canada Revenue Agency (CRA).


PST stands for Provincial Sales Tax.  Each province can impose a PST on top of the GST.  In Quebec, they called it QST.


HST stands for the Harmonized Sales Tax.  Before HST, taxable items were imposed a GST and PST.  Later on, somebody had an idea to consolidate, or “harmonize”, the GST and PST and called it HST.  HST is collected by the CRA.

Note that the HST rate differs from province to province.  Provinces can set the PST portion of the HST and that makes the HST differ from province to province.  Even though the province sets the PST of the HST, the CRA still collects the HST.

Current State

Not all provinces participated in the HST system.  They use the old style of taxation, GST and PST, or just GST.  They are called the non-participating provinces.

The provinces that participated in the HST system are called the participating provinces.

CRA collects GST and HST.  PST that is not part of the HST is collected by the province.  CRA can only answer questions relating to GST and HST.  Questions about non-HST PST should refer to the provinces.  So in a participating province, HST is collected by CRA.  In a non-participating province, CRA collects the GST and the province collects the PST, if any.