Updated on 29 July 2026

In Canada, most goods and services supplied or imported into the country are subject to GST/HST. The applicable tax rate generally depends on the type of supply and where the supply is made. In participating provinces, the federal GST is combined with a provincial component to form the HST (Harmonized Sales Tax).

There are currently five provinces participating in the HST: Ontario, Nova Scotia, Newfoundland and Labrador, Prince Edward Island, and New Brunswick. In 2026, the HST rate is 13% in Ontario, 14% in Nova Scotia, and 15% in New Brunswick, Newfoundland and Labrador, and Prince Edward Island.

Ontario began participating in the HST in 2010. The current Ontario HST rate is 13%, consisting of a 5% federal component and an 8% provincial component.

While most products and services in Ontario are subject to HST, some supplies are exempt or taxable at a rate of 0%. The CRA (Canada Revenue Agency) generally categorizes supplies into three groups:

1. Taxable;
2. Zero-rated;
3. Exempt.

Taxable supplies other than zero-rated supplies made in Ontario are generally subject to 13% HST, and GST/HST registrants may be eligible to claim ITCs (Input Tax Credits) for GST/HST paid or payable on purchases and expenses related to their commercial activities. Zero-rated supplies are taxable at 0%, while exempt supplies are not subject to GST/HST.

But which items are HST-exempt in Ontario? How can you be sure you’re charging and paying the right HST on certain goods and services?

What’s New in 2026?

The HST rate in Nova Scotia remains 14% in 2026 following the reduction from 15% to 14% that took effect on April 1, 2025. Ontario also updated the First Nations HST rebate application process in June 2026. Individual applicants generally no longer need to submit receipts for purchases where the Ontario portion of HST is $5 or less, and supporting identification is generally required only for a first application or when a status card has expired. Ontario also introduced an updated application and Receipt Listing form.

Who Pays HST in 2026?

HST is generally paid by the customer on taxable goods and services at the point of purchase. GST/HST registrants collect the applicable tax and remit it to the Canada Revenue Agency (CRA) when filing their GST/HST returns.

For most businesses, if your total worldwide taxable supplies, including zero-rated supplies, exceed $30,000 in a single calendar quarter or over four consecutive calendar quarters, you generally must register for a GST/HST account. The effective date of registration and when you must begin charging GST/HST depend on how and when you exceed the $30,000 small supplier threshold.

If you exceed $30,000 in a single calendar quarter, you generally stop being a small supplier on the supply that causes you to exceed the threshold and must begin charging GST/HST on that supply. If you exceed $30,000 over four consecutive calendar quarters but not in a single quarter, you generally remain a small supplier until the end of the month following the quarter in which you exceed the threshold and begin charging GST/HST after that point.

If you remain below the applicable threshold, you are generally considered a small supplier and are not required to register for, collect, or remit GST/HST. However, some businesses, such as taxi operators and commercial ride-sharing drivers, are required to register regardless of the small supplier threshold.

Some business owners below the threshold may voluntarily register for a GST/HST account. This may be particularly useful for businesses selling zero-rated goods or services because registered businesses may generally claim eligible Input Tax Credits (ITCs) for GST/HST paid or payable on purchases and expenses related to their commercial activities.

When you are registered for GST/HST, you may generally claim eligible ITCs when filing your GST/HST return. ITCs allow you to recover GST/HST paid or payable on purchases and operating expenses related to your commercial activities, reducing the net tax you must remit.

What Does HST-Exempt Mean?

HST-exempt means that GST/HST does not apply to the goods or services provided. The business does not charge or collect GST/HST on exempt supplies and therefore does not remit GST/HST from those supplies.

Importantly, businesses generally cannot claim Input Tax Credits (ITCs) to recover GST/HST paid or payable on purchases and expenses used to make exempt supplies. This differs from zero-rated supplies, where GST/HST is charged at 0% but eligible registrants may generally still claim ITCs.

There are a number of GST/HST-exempt goods and services in Ontario. If your business exclusively supplies exempt goods and services, generally, you cannot register for a GST/HST account. One exception applies to listed financial institutions resident in Canada.

HST-Exempt Goods and Services in Ontario

The CRA designates which goods and services are exempt from GST/HST in Ontario. HST-exempt services and items include, but are not limited to:

1. A sale of housing that was last used by an individual as a place of residence;
2. Long-term rentals of residential accommodation (of one month or more);
3. Residential condominium fees;
4. Most health, medical, and dental services performed by licensed physicians, dentists, nurses, and certain other healthcare practitioners for medical reasons;
5. Child care services where the primary purpose is to provide care and supervision to children 14 years of age or under for periods of less than 24 hours per day;
6. Most domestic ferry services;
7. Legal aid services;
8. Many educational services such as:
   • courses supplied by vocational schools that lead to certificates, diplomas, licences, or similar qualifications that certify an individual's ability to practise or perform a trade or vocation;
   • tutoring services provided to an individual in a course that is approved for credit by, or follows a curriculum designated by, a school authority;
9. Music lessons;
10. Most services provided by financial institutions, such as lending money or operating deposit accounts;
11. The issuance of insurance policies by insurers and the arranging for the issuance of insurance policies by insurance agents;
12. Most property and services provided by charities and public institutions;
13. Certain property and services provided by governments, non-profit organizations, municipalities, and other public service bodies, including municipal transit services and standard residential services such as water distribution.

