What Is GST and HST: Rates & Rules Explained
When Amara opened her small home-bakery in Brampton, she priced her cakes carefully — ingredients, hours, a modest profit. Business boomed. Then, near the end of her first busy year, a customer asked a simple question: “Do you charge HST?” Amara froze. She hadn’t been charging it. She wasn’t even sure she was supposed to. A quick call to an accountant confirmed her fear: she’d crossed the sales threshold months ago and now owed tax she’d never collected.
Amara’s story is more common than you’d think. GST and HST sound intimidating, but the rules are learnable — and getting them right early saves a lot of pain. Here’s a clear, plain-English breakdown of what these taxes are, the current rates, and the rules every Canadian business owner should know.
GST vs. HST: What’s the Difference?
GST (Goods and Services Tax) is the federal 5% tax that applies to most goods and services across all of Canada. It has stayed at 5% since 2008. HST (Harmonized Sales Tax) is what you get when a province blends its own provincial sales tax with that federal 5% into a single combined rate. So in Ontario, the 13% HST is really the 5% federal GST plus an 8% provincial portion, collected together and remitted to the CRA.
The key idea: everyone pays 5% GST somewhere in the mix. HST provinces just bundle it with their provincial share so businesses collect one tax instead of two.
GST/HST Rates by Province (2026)
Rates depend on where your customer is located — the “place of supply” — not where your business sits. Here are the current combined rates:
| Province / Territory | Tax Type | Total Rate |
|---|---|---|
| Ontario | HST | 13% |
| Alberta, NWT, Nunavut, Yukon | GST only | 5% |
| British Columbia | GST + PST | 12% |
| Manitoba | GST + RST | 12% |
| Saskatchewan | GST + PST | 11% |
| Quebec | GST + QST | 14.975% |
| Nova Scotia | HST | 14% |
| New Brunswick, NL, PEI | HST | 15% |
Note: Nova Scotia lowered its HST from 15% to 14% on April 1, 2025. Quebec’s QST and the PST provinces (BC, Manitoba, Saskatchewan) are administered separately from the federal GST.
Who Has to Register and Charge It?
This is the rule that caught Amara. You must register for a GST/HST account once your business earns more than $30,000 in taxable revenue over four consecutive calendar quarters (a rolling 12-month window), or in a single quarter. Below that, you’re a “small supplier” and registration is optional — though many register voluntarily to reclaim the tax they pay on business expenses.
Once registered, you charge the correct rate on your sales, collect it from customers, and file returns with the CRA — monthly, quarterly, or annually depending on your revenue. Accurate bookkeeping is what makes this manageable: every dollar of HST you collect and every dollar you pay on expenses needs to be tracked cleanly, or filing season becomes a scramble.
The Part Most Owners Overlook: Input Tax Credits
Here’s the silver lining. When you’re registered, you don’t just hand over everything you collect. You can claim Input Tax Credits (ITCs) — the GST/HST you paid on legitimate business purchases like supplies, equipment, and software. You remit the difference between what you collected and what you paid. For many small businesses, ITCs meaningfully reduce the final bill, which is exactly why voluntary registration can pay off even below the $30,000 line.
When to Bring in a Professional
Amara’s story ended well — once she had proper guidance, she registered, cleaned up her records, and now charges and files HST without a second thought. The stress vanished the moment someone who knew the rules took over.
That’s the value of working with one of the best CPA firms in Brampton. Whether you’re a sole proprietor unsure if you’ve hit the threshold or a growing company juggling HST across provinces, a CPA makes sure you register at the right time, charge the right rate, claim every ITC, and file on schedule. If you run an unincorporated business, our business tax return service folds your HST obligations into your overall filing so nothing slips through the cracks.
The Bottom Line
GST is the flat 5% federal tax; HST is that 5% harmonized with a province’s own tax into one rate — 13% in Ontario. Register once you pass $30,000, charge based on your customer’s province, claim your Input Tax Credits, and file on time. Understand those basics and GST/HST stops being scary. And if you’d rather not think about it at all, that’s exactly what a trusted accountant is for.
About the Author
Vaishali Bajwa, CPA, CGA is the founder of Bajwa CPA Professional Corporation in Brampton, Ontario. With over a decade of public-practice experience helping businesses and individuals across the Greater Toronto Area, she and her team specialize in tax compliance, HST filing, and keeping small businesses on the right side of the CRA.
Frequently Asked Questions
What is the GST rate in Canada in 2026?
The federal GST rate is 5% and has been unchanged since 2008. It applies to most goods and services across the entire country.
What is the HST rate in Ontario?
Ontario’s HST is 13% — made up of the 5% federal GST plus an 8% provincial portion, collected together as a single tax by the CRA.
When do I have to register for GST/HST?
You must register once your taxable revenue exceeds $30,000 over four consecutive calendar quarters (or in a single quarter). Below that you’re a small supplier and registration is optional, though often worthwhile to claim Input Tax Credits.
What are Input Tax Credits (ITCs)?
ITCs let registered businesses recover the GST/HST they paid on eligible business expenses. You remit only the difference between the tax you collected and the tax you paid, which lowers your overall bill.
Which rate do I charge if my customer is in another province?
You charge based on the “place of supply” — generally your customer’s province, not yours. For example, a sale to an Ontario customer is charged at 13% HST. A CPA can help you apply the right rate across provinces.
Unsure about your GST/HST obligations? The team at Bajwa CPA Professional Corporation in Brampton can handle registration, filing, and everything in between. Contact us today.
