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Taxes and Fees to Watch for When Travelling in Canada

Photo by Sharon Drummond

By Candice Walsh

You may have heard of hotel room tax, but how about a marketing fee or a liquor consumption tax? The fees and taxes you’ll face while travelling in Canada can be complicated, not least because taxes vary from province to province.

For air travel, this process is about to become easier: last week the Canadian government announced that it will require airlines to break down all fees and taxes for the customer.

Here’s an overview of other fees you can expect to pay.

Sales Tax

Canada has three types of sales tax: Provincial Sales Taxes (PST), federal Goods and Services Taxes (GST), and a Harmonized Sales Tax (HST), a single combined PST and GST that is used in British Columbia, Ontario, Newfoundland and Labrador, New Brunswick and Nova Scotia.

While the GST is set nationwide at 5%, PST varies from 0% in Alberta to 10% in PEI and in Nova Scotia, where it’s incorporated into the HST.

See a full list of all sales tax rates across Canada.

Room Tax

Whatever your lodgings may be, in Canada you’ll be taxed for your room. The Canadian Hotel Association has an excellent summary (PDF).

The lowest you’ll be charged is 2% in British Columbia, Nova Scotia, PEI and Saskatchewan; and the highest is 5% in Manitoba.

Destination Marketing Fee

Levied by cities in Alberta, Ontario and Saskatchewan, the Destination Marketing Fund (DMF) fee provides funds for local tourism promotion.

Alberta has the priciest combo: a 4% room tax plus a 1% DMF in Edmonton and Calgary.

Food and Alcohol

Your bill at a restaurant or bar is subject to PST. The three Canadian territories (Yukon, Northwest Territories and Nunavut) have no such tax at all, while Quebec has the highest, at 8.5% PST (and soon to be 9.5% PST in 2012).

There is even some talk of Quebec enforcing taxes on junk food to discourage unhealthy eating and bring down obesity rates in the country.

Two provinces have separate taxes on retail alcohol sales: in Saskatchewan the Liquor Consumption Tax is 10%; in British Columbia, liquor tax is a whopping 16%.

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