In Canada the goods and services tax or GST is a federal tax of five percent on most goods and services sold in Canada for domestic consumption. Some goods and services are exempt from the GST, for example basic groceries, prescription drugs and exports.
In the provinces of Nova Scotia, New Brunswick, Newfoundland and Labrador, Ontario and British Columbia, the harmonized sales tax (HST) replaces both the federal GST and the provincial sales tax and is applied on the same basis as the GST.
Note: On April 1, 2013, the province of British Columbia is dropping the HST and going back to the two-tax system of GST and provincial sales tax. On the same day, the province of Prince Edward Island is adopting the HST.