Ruth Haines
Canada has several international airports that serve as hubs for passenger and cargo transportation. While the GST/HST rules governing passenger air transportation can be complex, generally, international airlines operating in Canada are not required to charge GST/HST on ticket sales if the journey includes at least one origin, destination, or stopover outside the defined taxation area, which includes Canada, the US (except Hawaii), and the islands of St. Pierre and Miquelon. Notable international airports in Canada include St. John's International Airport, Edmonton International Airport, Yellowknife Airport, Montreal Saint-Hubert Airport, Halifax Stanfield International Airport, Montreal Pierre Elliott Trudeau International Airport, Ottawa McDonald-Cartier International Airport, and Calgary International Airport.
Characteristics and Values of the 8 International Airports in Canada
| Characteristics | Values |
|---|---|
| Name of the airport | St. John's International Airport, Edmonton International Airport, Yellowknife Airport, Montreal Saint-Hubert Airport, Halifax Stanfield International Airport, Montreal Pierre Elliott Trudeau International Airport, Ottawa McDonald-Cartier International Airport, Calgary International Airport |
| Address | 100 World Pkwy, St. John's, NL A1A 5T2, Canada; Leduc County, approximately 26 kilometres away from the centre of Downtown Edmonton; 100 Idaa Rd, Yellowknife, NT NT X1A 3T2, Canada; 5700 Rte de l'Aéroport, Longueuil, QC J3Y 8Y9, Canada; 35 kilometres from Downtown Halifax; Roméo-Vachon N, Dorval, QC H4Y 1H1, Canada; 1000 Airport Parkway Private, Ottawa, ON K1V 9B4, Canada; 17 kilometres away from Downtown Calgary |
| Terminals | 1 terminal building with 8 aircraft gates, out of which 5 are accessible to passengers; 1 terminal; 1 terminal and a control tower; 3 runways, a control tower and a flight school; 1 terminal; The largest terminal in Canada; 1 terminal; 1 terminal and the tallest control tower in Canada |
| Other features | 2nd largest airport in Atlantic Canada; Largest passenger and cargo airport facility in Canada; One of the busiest airports in terms of aircraft operations; 6th busiest airport in Canada; 3rd busiest airport in Canada; 2nd busiest airport with the most passenger traffic in 2022; Busiest international airport in the Alberta province; Longest runway in Canada |
| GST/HST Tax | GST/HST taxes may apply depending on the origin and destination of the flight. For example, a flight from Vancouver to Toronto includes British Columbia's 5% GST tax, while the reverse flight from Toronto to Vancouver would be taxed at Ontario's 13% HST rate. |
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What You'll Learn
International flights departing Canada are zero-rated for GST/HST
The Goods and Services Tax (GST) and Harmonized Sales Tax (HST) in Canada are applied to most services and property sold or imported into the country. However, there are instances where certain goods and services are exempt from these taxes, including some international flights departing from Canada.
The Canada Revenue Agency (CRA) has specific rules regarding the taxation of international passenger air transportation services. If a ticket includes at least one origin, destination, or stopover that is outside the defined "taxation area," which includes Canada, the United States (excluding Hawaii), and the islands of St. Pierre and Miquelon, then the entire journey is typically considered an international service and is zero-rated for GST/HST. This means that no GST or HST will be applied to the ticket price. For example, a flight from Montreal to Tokyo with stopovers in Toronto and Vancouver would be zero-rated due to the overseas destination, even though the stopovers are within the taxation area.
On the other hand, if the origin, termination, and all stopovers of a journey are within the taxation area, the GST/HST may still apply. Additionally, trans-border day trips that originate and terminate in Canada, where the traveller is not scheduled to be outside the country for more than 24 hours, are typically subject to GST/HST.
It is important to note that the GST/HST rules for passenger air transportation services can be complex, and international airlines operating in Canada must stay informed about the relevant regulations to ensure compliance. While businesses can recover GST/HST paid on airfare and other travel expenses when filing returns, consumers who are not flying for business purposes generally cannot recover these taxes.
Some of the international airports in Canada include Calgary International Airport, Edmonton International Airport, Halifax Stanfield International Airport, Montreal-Pierre Elliott Trudeau International Airport, Ottawa McDonald-Cartier International Airport, St. John's International Airport, Yellowknife Airport, and Montreal Saint-Hubert Airport.
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Domestic flights in Canada are subject to GST/HST
Domestic flights in Canada are subject to the Goods and Services Tax (GST) and Harmonized Sales Tax (HST). The GST is Canada's federal sales tax, which is applied to most goods and services sold in the country. The current federal GST rate is 5%. The HST is a combination of the federal GST and a province's provincial tax rate, which is typically between 8% and 10%. The total combined HST rate, including both federal and provincial portions, is currently 13% or 15%.
When purchasing airline tickets, the applicable tax rate is determined by the flight's origin city. For example, a flight from Vancouver to Toronto would include British Columbia's 5% GST, whereas the reverse flight from Toronto to Vancouver would be taxed at Ontario's 13% HST rate. In addition to these sales taxes, Canadian flights also include an airport improvement fee, which varies depending on the destination. For instance, some airports in Ontario charge departing passengers $30, while those flying out of Vancouver pay $25.
