Affordable GIFI Financial Statement Reporting for Canadian Businesses

HST combines the 5% federal GST with a provincial component in five participating provinces. For 2026 the combined rates are 13% in Ontario, 15% in New Brunswick, Newfoundland and Labrador, and Prince Edward Island, and 14% in Nova Scotia since 1 April 2025. Elsewhere you charge the 5% GST alone, or GST plus a separate provincial tax. The rate follows the province of supply, not where your business sits.

Canadian income tax is built up in layers. You total your income for the year, subtract the deductions you qualify for to arrive at taxable income, then apply the federal brackets and your province's brackets to that figure. Each bracket rate applies only to the income sitting inside it, so earning more never retaxes the dollars below. Non-refundable credits, starting with the basic personal amount, come off the tax afterwards. Look up the CRA bracket table for the tax year you are filing.

Canada taxes income in graduated brackets, so only the income above a threshold is taxed at that bracket's higher rate and moving up a bracket never reprices the income below it. There is one federal set of brackets and a separate set for each province and territory, and the thresholds are indexed to inflation every year. Look up the current figures for your province on the CRA rate tables rather than relying on an older list.

Income up to the basic personal amount is effectively untaxed, because that credit offsets the federal tax on it, and each province and territory has its own equivalent amount. Both figures change every year with indexation, so look up the amount for the tax year in question. Other credits, such as the age amount, tuition, or the disability amount, lift the point where tax actually starts. Tax withheld at source below that point comes back as a refund.

Medical costs give a non-refundable credit rather than a deduction. Eligible items include prescription drugs, dental work, eyeglasses and contact lenses, fees paid to medical practitioners authorised to practise, private health plan premiums, attendant care and travel for treatment unavailable locally. Over-the-counter products and most cosmetic procedures do not qualify. Only the portion above an income-based threshold counts, the claim period may end at any point in the tax year rather than following the calendar year, and pooling the family claim on one spouse usually helps.

Those are American terms. The Canadian equivalent is the personal tax credits return you complete for an employer, claiming the federal and provincial basic personal amount plus any other credits you qualify for, such as tuition or the disability amount. Your employer uses it to set the tax withheld from each paycheque. The federal basic personal amount for 2026 is $16,452, tapering to $14,829 as net income runs from $181,440 to $258,482.

The Canada Revenue Agency is the federal body that administers income tax, GST/HST, payroll deductions and most benefit payments, including the Canada child benefit and the GST/HST credit. It processes returns, issues assessments and refunds, collects amounts owing, and runs reviews and audits. Provinces set their own rates, but the CRA collects personal and corporate tax for every province except Quebec, which administers its own returns through Revenu Quebec. You reach it by phone or through CRA My Account.

Commodity tax is the practitioner's term for taxes charged on transactions in goods and services rather than on income. In Canada it covers GST at 5% for 2025 and 2026, the HST in participating provinces, provincial sales taxes, Quebec's QST, and excise and fuel levies. The seller collects the tax and remits it to the government, so the business acts as collector while the buyer ultimately bears the cost.

A taxable supply is a good or service supplied in the course of a commercial activity, and it is the category that GST/HST attaches to. Most sales fall here: goods, services, leases, licences and admissions. Two sub-groups matter. Zero-rated supplies are taxable at 0%, such as basic groceries, prescription drugs and most exports, and still support input tax credits. Exempt supplies, such as residential rent, most health care and municipal transit, are outside the tax and give no credits.

Your obligations are to report all income, file on time, pay what you owe, and keep records that support both. For an individual that means a T1 each year, due 30 April 2026 for the 2025 tax year. Business owners add GST/HST returns once registered, payroll remittances if they have staff, a T2 for a corporation, and instalments where required. Keep records six years from the end of the last tax year they relate to.

Each year needs its own return, prepared on that year's forms and filed separately. The CRA accepts prior-year returns, and tax software approved by the CRA can usually transmit several recent years electronically while older years go in on paper. File the oldest year first so carry-forward amounts flow through correctly. Interest and late-filing penalties accrue on any balance owing, and relief from penalties and interest can be requested on Form RC4288. Keep records six years from the end of the last tax year they relate to.

Check CRA My Account first: it shows whether the refund was issued, the date, and whether it went by direct deposit or cheque. Common reasons are direct deposit to a closed account, a mailed cheque still in transit or sent to an old address, the refund applied to tax you owe for another year, or it being set off against another government debt. Update your banking and address details with the CRA.