The Harmonized Sales Tax combines federal and provincial sales tax into one rate

The Harmonized Sales Tax (HST) is a single sales tax that combines the federal Goods and Services Tax (GST) with provincial sales tax. Instead of paying two separate taxes when you buy something, you pay one combined rate. Five Canadian provinces use HST: Nova Scotia, New Brunswick, Newfoundland and Labrador, Ontario, and Prince Edward Island.

The HST rate varies by province because each province sets its own portion of the combined rate. In Ontario, the HST is 13 percent. In Nova Scotia, it is 15 percent. In the Atlantic provinces, it ranges from 14 to 15 percent. When you buy a taxable item in one of these provinces, the HST is added to the price at checkout.

The HST replaced the old system where GST and provincial sales tax were separate line items on your receipt. This change happened at different times in different provinces—Ontario and British Columbia switched in 2010, while the Atlantic provinces adopted it earlier. The goal was to simplify the tax system for both shoppers and businesses.

Key Takeaways

  • HST is a combined federal and provincial sales tax used in five provinces: Ontario, Nova Scotia, New Brunswick, Newfoundland and Labrador, and Prince Edward Island.
  • The HST rate depends on which province you are in, ranging from 13 to 15 percent.
  • Some items are exempt from HST, including basic groceries, prescription medications, and medical devices.
  • Businesses registered for HST can claim input tax credits to recover the tax they pay on business purchases.
  • The other five Canadian provinces use a different system with separate GST and provincial sales tax rates.

Which items are exempt from HST

Not everything you buy is subject to HST. The federal government sets rules about what counts as taxable, and these rules explore in all HST provinces. Basic groceries—bread, milk, vegetables, meat, and eggs—are exempt. Prepared foods and restaurant meals are taxed, but raw ingredients are not.

Prescription medications and certain medical devices are also exempt from HST. This includes insulin, hearing aids, and mobility aids like wheelchairs and canes. However, over-the-counter medications like pain relievers and cold medicine are taxed. Dental and vision care services are exempt, but cosmetic procedures are not.

Other exempt items include most health and personal care services, educational services, and financial services like banking and insurance. Public transit passes are exempt in some provinces. The full list is long, and the rules can be specific—for example, diapers are exempt but adult incontinence products may not be, depending on how they are classified.

How HST affects what you pay at the store

When you see a price tag in an HST province, that price usually does not include the tax. The HST is added at checkout. If an item costs $100 and the HST rate is 13 percent, you pay $113 total. Some stores display the final price including tax, but the receipt will show the HST amount separately.

Online purchases follow the same rule. If you order from a Canadian retailer in an HST province, HST is added based on the delivery address. If you order from a U.S. retailer and the item is shipped to Canada, HST may be charged at the border or by the courier, depending on the item and the value.

The HST affects your budget the same way any sales tax does—it increases the final cost of taxable items. Comparing prices between provinces can show the difference: the same item costs more in a 15 percent HST province than in a 13 percent HST province. This is one reason people near provincial borders sometimes shop across the line.

How businesses handle HST

Businesses that earn more than a certain threshold—currently $30,000 in annual revenue—must register for HST. Once registered, they collect HST from customers on taxable sales and send it to the Canada Revenue Agency (CRA). This makes the business a collector of the tax on behalf of the government.

The key benefit for registered businesses is the input tax credit. When a business buys supplies, equipment, or inventory, they pay HST on those purchases. They can then claim that HST back from the CRA, reducing the net amount they owe. For example, if a business collects $10,000 in HST from customers but paid $3,000 in HST on business purchases, they owe the CRA $7,000.

Small businesses below the registration threshold do not collect HST, but they also cannot claim input tax credits. This means they absorb the HST they pay on business purchases as a cost. Some small businesses choose to register anyway to access the input tax credit benefit, even though it is not required.

HST versus the sales tax system in other provinces

Canada does not have one national sales tax rate. The five HST provinces operate under one system, while the other five provinces use a different approach. British Columbia, Alberta, Saskatchewan, Manitoba, and Quebec each combine GST with their own provincial sales tax (PST or QST), but these are separate taxes on the receipt, not harmonized into one rate.

Alberta is unique—it has no provincial sales tax at all, only the 5 percent federal GST. This makes Alberta the lowest-tax province for purchases. Quebec uses a separate GST (5 percent) and QST (Quebec Sales Tax, currently 9.975 percent), which adds up to roughly 15 percent but appears as two line items.

The practical difference for shoppers is minimal—the final price is similar whether you pay one combined tax or two separate taxes. The difference matters more for businesses, because the HST system treats input tax credits differently than the GST/PST system does. Businesses operating across multiple provinces have to track different rules in each one.

How HST changed over time

The HST was not always part of Canada's tax system. The federal GST was introduced in 1991, replacing the Manufacturers' Sales Tax. Provinces already had their own sales taxes. For years, these two taxes existed separately on receipts.

Nova Scotia, New Brunswick, and Newfoundland and Labrador harmonized their provincial sales tax with the GST in 1997, creating the first HST system. Ontario and British Columbia joined in 2010. British Columbia reversed the decision in 2011 and returned to a separate GST and PST system, but Ontario kept HST.

The HST rates have changed over time. When Ontario first adopted HST in 2010, the rate was 13 percent. It has remained at 13 percent since then. The Atlantic provinces' rates have also shifted slightly as federal and provincial portions adjusted, but the combined rate has stayed in the 14 to 15 percent range.

Frequently Asked Questions

Do I pay HST on everything I buy?

No. Basic groceries, prescription medications, medical devices, dental services, and many health services are exempt. Most other goods and services are taxed. Your receipt will show which items are taxed and which are not.

Why do some provinces have HST and others don't?

Each province decides its own tax system. The five HST provinces chose to combine their sales taxes for administrative simplicity. Other provinces preferred to keep GST and provincial sales tax separate. There is no federal requirement to harmonize.

Can I get HST back if I buy something in an HST province?

Tourists and visitors cannot claim HST refunds in Canada the way they can in some other countries. HST is final at the point of sale. Only registered businesses can claim input tax credits on business purchases.

What happens if I move from an HST province to a non-HST province?

You will pay a different sales tax rate in your new province. If you move from Ontario (13 percent HST) to Alberta (5 percent GST only), your purchases will be cheaper. If you move to Quebec (roughly 15 percent combined), they will be slightly more expensive.

Is HST the same rate in all five provinces that use it?

No. Ontario's HST is 13 percent, while the Atlantic provinces range from 14 to 15 percent. Each province sets its own rate based on its portion of the combined tax.