Canada: Prepare for HST changes in provinces, 2016 | KPMG | GLOBAL

Canada: Prepare for HST changes in provinces, scheduled for 2016

Canada: Prepare for HST changes in provinces, 2016

Businesses across Canada need to consider how to implement the upcoming harmonized sales tax (HST) changes and to complete appropriate adjustments to their systems and processes. The upcoming HST changes will affect businesses located in the provinces of New Brunswick, Newfoundland and Labrador, Ontario and Prince Edward Island, as well as businesses that have activities in those provinces.


Related content

Overview of HST changes

The following HST regimes in Canada will see significant changes in the coming months:  

  • New Brunswick plans to increase its HST to 15% (from 13%) effective 1 July 2016.
  • The province of Newfoundland and Labrador plans to increase its HST to 15% (from 13%) effective 1 July 2016, and reinstate a 15% retail sales tax on some insurance premiums.
  • Ontario will continue to phase out the recaptured input tax credit rules that apply to large businesses by reducing the recapture rate to 50% (from 75%) effective 1 July 2016.
  • Prince Edward Island plans to increase its HST to 15% (from 14%) effective 1 October 2016.

Businesses—including non-resident businesses—that are registered for GST purposes are also registered for HST purposes. As such, any of these businesses that make supplies in an HST province may be required to collect HST that applies for that province. Also, many large businesses across Canada incur expenses that are subject to the recapture input tax credit requirements. 

KPMG observation

It is important to prepare for these changes as soon as possible because GST/HST applies to most transactions, and errors in systems and processes can multiply quickly and become very expensive.


Read a May 2016 report [PDF 73 KB] prepared by the KPMG member firm in Canada: Upcoming HST Changes — Get Systems and Processes Ready

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Request for proposal