Does your business have clients or customers in Atlantic Canada? Whether you ship goods or provide services to them, you may need to know about upcoming Harmonized Sales Tax (HST) rate changes.
The HST is part of the GST system and is fully integrated as part of the Goods and Services Tax which applies across Canada. In the non-HST provinces and the territories, the GST is 5 %. In the HST provinces, the tax rate is higher although the federal portion of the HST is the same 5 %.
In most cases, the applicable GST/HST rate depends on the location of the customer. There are some exceptions, but in general, goods shipped to an HST province must bear tax at that province’s HST rate, and services provided to a customer in an HST province must bear tax at that province’s HST rate — even if the supplier is in a non-HST province.
(Quebec is a special case. It has the Quebec Sales Tax which is “semi-harmonized” with the GST/HST in that it follows the same rules, but it is not integrated into the GST/HST system. So if you do not carry on business in Quebec, you need not register for QST and charge QST on sales you make to Quebec customers. You charge only the 5 % GST.)
From April 2013 through June 2016, the HST provinces and rates are:
- Ontario — 13 %
- New Brunswick — 13 %
- Nova Scotia — 15 %
- Prince Edward Island — 14 %
- Newfoundland and Labrador — 13 %
- (British Columbia was an HST province but withdrew in April 2013.)
Starting July 2016, both New Brunswick and Newfoundland & Labrador are raising their HST rate to 15 %. (Technically the change will be made by federal regulations, passed by the federal Cabinet and published in the Canada Gazette before July 1.)
Starting October 2016, Prince Edward Island is similarly raising its HST rate to 15 %.
Thus, as of October, all the Atlantic provinces will be at 15 %. Only Ontario will have a different HST rate, at 13 %.
Both New Brunswick and Newfoundland and Labrador have published transitional rules to explain the timing of the change. The regulations to implement these rules have not yet been released at time of writing. They will likely not be available to the public until they are published in the Canada Gazette shortly before July 1. However, you can find the details of the transitional rules at:
In very general terms, if amounts are billed or paid before July 1, then the old (13 %) rate applies.
At time of writing, PEI had not yet released its transitional rules, but they are expected to be essentially the same except for the later date.