Regulations Amending Various GST/HST Regulations, No. 14 (Nova Scotia): SOR/2025-77

Canada Gazette, Part II, Volume 159, Number 7

Registration
SOR/2025-77 March 6, 2025

EXCISE TAX ACT

P.C. 2025-280 March 5, 2025

Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, makes the annexed Regulations Amending Various GST/HST Regulations, No. 14 (Nova Scotia) under sections 277^{footnote a} and 277.1^{footnote b} of the Excise Tax Act ^{footnote c}.

Regulations Amending Various GST/HST Regulations, No. 14 (Nova Scotia)

New Harmonized Value-added Tax System Regulations

1 The New Harmonized Value-added Tax System Regulations ^{footnote 1} are amended by adding the following after section 33.5:

Nova Scotia — tax rate

33.6 (1) For the purposes of paragraph (a) of the definition tax rate in subsection 123(1) of the Act, the prescribed rate for Nova Scotia is 9%.

Nova Scotia offshore area — tax rate

(2) For the purposes of paragraph (b) of the definition tax rate in subsection 123(1) of the Act, the prescribed rate for the Nova Scotia offshore area is 9%.

2 The Regulations are amended by adding the following after section 58.64:

PART 3.8
Nova Scotia Transitional Rules — 2025 Rate Change

Adaptation — paragraph 172.1(5)(c) of Act

58.65 (1) If a participating employer of a pension plan acquires property or a service for the purpose of making a supply of all or part of the property or service to a pension entity of the pension plan before April 2025, for the purposes of determining the value for B in paragraph 172.1(5)(c) of the Act, the amount for Nova Scotia in respect of a taxable supply of all or part of the property or service deemed to have been made under paragraph 172.1(5)(a) of the Act is determined by adapting the description of F in paragraph 172.1(5)(c) of the Act to read as follows:

F

is the provincial factor in respect of the pension plan and the participating province for the particular fiscal year, determined as if the tax rate for Nova Scotia on the last day of the particular fiscal year were 10%; and

Adaptation — paragraph 172.1(5.1)(c) of Act

(2) If a participating employer of a pension plan acquires property or a service for the purpose of making a supply of all or part of the property or service to a master pension entity of the pension plan before April 2025, for the purposes of determining the value for B in paragraph 172.1(5.1)(c) of the Act, the amount for Nova Scotia in respect of a taxable supply of all or part of the property or service deemed to have been made under paragraph 172.1(5.1)(a) of the Act is determined by adapting the description of G in paragraph 172.1(5.1)(c) of the Act to read as follows:

G is the provincial factor in respect of the pension plan and the participating province for the particular fiscal year, determined as if the tax rate for Nova Scotia on the last day of the particular fiscal year were 10%, and

Adaptation — paragraphs 172.1(6)(c) and (7)(c) of Act

(3) In respect of a fiscal year of a person that includes April 1, 2025, for the purposes of determining the value for B in paragraph 172.1(6)(c) of the Act and the value for B in paragraph 172.1(7)(c) of the Act, the amount for Nova Scotia is determined by adapting the description of F in paragraph 172.1(6)(c) of the Act and the description of F in paragraph 172.1(7)(c) of the Act to read as follows:

F is the provincial factor in respect of the pension plan and the participating province for the particular fiscal year, determined as if the tax rate for Nova Scotia on the last day of the particular fiscal year were the rate determined by the formula

10% − (1% × G/H)

where

G

is the number of days in the particular fiscal year that are after March 2025, and

H

is the number of days in the particular fiscal year; and

Adaptation — paragraph 172.1(6.1)(c) of Act

(4) In respect of a fiscal year of a person that includes April 1, 2025, for the purposes of determining the value for B in paragraph 172.1(6.1)(c) of the Act, the amount for Nova Scotia is determined by adapting the description of G in that paragraph to read as follows:

G is the provincial factor in respect of the pension plan and the participating province for the particular fiscal year, determined as if the tax rate for Nova Scotia on the last day of the particular fiscal year were the rate determined by the formula

10% − (1% × G₁/G₂)

where

G₁

is the number of days in the particular fiscal year that are after March 2025, and

