Tax in Canada: GST, income tax, company tax, capital gains

GST/HST in Canada

Federal GST plus province-specific HST/PST/QST; registrants claim input tax credits on the federal portion.

Standard rate

5%

Local name

GST/HST — Goods and Services Tax

Type

GST

Reduced rates

None on record

Registration threshold

CAD 30,000 turnover/yr

Filing

Annual, quarterly or monthly

Authority

Canada Revenue Agency

Current rate since

1 January 2008

Company tax in Canada

The headline corporate income tax rate is 15%, with 9% for qualifying smaller companies. In effect since 1 January 2019.

Federal general rate 15%; small-business rate 9% (CCPC, first $500k). Provincial/territorial corporate tax is additional and varies.

Canada company tax calculator →

Did you know? Canada tax facts

• To pass the GST, Mulroney used a 'deadlock' clause to pack the Senate with eight extra senators appointed by the Queen — the only time in Canadian history Section 26 of the Constitution has ever been used.

  In September 1990 the Liberal-dominated Senate was blocking the tax, so Mulroney invoked Section 26 of the Constitution Act, 1867 to temporarily expand the Senate by eight seats, giving his Progressive Conservatives their first Senate majority in nearly 50 years. The provision had been available since Confederation but Mulroney was the first PM to use it.

  Source: Library of Parliament — The Senate: appointments under Section 26 of the Constitution Act, 1867 ↗

• In Canada the same doughnut can be taxed or tax-free depending only on how many you buy: fewer than six is taxable, six or more is zero-rated.

  CRA's Basic Groceries memorandum treats cakes, muffins, pies, pastries, doughnuts, cookies and similar single-serving sweetened baked goods as taxable when sold in quantities of fewer than six, but as zero-rated basic groceries at six or more — even a mix of six different items (e.g. two bagels, two muffins, two doughnuts) counts as six and is zero-rated.

  Source: Canada Revenue Agency — Basic Groceries (GST/HST Memorandum 4-3) ↗

• British Columbians literally voted their consumption tax out of existence — a 2011 referendum scrapped the year-old HST, sending the province back to separate PST + GST.

  After Bill Vander Zalm gathered more than 700,000 signatures, 54.73% of voters chose in the August 2011 referendum to 'extinguish' BC's HST (adopted July 1, 2010), forcing the province back to PST (7%) plus GST (5%) on April 1, 2013.

  Source: CBC News — B.C. votes 55% to scrap HST ↗

• Canada's GST is one of the rare national VATs that has gone DOWN, not up — cut from 7% to 6% in 2006 and to 5% in 2008.

  The Harper government reduced the federal GST by a point on July 1, 2006 and another point effective January 1, 2008, where it has stayed since.

  Source: Wikipedia — Goods and services tax (Canada) ↗

• Canada charged GST on tampons for 24 years before scrapping the 'tampon tax' in 2015 after a decade-long campaign.

  NDP MP Judy Wasylycia-Leis first tried to zero-rate menstrual products in 2004; Ottawa finally removed GST/HST on tampons, pads and menstrual cups effective July 1, 2015, at an estimated cost of about $36 million a year.

  Source: CBC News — Federal government lifts GST on feminine hygiene products as of July 1 ↗

• Canada's income tax began as the Income War Tax Act of 1917, introduced by finance minister Sir Thomas White to fund the First World War — after the war Ottawa could not give up the revenue, and the tax never left.

  Wikipedia: White's 'Income War Tax Act' bill 'went into Committee of the Whole on July 25, 1917 but faced resistance'; after the war the federal government could not do without the revenue. Today the federal brackets run from 14% (cut from 15% on 1 July 2025) to 33% above $258,482 (2026), with a basic personal amount of $16,452.

  Source: Wikipedia — Income taxes in Canada · checked 10 October 2026 ↗

• RRSPs date from 1957: Canadians can contribute 18% of the previous year's earned income up to an annual cap, have until the 60th day after year-end to do it, and must wind the plan up by the end of the year they turn 71.

  Wikipedia: RRSPs 'were introduced in 1957 to promote savings by employees and self-employed people'; 'Since 1991, contribution limits are calculated at 18% of the prior year's reported earned income', up to a maximum ($31,560 for 2024); contributions can be made 'up until and including the 60th day following December 31 of the tax year'; 'Before the end of the year the account holder turns 71, the RRSP must either be cashed out' or converted.

  Source: Wikipedia — Registered retirement savings plan · checked 10 October 2026 ↗

• The Tax-Free Savings Account, announced in Jim Flaherty's 2008 budget, opened on 1 January 2009 with $5,000 of room a year; by 1 January 2026 anyone 18 or over throughout had $109,000 of cumulative room.

  Wikipedia: 'It came into effect on January 1, 2009'; the cap was $5,000 a year before 2013, $10,000 for 2015 only before reverting to $5,500, and $7,000 a year for 2024–2026; 'Contributions to a TFSA are not deductible for income tax purposes', but investment income 'is generally not taxed, even when withdrawn'.

  Source: Wikipedia — Tax-free savings account · checked 10 October 2026 ↗

• Canada first taxed capital gains under the 1971 budget of Pierre Trudeau and Edgar Benson — the same reform that killed the federal estate tax; half of a realised gain is taxable, and a primary residence is exempt.

  Wikipedia: 'A Capital gains tax was first introduced in Canada by Pierre Trudeau and his finance minister Edgar Benson in the 1971 Canadian federal budget'; 'For corporations as for individuals, 50% of realized capital gains are taxable'; 'Primary residences are exempt from capital gains'; the federal estate tax was repealed at the end of 1971.

  Source: Wikipedia — Taxation in Canada · checked 10 October 2026 ↗

More stories, for every country that has one, on the tax facts page.