Ontario Sales Tax Rate History
From the introduction of the federal Goods and Services Tax in 1991 through the harmonization of Ontario's provincial Retail Sales Tax into the Harmonized Sales Tax in 2010, Ontario's consumption tax structure has changed several times. This page documents every major rate milestone and the reverse-calculation formula that applied in each era.
Rate Milestones
| Effective Date | Tax | Rate | Notes |
|---|---|---|---|
| Jan 1, 1991 | GST | 7% | GST introduced federally, replacing Manufacturers' Sales Tax (MST) |
| Jan 1, 1991 | Ontario PST (RST) | 8% | Provincial Retail Sales Tax ran alongside GST |
| Jul 1, 2006 | GST | 6% | GST reduced 1 point by federal government |
| Jan 1, 2008 | GST | 5% | GST reduced a further 1 point |
| Jul 1, 2010 | HST | 13% | Ontario RST and GST merged into single HST (5% federal + 8% provincial); Ontario RST abolished |
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Historical Context
1991: GST and Ontario RST
When the federal Goods and Services Tax replaced the hidden Manufacturers' Sales Tax (MST) on January 1, 1991, Ontario retained its own provincial Retail Sales Tax (RST) at 8%. Businesses and consumers faced two separate taxes — the 7% GST administered by the Canada Revenue Agency and the 8% RST administered by the Ontario Ministry of Finance. RST was a provincial tax on the sale or rental of most goods and certain services; it was not harmonized with the federal system and had its own registration, filing, and exemption rules.
2006–2008: Federal GST Reductions
The federal government reduced the GST by one percentage point on July 1, 2006 (from 7% to 6%) and again on January 1, 2008 (from 6% to 5%), under the Harper government. Ontario's 8% RST rate did not change during this period. The combined effective rate on a pre-tax purchase therefore fell from 15% to 14% to 13% as the federal component was cut, but the dual-tax structure remained in place.
2010: HST Harmonization
On July 1, 2010, Ontario abolished its Retail Sales Tax and merged the provincial component with the federal GST into a single 13% Harmonized Sales Tax (HST) — 5% federal plus 8% provincial. HST is administered entirely by the Canada Revenue Agency on one combined return, eliminating the separate provincial filing obligation. The harmonization was one of the largest provincial tax reforms in Canadian history, simplifying compliance for businesses while shifting some previously RST-exempt items into the HST base.
Reverse Calculation by Era
When working backwards from a gross total to extract the pre-tax amount, the divisor depends on which tax structure was in effect at the time of the transaction.
| Era | Tax Structure | Reverse Formula |
|---|---|---|
| 1991–2006 | GST 7% + RST 8% | Pre-tax = Total ÷ 1.15 |
| 2006–2008 | GST 6% + RST 8% | Pre-tax = Total ÷ 1.14 |
| 2008–2010 | GST 5% + RST 8% | Pre-tax = Total ÷ 1.13 |
| 2010–present | HST 13% | Pre-tax = Total ÷ 1.13 |
Before harmonization, GST and RST were not combined into a single tax — RST applied to the pre-GST selling price, not the GST-inclusive amount. The divisors above (1.15, 1.14, 1.13) are simplified approximations for quick reverse calculations; precise historical filings may require separating GST and RST components individually. For current transactions, divide by 1.13 and subtract to isolate HST.
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Calculations are arithmetic estimations only and do not constitute formal tax or corporate auditing advice. All figures must be verified against current CRA guidelines before filing.