G₂

is the number of days in the particular fiscal year, and

Adaptation — paragraph 172.1(7.1)(c) of Act

(5) In respect of a fiscal year of a person that includes April 1, 2025, for the purposes of determining the value for B in paragraph 172.1(7.1)(c) of the Act, the amount for Nova Scotia is determined by adapting the description of G in that paragraph to read as follows:

G is the provincial factor in respect of the particular pension plan and the participating province for the particular fiscal year, determined as if the tax rate for Nova Scotia on the last day of the particular fiscal year were the rate determined by the formula

10% − (1% × G₁/G₂)

where

G₁

is the number of days in the particular fiscal year that are after March 2025, and

G₂

is the number of days in the particular fiscal year, and

Adaptation — employee and shareholder benefits

58.66 In respect of the 2025 taxation year, if

• (a) an amount is required to be included under paragraph 6(1)(a) or (e) of the Income Tax Act in computing an individual’s income from an office or employment and the last establishment of the employer at which the individual ordinarily worked, or to which the individual ordinarily reported, in the year in relation to that office or employment is located in Nova Scotia or the Nova Scotia offshore area, or
• (b) an amount is required under subsection 15(1) of the Income Tax Act to be included in computing an individual’s income and the individual is resident in Nova Scotia at the end of the year

the portion of subclause (I) of the description of A in clause 173(1)(d)(vi)(B) of the Act after sub-subclause 2 is adapted as follows:

• 13.25%, and

Transitional specified year — subsection 218.1(1.2) of Act

58.67 For the purpose of determining the tax payable by a person under subsection 218.1(1.2) of the Act for a specified year (as defined in section 217 of the Act) of the person that includes April 1, 2025 and for Nova Scotia or the Nova Scotia offshore area, the tax rate for those participating provinces is deemed to be equal to the rate determined by the formula

10% − (1% × A/B)

where

A

is the number of days in the specified year that are after March 2025; and

B

is the number of days in the specified year.

Adaptation — rebate for pension entities

58.68 For the purposes of determining the provincial pension rebate amount for a claim period (as those terms are defined in subsection 261.01(1) of the Act) of a pension entity that includes April 1, 2025, the description of C in paragraph (a) of the definition provincial pension rebate amount in that subsection is adapted as follows if the participating province referred to in that paragraph is Nova Scotia:

C is the rate determined by the formula

10% − (1% × C₁/C₂)

where

C₁

is the number of days in the claim period that are after March 2025, and

C₂

is the number of days in the claim period, and

Games of Chance (GST/HST) Regulations

3 Clause (i)(A) of the description of E₃ in subsection 7(7) of the Games of Chance (GST/HST) Regulations ^{footnote 2} is amended by striking out “or” at the end of subclause (I) and by replacing subclause (II) with the following:

• (II) Nova Scotia, the percentage referred to in paragraph 2(a.1) of the Automobile Operating Expense Benefit (GST/HST) Regulations, or
• (III) New Brunswick, Prince Edward Island or Newfoundland and Labrador, the percentage referred to in paragraph 2(b) of the Automobile Operating Expense Benefit (GST/HST) Regulations, and

Streamlined Accounting (GST/HST) Regulations

4 (1) Clause 15(5)(a)(i)(B) of the Streamlined Accounting (GST/HST) Regulations ^{footnote 3} is replaced by the following:

• (A.1) 5.3%, if the supply is made in Nova Scotia,
• (B) 6.1%, if the supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and

(2) Paragraph 15(5)(a) of the Regulations is amended by adding the following after subparagraph (i):

• (i.1) if the registrant makes the supply through a permanent establishment of the registrant in Nova Scotia,
  • (A) 3.9%, if the supply is made in Ontario,
  • (B) 4.7%, if the supply is made in Nova Scotia,
  • (C) 5.6%, if the supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and
  • (D) 0%, if the supply is made in a non-participating province,

(3) The portion of subparagraph 15(5)(a)(ii) of the Regulations before clause (A) is replaced by the following:

• (ii) if the registrant makes the supply through a permanent establishment of the registrant in New Brunswick, Prince Edward Island or Newfoundland and Labrador,

