Taxation in Canada

Knowing how the taxation system works, both across Canada and in the various provinces and territories, is an important part of settling in Canada successfully.

Because Canada is a federation, taxation in Canada is a shared responsibility between the federal government and the various provincial and territorial governments. Canadian provinces and territories have the facility to levy taxes on income, consumption and wealth, as does the federal government.

Federal taxes are collected by the Canada Revenue Agency (CRA). Under tax collection agreements, the CRA collects and remits to the provinces:

  • provincial personal income taxes on behalf of all provinces except Quebec, through a system of unified tax returns;
  • corporate taxes on behalf of all provinces except Quebec and Alberta; and
  • that portion of the Harmonized Sales Tax (HST) that is in excess of the federal Goods and Services Tax (GST) rate, with respect to the provinces that have implemented it.

The Agence du Revenu du Québec collects the GST in Quebec on behalf of the federal government, and remits it to the federal government.