GST vs HST vs PST: Which Tax Does Your Corporation Charge? (2026 Rates)
The Three Sales Taxes in Canada
Canada does not have a single national sales tax. Instead, businesses deal with up to three overlapping systems: GST (federal), PST (provincial), and HST (a combined federal-provincial tax). Which one your corporation charges depends on where the supply is made and the province involved.
Getting this wrong means either overcharging customers or owing money to the CRA out of pocket.
2026 Province-by-Province Rates
| Province / Territory | Tax Type | GST | PST / QST | Combined Rate |
|---|---|---|---|---|
| Alberta | GST only | 5% | - | 5% |
| British Columbia | GST + PST | 5% | 7% | 12% |
| Manitoba | GST + PST | 5% | 7% | 12% |
| New Brunswick | HST | - | - | 15% |
| Newfoundland & Labrador | HST | - | - | 15% |
| Northwest Territories | GST only | 5% | - | 5% |
| Nova Scotia | HST | - | - | 14% |
| Nunavut | GST only | 5% | - | 5% |
| Ontario | HST | - | - | 13% |
| Prince Edward Island | HST | - | - | 15% |
| Quebec | GST + QST | 5% | 9.975% | 14.975% |
| Saskatchewan | GST + PST | 5% | 6% | 11% |
| Yukon | GST only | 5% | - | 5% |
HST provinces combine GST and provincial tax into a single remittance to the CRA. In GST + PST provinces, you file GST federally and PST separately with the province.
When You Must Register for GST/HST
Your corporation must register for a GST/HST account once it earns more than $30,000 in worldwide taxable revenue over any single calendar quarter or over four consecutive calendar quarters.
Key points to remember:
- The $30,000 threshold applies to revenue, not profit
- Once you cross the threshold, you must register within 29 days
- You can voluntarily register before hitting $30,000 to claim input tax credits (ITCs)
- A brand-new corporation with no revenue history can still register voluntarily on day one
Most IT contractors and consultants cross the $30,000 threshold quickly. Voluntary registration from day one is almost always the right move because it lets you claim ITCs on startup expenses.
Charging the Right Rate: Place of Supply Rules
The tax rate you charge is based on where the supply is considered to be made, not where your corporation is located.
Services
For most services, the place of supply is determined by the customer's business address. If you are a BC-based consultant billing an Ontario client, you charge 13% HST (Ontario's rate), not BC's 5% GST + 7% PST.
Physical Goods
For tangible goods, the place of supply is generally where the goods are delivered. Ship a product from Alberta to Nova Scotia and you charge 14% HST.
Digital Products and SaaS
Digital products and software subscriptions follow the customer address rule. The CRA treats SaaS as a service, so the rate is based on the customer's province.
If you sell digital services to consumers outside Canada, different rules apply. Non-resident digital suppliers may need to register under the simplified GST/HST framework if they exceed $30,000 in Canadian sales.
Common Edge Cases
Out-of-Province Clients
If your corporation is in BC but most of your clients are in Ontario, you charge Ontario HST (13%) on those invoices. You still file your own GST return federally. You do not need to register separately for Ontario HST.
Zero-Rated and Exempt Supplies
Some supplies are taxed at 0% (zero-rated) or completely exempt:
- Zero-rated: basic groceries, prescription drugs, medical devices, exports
- Exempt: financial services, residential rent, most health and dental services
Zero-rated supplies still let you claim ITCs. Exempt supplies do not.
Mixed Supplies to Multiple Provinces
If a single contract serves clients across multiple provinces, you may need to split the invoice and apply different rates to each portion. This is common for national consulting engagements.
Filing and Remittance
How often you file depends on your annual revenue:
| Annual Revenue | Filing Frequency |
|---|---|
| Up to $1.5M | Annual |
| $1.5M to $6M | Quarterly |
| Over $6M | Monthly |
Most one-person corporations file annually, but you can elect to file quarterly if you prefer more frequent ITC refunds.
How ledg Helps
Tracking which rate to charge for each client province and reconciling ITCs across multiple jurisdictions is exactly the kind of repetitive work that leads to errors. ledg automatically applies the correct tax rate based on your client's province and generates CRA-ready summaries at filing time.
This article is for informational purposes only and does not constitute tax advice. Consult a qualified accountant for your specific situation.
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