(4) Clause 15(5)(a)(ii)(B) of the Regulations is replaced by the following:

• (A.1) 4.2%, if the supply is made in Nova Scotia,
• (B) 5%, if the supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and

(5) Clause 15(5)(a)(iii)(B) of the Regulations is replaced by the following:

• (A.1) 9.6%, if the supply is made in Nova Scotia,
• (B) 10.4%, if the supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and

(6) Clause 15(5)(b)(i)(B) of the Regulations is replaced by the following:

• (A.1) 9.6%, if the supply is made in Nova Scotia,
• (B) 10.4%, if the supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and

(7) Paragraph 15(5)(b) of the Regulations is amended by adding the following after subparagraph (i):

• (i.1) if the registrant makes the supply through a permanent establishment of the registrant in Nova Scotia,
  • (A) 8.6%, if the supply is made in Ontario,
  • (B) 9.4%, if the supply is made in Nova Scotia,
  • (C) 10.2%, if the supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and
  • (D) 1.6%, if the supply is made in a non-participating province,

(8) The portion of subparagraph 15(5)(b)(ii) of the Regulations before clause (A) is replaced by the following:

• (ii) if the registrant makes the supply through a permanent establishment of the registrant in New Brunswick, Prince Edward Island or Newfoundland and Labrador,

(9) Clause 15(5)(b)(ii)(B) of the Regulations is replaced by the following:

• (A.1) 9.2%, if the supply is made in Nova Scotia,
• (B) 10%, if the supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and

(10) Clause 15(5)(b)(iii)(B) of the Regulations is replaced by the following:

• (A.1) 11.3%, if the supply is made in Nova Scotia,
• (B) 12%, if the supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and

5 The description of C in subsection 17(1) of the Regulations is amended by striking out “or” at the end of paragraph (c) and by replacing paragraph (d) with the following:

• (d) an amount equal to 3.4% of the portion of the registrant’s net specified supplies for the particular reporting period that is attributable to supplies which are made through a permanent establishment of the registrant in Nova Scotia and to which the quick-method rate of 0% applies, or
• (e) an amount equal to 4% of the portion of the registrant’s net specified supplies for the particular reporting period that is attributable to supplies which are made through a permanent establishment of the registrant in New Brunswick, Prince Edward Island or Newfoundland and Labrador and to which the quick-method rate of 0% applies; and

6 (1) Clause 19(3)(a)(i)(B) of the Regulations is replaced by the following:

• (A.1) 10.6%, if the particular supply is made in Nova Scotia,
• (B) 11.4%, if the particular supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and

(2) Paragraph 19(3)(a) of the Regulations is amended by adding the following after subparagraph (i):

• (i.1) if the registrant makes the particular supply through a permanent establishment of the registrant in Nova Scotia,
  • (A) 8.6%, if the particular supply is made in Ontario,
  • (B) 9.4%, if the particular supply is made in Nova Scotia,
  • (C) 10.2%, if the particular supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and
  • (D) 1.6%, if the particular supply is made in a non-participating province,

(3) The portion of subparagraph 19(3)(a)(ii) of the Regulations before clause (A) is replaced by the following:

• (ii) if the registrant makes the particular supply through a permanent establishment of the registrant in New Brunswick, Prince Edward Island or Newfoundland and Labrador,

(4) Clause 19(3)(a)(ii)(B) of the Regulations is replaced by the following:

• (A.1) 9.2%, if the particular supply is made in Nova Scotia,
• (B) 10%, if the particular supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and

(5) The portion of subparagraph 19(3)(a)(iv) of the Regulations before clause (A) is replaced by the following:

• (iv) if subparagraphs (i) to (ii) do not apply,

(6) Clause 19(3)(a)(iv)(B) of the Regulations is replaced by the following:

• (A.1) 11.2%, if the particular supply is made in Nova Scotia,
• (B) 12%, if the particular supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and

(7) Clause 19(3)(b)(i)(B) of the Regulations is replaced by the following:

• (A.1) 11.8%, if the particular supply is made in Nova Scotia,
• (B) 12.6%, if the particular supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and

