April 26, 2026 in Toronto, Canada — Buying a car in Canada means navigating a layered tax system: federal GST, provincial HST or PST, and in Quebec, a separate QST. With rates ranging from 5% in Alberta to nearly 15% in Quebec, car buyers in some provinces pay thousands more than others.
Canada Car Tax System Explained
Canada's vehicle tax system has three main components:
- Federal GST (Goods and Services Tax): 5% on all vehicle purchases nationwide, administered by the Canada Revenue Agency (CRA).
- Provincial HST or PST: Varies by province — some provinces harmonise with GST (HST), others charge separate PST.
- Quebec QST: Quebec uses GST (5%) + Quebec Sales Tax (9.975%) instead of HST.
Tax Rates by Province 2026
| Province | Federal GST | Provincial Tax | Total on Cars | Notes |
|---|---|---|---|---|
| Ontario | 5% | 8% PST (HST) | 13% HST | HST applies to all vehicles |
| Quebec | 5% | 9.975% QST | 14.975% | GST + QST separate |
| British Columbia | 5% | 7% PST | 12% | BC PST applied to vehicle price |
| Nova Scotia | 5% | 10% PST (HST) | 15% HST | Highest combined rate |
| New Brunswick | 5% | 10% PST (HST) | 15% HST | 15% HST rate |
| PEI | 5% | 10% PST (HST) | 15% HST | Highest HST in Canada |
| Newfoundland | 5% | 10% PST (HST) | 15% HST | 15% HST |
| Manitoba | 5% | 7% PST | 12% | PST on vehicle value |
| Saskatchewan | 5% | 6% PST | 11% | PST applies |
| Alberta | 5% | 0% | 5% GST only | Lowest total tax |
| Territories | 5% | 0-5% | 5-10% | Varies by territory |
Federal GST Explained
The 5% GST applies to all vehicle purchases across Canada, regardless of province. It is calculated on the purchase price (or fair market value for private sales), minus any trade-in allowance. GST is charged by the dealer on new vehicles and must be collected on private sales as well.
HST System: Ontario, Atlantic Canada
Ontario and the four Atlantic provinces (Nova Scotia, New Brunswick, PEI, Newfoundland and Labrador) use the Harmonized Sales Tax (HST), which combines federal GST and provincial PST into a single rate. Dealers remit the full HST to CRA, which then distributes the provincial portion back to the province.
On a $60,000 car in Ontario: $60,000 x 13% = $7,800 HST, of which $5,000 is GST and $2,800 is provincial PST.
Quebec: GST + QST System
Quebec does not use HST. Instead, buyers pay 5% federal GST plus 9.975% Quebec Sales Tax (QST), calculated on the post-GST price. On a $60,000 car in Quebec:
- GST: $60,000 x 5% = $3,000
- QST: ($60,000 + $3,000) x 9.975% = $6,284.25
- Total: $9,284.25
Federal EV Rebate: iZEV Program
The federal Incentives for Zero-Emission Vehicles (iZEV) program offers up to $5,000 for new zero-emission vehicles purchased or leased. The rebate is applied at the point of sale through participating dealers. Eligibility requirements include price caps and vehicle type requirements.
Provincial EV Rebates
| Province | EV Rebate | Conditions |
|---|---|---|
| British Columbia | Up to $4,000 | Through Clean BC program |
| Quebec | Up to $7,000 | Roulez vert program |
| Ontario | Program ended | No provincial EV rebate |
| Federal (all provinces) | Up to $5,000 | iZEV program, through dealers |
Trade-In and Tax Calculation
In all provinces, GST/HST is calculated on the net purchase price after deducting the trade-in value. This means trading in a vehicle reduces your tax bill significantly:
Example: $50,000 car with $15,000 trade-in
- Net price: $50,000 - $15,000 = $35,000
- GST (Ontario): $35,000 x 13% = $4,550 (vs $6,500 without trade-in)
- You save $1,950 in tax by trading in your old car
Business Buyers: Input Tax Credits
Businesses that use vehicles for commercial purposes can claim Input Tax Credits (ITCs) to recover the GST/HST paid. This effectively means businesses pay only the difference between GST collected on sales and GST paid on purchases. Self-employed individuals and small businesses should register for GST/HST accounts to claim these credits.
Conclusion
Canada's car tax ranges from 5% (Alberta) to 15% (PEI, Nova Scotia, New Brunswick, Newfoundland). Combined with the federal iZEV rebate of up to $5,000 and provincial programs, buying an EV in Canada can significantly offset the tax burden. Use our Canada Car Tax Calculator to estimate total cost in your province.
Disclaimer: Tax rates based on CRA and provincial revenue office data as of April 2026. Confirm rates with your dealer and provincial tax authority before purchasing.
Official Resources: CRA Canada | Ontario Finance | Revenu Quebec | iZEV Program