The creation of this particular tax stems from an attempt to balance the burdens between provincial governments. The structure of the Canadian tax system in a simplified form begins with the citizen paying taxes to both the province and the federal government, in turn the provincial government also pays a portion of their earnings, (in the form of provincial taxes), to the federal tax system.
The actual revenue generated by the HST/GST, (Harmonized Sales tax & the Goods and Services tax), comes from the size of the populations within the provinces who are then taxed accordingly. Nevertheless, not all provinces participate in the HST with some still recognizing only the GST. The following provinces recognize and participate in the HST
- Prince Edward Island
- New Brunswick
- Nova Scotia
The important fact to remember here is both the GST and the HST follow the same guidelines and only pertain to those provinces that participate in either program.