For these exempt supplies, GST/HST is not charged or collected. Businesses generally cannot claim Input Tax Credits (ITCs) for GST/HST paid or payable on purchases and expenses used to make exempt supplies.

For more information, see the CRA’s Type of Supply guidance.

What Does HST Zero-Rated Mean?

HST zero-rated refers to goods and services that are taxable at a GST/HST rate of 0%. Zero-rated supplies are different from exempt supplies. You do not charge GST/HST on zero-rated supplies, and the customer does not pay GST/HST on them.

The key difference for a business owner is that GST/HST registrants may generally claim Input Tax Credits (ITCs) for GST/HST paid or payable on purchases and expenses used to make zero-rated supplies. This is why some small suppliers that primarily make zero-rated supplies may choose to voluntarily register for a GST/HST account and claim eligible ITCs.

There are many zero-rated supplies in Ontario. These include:

1. Basic groceries such as milk, bread, and vegetables;
2. Certain agricultural products, including certain grains and raw wool;
3. Most farm livestock;
4. Certain farm equipment and machinery;
5. Certain fishery products, including fish for human consumption;
6. Certain prescription drugs and drug-dispensing services;
7. Certain medical devices, such as hearing aids, artificial teeth, wheelchairs, and mobility scooters;
8. Feminine hygiene products;
9. Certain exported goods and services;
10. Certain international transportation services.

HST Point-of-Sale Rebates

In Ontario, certain goods are eligible for a point-of-sale rebate of the 8% provincial portion of the 13% HST. As a result, eligible purchasers generally pay only the 5% federal portion of the HST on qualifying items.

The HST point-of-sale rebate is generally credited by the supplier at the time of purchase, so the purchaser does not pay the 8% provincial portion. The CRA administers these rebates on behalf of the Government of Ontario.

The following goods are eligible for Ontario's point-of-sale rebate, subject to applicable conditions:

HST Exemption Forms

In most cases, you do not need a separate HST exemption form for exempt or zero-rated supplies. When filing a GST/HST return electronically and choosing to complete the detailed revenue lines, taxable sales made in Canada, including zero-rated supplies other than zero-rated exports, are reported on line 90. Exempt supplies, zero-rated exports, and certain other sales and revenue are reported on line 91.

In the case of a business acquisition, the purchaser and seller may be able to jointly elect to have no GST/HST payable on the sale of a business or part of a business if the applicable requirements are met. This election is made using Form GST44, GST/HST Election Concerning the Acquisition of a Business or Part of a Business. Generally, the purchaser must acquire all or substantially all (at least 90%) of the property necessary to carry on the business.

For Ontario point-of-sale rebates, the CRA provides several information sheets explaining the rules for qualifying goods:

1. GI-060, Harmonized Sales Tax for Ontario – Point-of-Sale Rebate on Newspapers;
2. GI-063, Point-of-Sale Rebate on Children's Goods;
3. GI-064, Harmonized Sales Tax for Ontario – Point-of-Sale Rebate on Prepared Food and Beverages;
4. GI-065, Point-of-Sale Rebate on Books.

If an eligible purchaser paid the provincial portion of the HST because the supplier did not credit the applicable point-of-sale rebate, the purchaser may generally apply to the CRA using Form GST189, General Application for GST/HST Rebates, with Reason Code 16 for qualifying provincial point-of-sale rebates.

First Nations HST Exemption in Ontario

Eligible First Nations individuals, bands, and band councils of an Ontario First Nations reserve may claim a rebate of the 8% provincial portion of the HST paid on qualifying goods and services purchased off-reserve. Qualifying purchases must generally be for the exclusive personal use of the eligible First Nations individual, band, or band council.

To be eligible for the rebate, a First Nations individual must be a resident of Ontario or a resident of Canada living on the Akwesasne reserve. They must also have either a federal government-issued Certificate of Indian Status card or a Temporary Confirmation of Registration Document. Bands and band councils of an Ontario First Nations reserve, including the Akwesasne reserve, may also qualify. When using a Temporary Confirmation of Registration Document for a point-of-sale rebate, the purchaser must also provide government-issued identification showing their photo and name.

Vendors may provide the rebate at the time of purchase. If the rebate is not provided at the point of sale, eligible purchasers can apply to the Ontario Ministry of Finance by completing the Application for Rebate of the Ontario Portion of the HST for First Nations form.

Starting in June 2026, Ontario simplified the First Nations HST rebate application process. Individual applicants generally do not need to submit receipts when the Ontario portion of HST is $5 or less, although they must retain these receipts for their records. Supporting identification for individual applicants is generally required only for a first application or when a status card has expired. Bands and band councils must provide the applicable supporting documentation with every application. Applicants must use the updated application and Receipt Listing form.

