In Canada, taxes, tariffs, and duties are collected by different levels of government to fund their programs and services. The three levels of taxation are:
- Federal, through the Canada Revenue Agency;
- Provincial / Territorial, through respective provincial/territorial finance or revenue departments; and
- Municipal, through local government.
There are different types of tax applied by these levels of government on consumers, wage earners, and businesses. The basic types of taxes include:
- Income tax derived from an individual’s employment or a corporation’s business revenues;
- Consumer (retail or sales taxes) and Excise taxes, levied on the production, sale, or consumption of goods and services;
- Property taxes, derived from the sale and transfer of property.
- Import / Export, based on the movement of goods across borders.
The amount of tax each Canadian pays depends on a number of factors including:
- Your employment income (how much you earn)
- Where you live (your province, city, and whether you own or rent)
- What deductions you are eligible to declare (amounts you can subtract from your income to reduce your taxable income); and
- The products you consume and the consumption taxes associated with those products.