(8) Clauses 19(3)(b)(ii)(A) to (C) of the Regulations are replaced by the following:

• (A) 10.5%, if the particular supply is made in Ontario,
• (B) 11.3%, if the particular supply is made in Nova Scotia,
• (C) 12%, if the particular supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and
• (D) 3.7%, if the particular supply is made in a non-participating province,

(9) Clause 19(3)(b)(ii.1)(B) of the Regulations is replaced by the following:

• (A.1) 11.9%, if the particular supply is made in Nova Scotia,
• (B) 12.7%, if the particular supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and

(10) Clause 19(3)(b)(iii)(B) of the Regulations is replaced by the following:

• (A.1) 9.6%, if the particular supply is made in Nova Scotia,
• (B) 10.4%, if the particular supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and

(11) Clause 19(3)(b)(iv)(B) of the Regulations is replaced by the following:

• (A.1) 11.9%, if the particular supply is made in Nova Scotia,
• (B) 12.7%, if the particular supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and

(12) Subclause 19(3)(c)(i)(A)(II) of the Regulations is replaced by the following:

• (I.1) 11%, if the particular supply is made in Nova Scotia,
• (II) 11.8%, if the particular supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and

(13) Subclauses 19(3)(c)(i)(B)(I) to (III) of the Regulations are replaced by the following:

• (I) 9.7%, if the particular supply is made in Ontario,
• (II) 10.5%, if the particular supply is made in Nova Scotia,
• (III) 11.3%, if the particular supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and
• (IV) 2.8%, if the particular supply is made in a non-participating province,

(14) Subclause 19(3)(c)(i)(C)(II) of the Regulations is replaced by the following:

• (I.1) 7.8%, if the particular supply is made in Nova Scotia,
• (II) 8.6%, if the particular supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and

(15) Subclause 19(3)(c)(i)(D)(II) of the Regulations is replaced by the following:

• (I.1) 11.7%, if the particular supply is made in Nova Scotia,
• (II) 12.4%, if the particular supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and

(16) Subclause 19(3)(c)(ii)(A)(II) of the Regulations is replaced by the following:

• (I.1) 11.5%, if the particular supply is made in Nova Scotia,
• (II) 12.3%, if the particular supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and

(17) Subclauses 19(3)(c)(ii)(B)(I) to (III) of the Regulations are replaced by the following:

• (I) 10.5%, if the particular supply is made in Ontario,
• (II) 11.3%, if the particular supply is made in Nova Scotia,
• (III) 12%, if the particular supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and
• (IV) 3.7%, if the particular supply is made in a non-participating province,

(18) The portion of clause 19(3)(c)(ii)(C) of the Regulations before subclause (I) is replaced by the following:

• (C) if the registrant makes the particular supply through a permanent establishment of the registrant in Prince Edward Island or Newfoundland and Labrador,

(19) Subclause 19(3)(c)(ii)(C)(II) of the Regulations is replaced by the following:

• (I.1) 9.7%, if the particular supply is made in Nova Scotia,
• (II) 10.5%, if the particular supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and

(20) Subclause 19(3)(c)(ii)(D)(II) of the Regulations is replaced by the following:

• (I.1) 11.9%, if the particular supply is made in Nova Scotia,
• (II) 12.7%, if the particular supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and

(21) Clause 19(3)(c.1)(i)(B) of the Regulations is replaced by the following:

• (A.1) 7.8%, if the particular supply is made in Nova Scotia,
• (B) 8.6%, if the particular supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and

(22) Clause 19(3)(c.1)(ii)(B) of the Regulations is replaced by the following:

• (A.1) 9.7%, if the particular supply is made in Nova Scotia,
• (B) 10.5%, if the particular supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and

(23) Clause 19(3)(c.2)(i)(B) of the Regulations is replaced by the following:

• (A.1) 11.7%, if the particular supply is made in Nova Scotia,
• (B) 12.4%, if the particular supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and

(24) Clause 19(3)(c.2)(ii)(B) of the Regulations is replaced by the following:

