Canada's system of indirect taxation is unique among industrialized countries in that there are two levels of government, federal and provincial, that impose a general sales tax on the same transactions. The federal government levies the Goods and Services Tax, or GST, which is a 5% value-added tax on virtually all goods and services sold in Canada.
Most provinces levy their own separate retail sales taxes on sales of goods, and a limited number of services, to users or consumers. On the other hand, Quebec has repealed its retail sales tax in favor of a multi-stage tax modeled after the GST.
New Brunswick, Nova Scotia and Newfoundland have replaced their respective retail sales taxes with a federal tax that is collected as an additional component of the GST. This 13% combined tax is known as the Harmonized Sales Tax, or HST. Alberta and Canada's three territories do not have a separate sales tax system.
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