Ontario Sales Tax

Table of Contents

Subscribe for News, Deals & Exclusive Offers

Sign up to get the inside scoop on today’s biggest stories in finance — delivered weekly.

The Harmonized Sales Tax (HST) in Ontario is 13%.

The Harmonized Sales Tax (HST) is applied to most goods and services in Ontario, although there are certain categories that are exempt or eligible for rebates. These exceptions help reduce the overall tax burden on specific items.

What is the HST?

Ontario implemented the HST on July 1st, 2010. The HST combines two taxes: an 8% provincial sales tax and a 5% federal sales tax. These replaced the former 8% Retail Sales Tax (RST) and 5% Goods and Services Tax (GST).

Ontario HST Rebates and Exemptions

Most rebates and exemptions that apply to the federal portion of the HST (5%) also apply to the provincial portion (8%). Additionally, there are specific categories where only the provincial portion is not charged. These include items like print newspapers, books (including audiobooks), children’s clothing, footwear, car seats, booster seats, and diapers.

Ontario First Nations and the HST

Registered First Nations in Ontario receive a rebate on the 8% provincial portion of the HST for various purchases, including adult clothing, household goods, vehicles, and over-the-counter medications. This rebate applies even for purchases made off-reserve. For more details, you can refer to Ontario’s First Nation rebate information.

Retail Sales Tax (RST) Exceptions

While the HST covers most goods and services, some items are still subject to the Retail Sales Tax (RST) instead of the HST. These include used vehicle sales, boats, aircraft, and insurance. Unlike the HST, all RST revenue goes directly to the Ontario government.

Special Sales Tax for Used Vehicles

When you purchase a used vehicle in Ontario, a 13% RST is applied when you register the vehicle. This tax is separate from the HST, and the value is determined by either the purchase price or the vehicle’s wholesale value (Red Book), whichever is greater. This tax applies even if the vehicle was previously taxed with HST.

HST on New Vehicle Purchases

For new vehicles, the 13% HST is applied at the point-of-sale by the dealer or manufacturer. The same tax applies to new boats and aircraft purchased in Ontario.

Federal HST Rebates and Exemptions

Some goods and services are exempt from the federal portion of the HST or are zero-rated, meaning they are taxed at 0%. These include basic groceries like meat, dairy, eggs, and vegetables, as well as prescription drugs, medical devices, and feminine hygiene products. Additionally, services like resale of residential property, long-term rentals, education, medical and dental services, financial services, legal aid, and daycare are exempt from the federal portion of the HST.

Ontario’s Sales Tax Revenue

Sales taxes, including HST and RST, are a significant source of revenue for Ontario. In the 2023 fiscal year, Ontario expects to collect $35.35 billion from sales taxes, which accounts for 24.5% of the province’s total taxation revenue. To help with the cost of sales tax, the Ontario Sales Tax Credit offers up to $345 per person, paid annually or monthly.

Federal Sales Tax Revenue

On a national level, sales taxes also contribute to Canada’s fiscal budget. The 5% GST generated $54.4 billion in revenue in the 2023 fiscal year, making up 11.9% of the federal government’s total revenue.

Canadian Mortgage Arrears Surge as Homeowners Feel the Financial Squeeze

Canadian Mortgage Arrears Surge as Homeowners Feel the Financial Squeeze

Canadian homeowners are feeling the pressure as more people struggle to keep up with their mortgage payments. The latest data…
Trump’s Critique of Canadian Banking: The Question of Barriers to Entry

Trump’s Critique of Canadian Banking: The Question of Barriers to Entry

In recent years, former U.S. President Donald Trump has criticized the Canadian banking sector for maintaining what he describes as…
President Donald Trump Imposes 25% Tariffs on Steel and Aluminum

President Donald Trump Imposes 25% Tariffs on Steel and Aluminum

President Donald Trump announced on Monday that he will apply a 25% tariff on every steel and aluminum import coming…
Trump to Impose New Tariffs on Aluminum and Steel Imports

Trump to Impose New Tariffs on Aluminum and Steel Imports

President Trump announced Sunday that he will implement 25% tariffs on all steel and aluminum imports starting Monday. The president…
Understanding Canada’s Interprovincial Trade Barriers

Understanding Canada’s Interprovincial Trade Barriers

Interprovincial trade barriers in Canada refer to restrictions and regulations that prevent the free flow of goods, services, and labor…
Canadian alternatives to American products - Here is a list of brands

Canadian alternatives to American products - Here is a list of brands

Canada’s Response to U.S. Tariffs: Provincial and Federal Measures Explained U.S. President Donald Trump has initiated a trade war by…
Trump to Impose 25% Tariffs on Canada and Mexico Starting February 1

Trump to Impose 25% Tariffs on Canada and Mexico Starting February 1

President Donald Trump has confirmed that he will proceed with his plan to impose 25% tariffs on imports from Canada…
Bank of Canada Lowers Interest Rates Amid U.S. Tariff Uncertainty

Bank of Canada Lowers Interest Rates Amid U.S. Tariff Uncertainty

The Bank of Canada has cut interest rates to 3% amid rising U.S. tariff concerns. Governor Tiff Macklem warns monetary…
Bank of Canada Interest Rate Projections for January 2025: What You Need to Know

Bank of Canada Interest Rate Projections for January 2025: What You Need to Know

Stay informed about the Bank of Canada's interest rate projections for January 2025. Learn how inflation, global trends, and economic…
Canada's Economic Crisis: A Practical Solution for Affordable Housing and Business Growth

Canada's Economic Crisis: A Practical Solution for Affordable Housing and Business Growth

The Bank of Canada (BoC) raised interest rates to control inflation and curb rising real estate prices, aiming to make…
Mortgage Rate Prediction for Canada in 2025: What You Can Expect

Mortgage Rate Prediction for Canada in 2025: What You Can Expect

Canada's mortgage rates in 2025 are expected to remain stable, with a 70% chance of a 25bps rate cut by…
How Do I Trade in Options in Canada? A Beginner's Guide

How Do I Trade in Options in Canada? A Beginner's Guide

If you’ve ever wondered about options trading, you’re not alone! This guide will explain options trading in a way that’s…
Ratesheet.ca
Logo