• (A.1) 11.9%, if the particular supply is made in Nova Scotia,
• (B) 12.7%, if the particular supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and

(25) Clause 19(3)(d)(i)(B) of the Regulations is replaced by the following:

• (A.1) 11.8%, if the particular supply is made in Nova Scotia,
• (B) 12.5%, if the particular supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and

(26) Clauses 19(3)(d)(ii)(A) to (C) of the Regulations are replaced by the following:

• (A) 10.9%, if the particular supply is made in Ontario,
• (B) 11.6%, if the particular supply is made in Nova Scotia,
• (C) 12.4%, if the particular supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and
• (D) 4.1%, if the particular supply is made in a non-participating province,

(27) Clause 19(3)(d)(iii)(B) of the Regulations is replaced by the following:

• (A.1) 9.3%, if the particular supply is made in Nova Scotia,
• (B) 10.1%, if the particular supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and

(28) Clause 19(3)(d)(iv)(B) of the Regulations is replaced by the following:

• (A.1) 12%, if the particular supply is made in Nova Scotia,
• (B) 12.8%, if the particular supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and

(29) Subparagraph 19(3)(d.1)(ii) of the Regulations is replaced by the following:

• (i.1) 9.3%, if the particular supply is made in Nova Scotia,
• (ii) 10.1%, if the particular supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and

(30) Subparagraph 19(3)(d.2)(ii) of the Regulations is replaced by the following:

• (i.1) 12%, if the particular supply is made in Nova Scotia,
• (ii) 12.8%, if the particular supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and

(31) Clause 19(3)(e)(i)(B) of the Regulations is replaced by the following:

• (A.1) 11.9%, if the particular supply is made in Nova Scotia,
• (B) 12.6%, if the particular supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and

(32) Paragraph 19(3)(e) of the Regulations is amended by adding the following after subparagraph (i):

• (i.1) if the registrant makes the particular supply through a permanent establishment of the registrant in Nova Scotia,
  • (A) 10.6%, if the particular supply is made in Ontario,
  • (B) 11.4%, if the particular supply is made in Nova Scotia,
  • (C) 12.2%, if the particular supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and
  • (D) 3.8%, if the particular supply is made in a non-participating province,

(33) The portion of subparagraph 19(3)(e)(ii) of the Regulations before clause (A) is replaced by the following:

• (ii) if the registrant makes the particular supply through a permanent establishment of the registrant in New Brunswick or Newfoundland and Labrador,

(34) Clause 19(3)(e)(ii)(B) of the Regulations is replaced by the following:

• (A.1) 11.3%, if the particular supply is made in Nova Scotia,
• (B) 12.1%, if the particular supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and

(35) Clause 19(3)(e)(iii.1)(B) of the Regulations is replaced by the following:

• (A.1) 10%, if the particular supply is made in Nova Scotia,
• (B) 10.8%, if the particular supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and

(36) Clause 19(3)(e)(v)(B) of the Regulations is replaced by the following:

• (A.1) 12.3%, if the particular supply is made in Nova Scotia,
• (B) 13%, if the particular supply is made in New Brunswick, Prince Edward Island or Newfoundland and Labrador, and

Automobile Operating Expense Benefit (GST/HST) Regulations

7 (1) Section 2 of the Automobile Operating Expense Benefit (GST/HST) Regulations ^{footnote 4} is amended by adding the following after paragraph (a):

• (a.1) 10% if
  • (i) the individual is an employee of the registrant and is required under subsection 6(1) of the Income Tax Act to so include the amount and the last establishment of the registrant at which the individual ordinarily worked, or to which the individual ordinarily reported, in the year in relation to that office or employment is located in Nova Scotia, or
  • (ii) the individual is a shareholder of the registrant, is required under subsection 15(1) of the Income Tax Act to so include the amount and the individual is resident in Nova Scotia at the end of the year;

(2) Subparagraphs 2(b)(i) and (ii) of the Regulations are replaced by the following:

