A US business that starts shipping to Canadian customers usually applies the mental model it already has: track revenue by state, watch for an economic nexus threshold, register when you cross it. That model does not transfer. Canada's consumption tax system is built on different mechanics, different thresholds and a different filing relationship, and treating it as a Canadian version of US sales tax is the single most common mistake we see in reviews from cross border sellers.
Here is the system in the order that actually matters when you are deciding whether you owe anything.
The federal layer: GST
The Goods and Services Tax is a five percent federal tax that applies across the country. If you are registered, you charge GST on taxable supplies to Canadian customers and remit it to the Canada Revenue Agency. Unlike the US, where sales tax registration and collection is a state by state patchwork, GST is one federal registration that covers the whole country.
The provincial layer: HST and PST
Five provinces, Ontario, New Brunswick, Newfoundland and Labrador, Nova Scotia and Prince Edward Island, harmonize their provincial sales tax with GST into a single Harmonized Sales Tax, ranging from 13 to 15 percent depending on the province. You register once, charge the combined HST rate, and remit it through the same CRA relationship as GST.
The remaining provinces run GST alongside a separate Provincial Sales Tax, and this is where US sellers most often go wrong. British Columbia, Saskatchewan and Manitoba each administer their own PST, with their own registration, their own rules about what is taxable, and their own remittance schedule, entirely separate from your GST or HST filing with CRA. Quebec runs a nearly identical structure under a different name, the Quebec Sales Tax, administered by Revenu Quebec rather than CRA. Alberta and the three territories charge no provincial sales tax at all, only GST.
| Province or territory | System | Combined rate |
|---|---|---|
| Ontario | HST | 13% |
| Nova Scotia, New Brunswick, Newfoundland and Labrador, PEI | HST | 14% to 15% |
| British Columbia, Saskatchewan, Manitoba | GST plus separate PST | Varies by province, filed separately |
| Quebec | GST plus QST, filed with Revenu Quebec | Approximately 14.975% |
| Alberta, Yukon, Northwest Territories, Nunavut | GST only | 5% |
A single order shipped to a customer in British Columbia can trigger two separate tax obligations to two separate authorities, filed on two separate schedules. No accounting software collapses that into one number, because it genuinely is not one number.
The threshold that actually matters
This is where the US mental model breaks down hardest. Economic nexus in the US is about dollar volume into a specific state, and the thresholds are set state by state, commonly around 100,000 dollars in sales. GST registration is not about which province your customer sits in at all. You must register for GST once your worldwide taxable revenue exceeds 30,000 dollars Canadian over four consecutive calendar quarters, full stop, regardless of how that revenue is distributed across provinces or how much of it is even Canadian.
That 30,000 dollar figure catches small US sellers off guard because it is so much lower than any US economic nexus threshold they are used to watching. A business doing modest but genuine volume into Canada can cross it well before it would trigger nexus in even the most aggressive US state.
Below that threshold you are a small supplier and generally do not need to register or collect GST, though you may register voluntarily, which lets you recover GST paid on your own business expenses through input tax credits. Above it, registration is not optional.
What your accounting software will and will not do
This is the part vendors gloss over. QuickBooks Online's Canadian edition, which is a genuinely separate product from the US edition, tracks GST, HST and PST by province and files returns to CRA My Business Account once configured correctly. It does this well, but it is a Canadian product for a Canadian entity, and it will not appear on your US subscription. Xero handles GST, HST and PST natively as well, with CRA ready returns, and does not require the same hard product split between countries that QuickBooks does.
Wave, being a Canadian company at its core, has genuinely strong native support for GST and HST and is a reasonable choice if your Canadian operation is simple and small enough to fit its other limitations. None of these products, or any competitor we have reviewed, actively monitors your worldwide revenue against the 30,000 dollar threshold and warns you before you cross it. That monitoring is on you, or on your accountant, not on the software.
Registering, in practice
GST and HST registration happens through the CRA Business Registration Online system, and a non resident US business can register without a Canadian entity, using a program specifically for non resident sellers. You will need a Business Number, and once registered you charge tax on relevant sales, file returns on an assigned schedule, usually quarterly for a business at this scale, and remit what you collected minus any input tax credits you are entitled to claim.
Separate PST registration, where it applies, is a separate process with each provincial tax authority and does not happen automatically alongside your GST registration. If you cross into British Columbia, Saskatchewan or Manitoba in meaningful volume, treat that as its own registration task rather than an assumption CRA handled for you.
What we would actually do
Track your trailing four quarter Canadian revenue the same way you already track state by state nexus for US sales tax, and set an internal alert well below 30,000 dollars so you are not scrambling to register retroactively. Talk to an accountant who specifically handles cross border GST and HST before your first Canadian dollar, not after your thirtieth thousand, because voluntary early registration can be the right call if your input tax credits are meaningful.
If your Canadian volume is genuinely small and occasional, do not overbuild for a compliance burden you may never hit the threshold for. If it is growing and real, budget for the software's Canadian edition and a bookkeeper who already knows this system, because it is a different system, not a translated one, and treating it as familiar is how sellers end up with a CRA notice they did not see coming.
The number to actually watch is not your combined tax rate. It is your trailing four quarter Canadian revenue against 30,000 dollars, and almost nobody is watching it until they are past it.