Products & Services

Sales tax changes

The federal government and certain provincial governments are implementing a number of sales tax changes including:

the adoption of a Harmonized Sales Tax (HST) in Ontario and British Columbia; and
special rules that affect the taxes payable by investment funds across Canada.

GST and HST

The Goods and Services Tax (GST) and Harmonized Sales Tax (HST) are broad-based taxes that apply to many products and services.

HST is made up of:

Federal component (currently 5% GST)

Provincial component (rate varies by province)

HST has been in place in New Brunswick, Nova Scotia and Newfoundland & Labrador since 1997. Ontario and British Columbia will adopt HST on July 1, 2010. Québec has a 7.5% Québec Sales Tax (QST) which functions similarly to the GST and is calculated on the GST-included price.

Tax rates – Effective July 1, 2010

Here are the sales tax rates that will be charged as applicable on services provided by Investors Group as of July 1, 2010:

Province/territory	Rate
Nova Scotia	15% HST
Ontario New Brunswick Newfoundland & Labrador	13% HST
British Columbia	12% HST
Québec	5% GST + 7.5% QST
Alberta Manitoba Northwest Territories Nunavut Prince Edward Island Saskatchewan Yukon	5% GST

Special rules for investment funds

While some financial services are exempt from GST/HST, the federal government has implemented special rules effective July 1, 2010 that apply to the determination of HST on fees charged to investment funds such as management and advisory fees and fees for administrative services.

The tax payable by each fund will be based on the proportion of the fund’s units/shares held by residents in each province and territory multiplied by their respective GST/HST tax rates. This formula will effectively increase the amount of tax payable by funds in general. For any one fund, the impact will be common for all unitholders/shareholders regardless of their provincial residency.