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Katherine Smallwood Katherine Smallwood
Canadian Life Skills Worker

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Online Guide for Newcomers to Prince Edward Island - Canada

Sales Taxes

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Store Receipt
An example of a store receipt: the HST is charged on the batteries, and no tax is charged on milk

In Canada sales tax is charged on almost everything you buy. The final price you pay at checkout will be higher than the price tag on the item on the shelf or the service listed on a price list.

In PEI you may have to pay Harmonized Sales Tax (HST) of 14% when you buy products and services. For example, if you are buying something that has a price tag of $100, and it is a taxable item, you will pay $114 at checkout.

Sales Tax Exemptions

Some items are exempt from the provincial portion of the HST, and for some there are no taxes charged at all. This means that for some things you have to pay the federal Goods and Services Tax (GST) of 5%, and for some you do not have to pay the sales tax.

Some items on which no sales tax is charged are:

  • basic grocery items like milk, eggs, rice, etc.
  • prescription drugs

There are some services that are completely tax exempt as well, like residential rent, municipal water, municipal public transit, some air travel, car insurance, health and dental care, music lessons, day care services, and legal aid services.

Some items that are exempt from the provincial portion of the HST, and are subject to only 5% GST are:

  • heating oil
  • children's clothing and footwear
  • books