Heads up: this is general information, not tax advice. Tax rules change and edge cases exist. For your specific situation — especially if you sell across provinces or to international customers — talk to a Canadian accountant or check directly with the Canada Revenue Agency (CRA) and your provincial tax authority. All rates in this guide were verified in 2026 from CRA, provincial revenue ministries, and industry sources.

The four-tax overview

Canada has one federal sales tax (GST) and three provincial systems that sit alongside or replace it:

GST (Goods and Services Tax): the federal 5% tax, applies everywhere.
HST (Harmonized Sales Tax): a combined federal + provincial tax used in five eastern provinces.
PST / RST (Provincial / Retail Sales Tax): a separate provincial tax in BC, Saskatchewan, and Manitoba (called "RST" in Manitoba).
QST (Quebec Sales Tax): Quebec's own provincial tax, administered by Revenu Québec.

A province uses either HST or GST+PST/QST — never both. Alberta and the three territories use only GST.

2026 rates by province and territory

Province / Territory	System	Federal	Provincial	Total
Alberta (AB)	GST only	5% GST	—	5%
British Columbia (BC)	GST + PST	5% GST	7% PST	12%
Manitoba (MB)	GST + RST	5% GST	7% RST	12%
New Brunswick (NB)	HST	15% HST		15%
Newfoundland & Labrador (NL)	HST	15% HST		15%
Northwest Territories (NT)	GST only	5% GST	—	5%
Nova Scotia (NS)	HST	14% HST (reduced from 15% on April 1, 2025)		14%
Nunavut (NU)	GST only	5% GST	—	5%
Ontario (ON)	HST	13% HST		13%
Prince Edward Island (PE)	HST	15% HST		15%
Quebec (QC)	GST + QST	5% GST	9.975% QST	14.975%
Saskatchewan (SK)	GST + PST	5% GST	6% PST	11%
Yukon (YT)	GST only	5% GST	—	5%

The Nova Scotia rate dropped from 15% to 14% on April 1, 2025 — the first GST/HST rate change anywhere in Canada since 2016. If your accounting software hasn't been updated, that's the first place to check.

What rate do you charge — yours or your customer's?

This is the question that trips up almost every small business doing work outside their home province. The short answer: charge based on where the customer is, not where you are. Tax law calls this the "place of supply" rule.

The rules differ slightly for goods and services:

Tangible goods: charge the rate of the province where the goods are delivered.
Services: generally, charge the rate of the province where the customer is located (more specifically, the customer's "usual place of business" or the address on file).
Real property / construction work: charge the rate of the province where the property is located.

A practical example: you're a contractor in Calgary (Alberta) doing a job in Kelowna (BC). You charge BC rates — 5% GST + 7% PST. Even though you're an Alberta business, the work is in BC.

The small-supplier exemption

You don't actually have to register for or collect GST/HST unless your worldwide taxable revenue exceeds $30,000 CAD over any four consecutive calendar quarters. This is the "small supplier" rule.

Under $30K/year, registration is optional. Once you cross the threshold, you have 30 days to register. Some businesses choose to register voluntarily even under the threshold — this lets them claim back the GST/HST they pay on business expenses (called an "Input Tax Credit," or ITC).

Important: the $30K threshold is for GST/HST only. PST (in BC, SK, MB) and QST have separate rules and thresholds. Quebec has its own small-supplier rule for QST, also at $30,000. BC and Saskatchewan have lower thresholds for some types of business — check with the provincial ministry if you're close.

How to show tax on your invoice

The CRA has specific requirements depending on the invoice total. For invoices of $30 or less, the requirements are minimal. For invoices between $30 and $150, you need more details. For $150 or more, full disclosure is required.

In practice, just put everything on every invoice — it's not extra work, and it covers you regardless of the amount. Show:

Your business name and address
Your GST/HST registration number (and QST number, if applicable)
Invoice date
Customer name and address
Itemized list of goods or services
Subtotal (before tax)
Each tax on its own line: "GST 5%", "PST 7%", "HST 13%", or "QST 9.975%"
Grand total in CAD

Never combine taxes into one line like "Tax (12%)". A business customer claiming an Input Tax Credit needs to see GST and PST separately to know how much is refundable to them.

Tax-exempt vs zero-rated vs taxable

Three categories matter:

Taxable: most goods and services. You charge GST/HST and remit it.
Zero-rated: taxable at 0%. You don't charge GST/HST, but you can still claim Input Tax Credits on your business expenses. Examples: basic groceries, exports, prescription drugs.
Exempt: not subject to GST/HST. You don't charge and you cannot claim ITCs. Examples: most health and dental services, residential rent, most financial services, certain educational services.

The difference between zero-rated and exempt is subtle but financially significant. If you're in an exempt industry, you'll pay GST/HST on your supplies and can't claim it back. If you're zero-rated, you get the ITC back.

2026 changes to watch

Two changes specifically affect Canadian software and service businesses in 2026:

Manitoba PST on cloud computing (effective January 1, 2026): Manitoba RST now applies to Software-as-a-Service, Platform-as-a-Service, and Infrastructure-as-a-Service. If you sell SaaS to Manitoba customers, you may need to register and collect 7% RST in addition to GST.
BC PST expansion (proposed effective October 1, 2026): BC's 2026 budget proposed expanding PST to certain professional services including accounting, architectural services (at 30% of purchase price), engineering and geoscience services (at 30% of purchase price), non-residential real estate services, and security services. If you're in one of these categories selling to BC customers, watch for the final regulations.

Common mistakes that trigger audits

Charging your local rate when you should charge the customer's. A Calgary contractor charging 5% on a $40K reno in Ontario is under-collecting by $3,200. CRA will eventually notice.
Not registering when you should. Crossing the $30K threshold and continuing to invoice without GST/HST means you'll owe the tax retroactively — out of your own pocket.
Combining taxes into one line. Two-tax provinces (BC, SK, MB, QC) require GST and PST/QST shown separately.
Forgetting QST is administered separately. Quebec runs its own tax system through Revenu Québec — you register and file QST returns separately from GST/HST.
Mixing up zero-rated and exempt. Listing an exempt service as "GST 0%" instead of leaving GST off entirely can cause downstream issues with input tax credits.

A practical workflow

If you're a small Canadian business doing work in your home province only, the process is straightforward:

Decide if you'll register voluntarily even under $30K, or wait until you cross the threshold.
Register for GST/HST with CRA (and QST with Revenu Québec if you're in or selling into Quebec).
Put your registration number on every invoice.
Charge the right rate for your province on every taxable line.
Show each tax on its own line, with the rate explicit.
File your GST/HST return (quarterly or annually depending on volume).
Claim Input Tax Credits for the GST/HST you paid on business expenses.

If you're selling across provinces, the only added complexity is tracking the customer's location and applying their rate instead of yours.

How Electrified Estimates & Invoices handles this

Tax handling for all 13 provinces and territories — including the two-tax provinces and the Nova Scotia 14% update — is built in. Set your business location once, tag each customer's province, and the right tax appears on every invoice automatically with the correct breakdown.

$5 CAD per month plus applicable taxes — start now.

Sources: Canada Revenue Agency (canada.ca), Revenu Québec, Government of Nova Scotia HST rate change announcement (novascotia.ca), Manitoba and BC 2026 budget documents. Rates verified May 2026. Verify with the CRA or your accountant before relying on these figures for tax filings.