Some examples of eligible and ineligible purchases are listed below:

For business owners providing Ontario First Nations point-of-sale relief, GST/HST registrant suppliers must follow the CRA reporting requirements outlined in GST/HST Info Sheet GI-106, Ontario First Nations Point-of-Sale Relief – Reporting Requirements for GST/HST Registrant Suppliers. The full 13% HST is generally included in GST/HST collected or collectible, while the amount credited to eligible purchasers is reported as a rebate. Suppliers may claim the relief electronically or using Form GST189, General Application for GST/HST Rebates, under Reason Code 23.

HST Exemptions on Reserves in Ontario

First Nations individuals who are registered or entitled to be registered under the Indian Act may qualify for GST/HST relief under section 87 of the Indian Act. Section 87 provides a tax exemption for certain personal property of registered individuals and bands that is situated on a reserve.

Generally, registered individuals do not pay GST/HST on property purchased on a reserve when the required documentation is provided. Property purchased off-reserve may also qualify when it is delivered to a reserve by the vendor or the vendor’s agent. If the purchaser takes the property to the reserve themselves, the section 87 GST/HST relief generally does not apply.

For services, registered individuals generally do not pay GST/HST on services performed entirely on a reserve. Different rules may apply to services acquired by Indian bands and band-empowered entities, including services related to band management activities or real property on a reserve.

To qualify for GST/HST relief, individuals must provide appropriate proof of registration with Indigenous Services Canada, such as a status card or Temporary Confirmation of Registration Document. Vendors must keep the required documentation when providing GST/HST relief.

For the full rules, exceptions, and examples, visit the Canada Revenue Agency’s page on GST/HST and First Nations peoples.

The section 87 tax exemption generally does not apply to individuals who are not registered under the Indian Act or are not entitled to be registered under it. Inuit and Métis individuals are also not eligible for this particular exemption under section 87.

Charging HST in Ontario Accurately

As a small business owner, it is important to determine the correct GST/HST treatment of the goods and services you provide. Most taxable supplies made in Ontario are subject to 13% HST, while zero-rated supplies are taxable at 0% and exempt supplies are not subject to GST/HST. The applicable rate may also depend on the CRA’s place-of-supply rules.

Businesses should ensure that they charge and collect the correct amount of HST on taxable supplies and do not charge HST on exempt or zero-rated supplies. Accurate GST/HST treatment is also important for properly reporting tax collected and claiming eligible Input Tax Credits (ITCs).

If you need clarification about the goods and services you provide and whether they are taxable, zero-rated, or exempt, the tax accountants at Accountor CPA can help. Our HST return filing services can help you properly calculate, report, and remit GST/HST.

Contact us for a free consultation regarding your HST return filing and HST obligations.

Frequently Asked Questions (FAQs)

What Items Are Exempt from HST in Canada?

Common GST/HST-exempt supplies include long-term residential rent, residential condominium fees, most health, medical, and dental services provided for medical reasons, qualifying child care services, certain educational services, legal aid services, and most financial services. Basic groceries, prescription drugs, and certain medical devices are not exempt; they are generally zero-rated at 0%.

Are Educational Services Exempt from HST?

Certain educational services are GST/HST-exempt. Examples include qualifying courses supplied by vocational schools, certain tutoring services related to approved school curricula, and music lessons. Not all educational services are automatically exempt.

Is Residential Rent Subject to HST?

Long-term rentals of residential accommodation for one month or more are generally exempt from GST/HST. Residential condominium fees are also generally exempt.

Are Financial Services Exempt from HST?

Most financial services, such as lending money and operating deposit accounts, are exempt from GST/HST. The issuance of insurance policies by insurers and arranging for their issuance by insurance agents are also generally exempt.

Do Non-Profits Qualify for HST Exemptions?

Certain supplies made by non-profit organizations may be exempt from GST/HST when specific conditions are met. Qualifying non-profit organizations may also be eligible for a public service bodies’ rebate for part of the GST/HST paid or payable on eligible expenses for which they cannot claim Input Tax Credits.

Are Medical and Dental Services HST-Exempt?

Most health, medical, and dental services provided by licensed physicians, dentists, nurses, and certain other healthcare practitioners for medical reasons are exempt from GST/HST.

Are Basic Groceries Exempt from HST?

Basic groceries are not HST-exempt; they are generally zero-rated at 0%. Examples include milk, bread, fresh fruits and vegetables, eggs, fresh meat, poultry, and fish. Certain products, including soft drinks, candy, confectionery, and snack foods, remain taxable.

How Are Child Care Services Treated Under HST?

Child care services are generally exempt from GST/HST when their primary purpose is to provide care and supervision to children 14 years of age or under for periods of less than 24 hours per day.

Are Legal Services HST-Exempt?

No. Legal services are generally taxable and subject to the applicable GST/HST rate. However, legal aid services are generally exempt from GST/HST.

Can Businesses Claim Input Tax Credits on HST-Exempt Supplies?

Businesses generally cannot claim Input Tax Credits (ITCs) for GST/HST paid or payable on purchases and expenses used to make exempt supplies. In contrast, GST/HST registrants may generally claim eligible ITCs for purchases and expenses related to making zero-rated supplies.