Other Taxes

Mining activities in Canada may be subject to other federal and provincial taxes, in 
addition to the taxes on income described in the preceding sections of this book. These 
additional taxes include value-added and sales taxes, customs duties, and land transfer 
taxes or registration fees. A brief summary of these types of levies is provided below.

Value-Added and Sales Taxes

Federal

The federal government levies a form of value-added tax 
known as the goods and services tax (GST). The current GST 
rate is 5% and applies to a broad range of goods and services 
supplied in Canada, with certain specified exceptions. Goods 
and services that are not subject to 5% GST may be zero-
rated (taxable at 0%) or exempt (not taxed).

In common with most value-added tax regimes around the 
world, the GST applies at each stage of the production and 
distribution of goods and services; however, it is fully recoverable 
to the supplier at each stage up to purchase of the supply by 
the final consumer. Thus, it is the final consumer who ultimately 
bears the tax. The recovery mechanism is the availability of an 
input tax credit for GST incurred on expenditures.

Five provinces – Ontario, Prince Edward Island, New 
Brunswick, Nova Scotia, and Newfoundland and Labrador – 

have harmonized their provincial sales taxes (PST) with the 
GST. In these provinces, the PST has been repealed and the 
GST rate increased. The result is a single harmonized sales tax 
(HST) consisting of a federal and a provincial component. Both 
components of the HST are recoverable by suppliers, with 
some exceptions.

British Columbia’s commodity tax system was harmonized 
from July 1, 2010 to March 31, 2013; however, following the 
results of a provincial referendum in 2011, the British Columbia 
government reversed its decision to harmonize, reinstating 
a separate PST and returning to the GST effective April 1, 
2013. British Columbia’s current PST is substantially the same 
as the one it repealed in July 2010. Generally, in the year of 
the transition (2013), goods and services supplied in British 
Columbia and invoiced before April 2013 are subject to HST, 
while those invoiced after March 2013 are subject to GST and, 
where applicable, PST. 

The GST/HST legislation is contained in the federal Excise 
Tax Act.

© 2013 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms 
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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 A Guide to Canadian Mining Taxation