CRA confirms that provincial carbon taxes are subject to HST/GST

CRA has published a Memorandum discussing ETA. s. 154. Various provincial taxes can be part of the consideration for a supply either through being deemede to be consideration by s. 154 or on general principles, so that GST or HST effectively is collectible on the amount of the provincial tax. An example is stewardship fees required to be paid by a tire manufacturer to a waste diversion organization under provincial waste diversion legislation both when the tire manufacturer charges the tire retailer for such fees and when the tire retailer breaks out a separate charge for same amounts in its invoice to retail tire purchasers. (See also 18 September 2015 Ruling 168521r.) A second example is a provincial carbon tax charged to a retail purchaser of gasoline.

Neal Armstrong. Summary of GST/HST Memorandum 3.5 “Application of GST/HST to Other Taxes, Duties, and Fees” April 2016 under ETA s. 154(2).