The GST/HST also applies to other travel-related expenses such as hotels and car rentals. Businesses registered for GST purposes can recover the GST/HST incurred on these expenses by claiming input tax credits (ITCs) when filing their GST/HST returns. However, consumers who are not travelling for business purposes generally cannot recover airfare taxes in Canada.
It is worth noting that for continuous journeys that include air travel and have an overseas origin, termination, or stopover, all domestic passenger transportation services included in that journey are zero-rated. This means that if a person purchases a return flight from Ottawa, Ontario to Edmonton, Alberta with a stopover in the United States, the entire journey is considered outside of Canada for taxation purposes, and the GST/HST would not apply.
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International flights to Canada may be taxed
Canada is known for having some of the most expensive flight prices in the world, with multiple types of taxes contributing to these high prices. These taxes apply to both domestic and international flights to and from Canada.
The Goods and Services Tax (GST) is Canada's federal sales tax, which is currently set at 5%. The Harmonized Sales Tax (HST) is a combination of the federal GST and a province's provincial tax rate, which is typically between 8% and 10%. The total combined HST rate is currently 13% to 15%. The GST and HST are included in the price of airline tickets, and the rate applied depends on the city of origin of the flight. For example, a flight from Vancouver to Toronto includes British Columbia's 5% GST, while the reverse flight from Toronto to Vancouver would be taxed at Ontario's 13% HST rate.
In addition to the GST and HST, there are other taxes and fees assessed on Canadian flights. This includes an airport improvement fee, which varies by destination, and an Air Travellers Security Charge (ATSC) or Air Travellers Security Tax, which is $7.12 for domestic flights, $12.10 for transborder flights departing from Canada, and $12.71 for transborder flights arriving from the United States. The security tax is a flat tax applied to all airline tickets departing from Canada, and it was recently increased by 33%.
It is important to note that taxes on airline tickets in Canada may be recoverable for individuals travelling for business purposes. Businesses can claim tax credits by subtracting their total input tax credits from the total GST/HST they collected from customers. Travel-related expenses like airfare, hotels, and car rentals may qualify as allowable business expenses. However, consumers who are not flying for business purposes generally do not qualify for tax recovery on airfare taxes in Canada.
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The Canada Revenue Agency (CRA) permits GST/HST recovery for businesses
The Canada Revenue Agency (CRA) permits businesses to recover the GST/HST they incur during commercial activities. This is applicable to businesses registered for GST purposes, and they must charge, collect, and report GST/HST on taxable supplies. Most services and goods imported or sold in Canada are subject to GST/HST.
The taxes paid on these business expenses are called input tax credits (ITCs). Businesses claim ITCs by subtracting them from the GST/HST collected from customers on their GST/HST return. Travel expenses like flights, hotels, and car rentals may qualify as allowable business expenses. Businesses should maintain documentation like invoices to support their claims, as these may be requested by the CRA during audits.
To register for GST/HST, businesses receive a 15-digit registration number. The first nine digits identify the business, followed by 'RT' for the GST/HST program, and then a four-digit account number. This number is essential for future interactions with the CRA. Businesses can manage their GST/HST accounts online, including changing their fiscal year and authorised representatives.
Additionally, new measures effective from July 1, 2021, require non-resident businesses and digital platform operators to register under a simplified GST/HST framework and collect the tax on cross-border digital products and services. However, they are not obliged to collect GST/HST if the recipient is registered under the normal GST/HST rules and provides their registration number.
While the CRA allows businesses to recover GST/HST on airfare, it is important to note that the applicable tax rate depends on the flight's city of origin. For example, a flight from Vancouver to Toronto includes British Columbia's 5% GST, while the return flight would be taxed at Ontario's 13% HST rate.
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Airport Improvement Fees (AIF) are charged at most Canadian airports
The AIF is not the only tax charged on Canadian airline tickets. Taxes on airline tickets are especially relevant to business travellers. The Canada Revenue Agency (CRA) allows businesses registered for GST purposes to recover any GST/HST incurred during commercial activity. These businesses must also charge and collect GST/HST on all taxable supplies and regularly report these taxes on GST/HST returns. Travel-related expenses like airfare, hotels, and car rentals may qualify as allowable business expenses.
Consumers who are not flying for business do not generally qualify to recover airfare taxes in Canada. However, the GST/HST rate on airline tickets is based on the city of origin for the flight. For example, a flight from Vancouver to Toronto includes British Columbia's 5% GST tax, while the reverse flight from Toronto to Vancouver would be taxed at Ontario's 13% HST rate.
Some of the international airports in Canada include St. John's International Airport, Edmonton International Airport, Yellowknife Airport, Montreal Saint-Hubert Airport, Halifax Stanfield International Airport, Montreal Pierre Elliott Trudeau International Airport, Ottawa McDonald-Cartier International Airport, and Calgary International Airport.
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