• (i) the individual is an employee of the registrant and is required under subsection 6(1) of the Income Tax Act to so include the amount and the last establishment of the registrant at which the individual ordinarily worked, or to which the individual ordinarily reported, in the year in relation to that office or employment is located in New Brunswick, Prince Edward Island or Newfoundland and Labrador, or
• (ii) the individual is a shareholder of the registrant, is required under subsection 15(1) of the Income Tax Act to so include the amount and the individual is resident in New Brunswick, Prince Edward Island or Newfoundland and Labrador at the end of the year; and

Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations

8 Section 46 of the Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations ^{footnote 5} is amended by striking out “and” at the end of paragraph (i), by adding “and” at the end of paragraph (j) and by adding the following after paragraph (j):

• (k) if the particular reporting period includes April 1, 2025 and the participating province is Nova Scotia, the positive or negative amount determined by the formula

  (G₅₆ − G₅₇) × G₅₈ × (1%/G₅₉) × (G₆₀/G₆₁)

  where

  G₅₆

  is the total of the following amounts, each of which is determined for the particular reporting period and the participating province:

  • (i) the total A amounts,
  • (ii) the total for G₃ in paragraph (a), and
  • (iii) the total for G₇ in paragraph (b),

  G₅₇

  is the total of the following amounts, each of which is determined for the particular reporting period and the participating province:

  • (i) the total B amounts,
  • (ii) the total for G₂ in paragraph (a), and
  • (iii) the total for G₈ in paragraph (b),

  G₅₈

  is the specified percentage of the financial institution for the participating province and for the particular reporting period,

  G₅₉

  is the rate set out in subsection 165(1) of the Act,

  G₆₀

  is

  • (i) if the financial institution is a distributed investment plan, the total of all amounts, each of which is determined by the formula

    A × B

    where

    A

    is an amount of tax that became payable by the financial institution during the particular reporting period, or that was paid by the financial institution during the particular reporting period without having become payable,

    • (A) under any of subsection 165(1) and sections 212 and 218 of the Act in respect of a supply or importation of property or a service, or
    • (B) under section 218.01 of the Act for a particular specified year of the financial institution, and

    B is

    • (A) in the case of an amount of tax described in clause (A) of the description of A, the extent to which the property is delivered or made available, or the service is rendered, before April 1, 2025, and
    • (B) in the case of an amount of tax described in clause (B) of the description of A, the amount determined by the formula

    C/D

    where

    C

    is the number of days in the particular specified year before April 1, 2025, and

    D

    is the number of days in the particular specified year, and

  • (ii) in any other case, the number of days in the particular reporting period before April 1, 2025, and

  G₆₁

  is

  • (i) if the financial institution is a distributed investment plan, the total of all amounts, each of which is an amount of tax that became payable by the financial institution during the particular reporting period, or that was paid by the financial institution during the particular reporting period without having become payable, under any of subsection 165(1) and sections 212, 218 and 218.01 of the Act, and
  • (ii) in any other case, the number of days in the particular reporting period.

Nova Scotia HST Regulations, 2010

9 Section 2 of the Nova Scotia HST Regulations, 2010 ^{footnote 6} is amended by adding the following after subsection (2):

Non-application

(3) Subsections (1) and (2) do not apply if a prescribed rate for Nova Scotia or for the Nova Scotia offshore area is applicable under section 33.6 of the New Harmonized Value-added Tax System Regulations.

New Harmonized Value-added Tax System Regulations, No. 2

10 Subparagraphs 42(b)(i) to (v) of the New Harmonized Value-added Tax System Regulations, No. 2 ^{footnote 7} are replaced by the following:

• (i) the references in that subsection to “$472,500” are to be read as references to “$513,000”,
• (ii) the references in that subsection to “$367,500” are to be read as references to “$399,000”,
• (iii) the reference in that subsection to “$105,000” is to be read as a reference to “$114,000”,
• (iv) the reference in paragraph (h) of that subsection to “1.71%” is to be read as a reference to “the lesser of $6,300 and 1.58%”, and
• (v) the reference in the description of A in the formula in paragraph (i) of that subsection to “1.71%” is to be read as a reference to “1.58%”;

11 Subparagraphs 44(b)(i) to (v) of the Regulations are replaced by the following:

• (i) the references in that subsection to “$472,500” are to be read as references to “$513,000”,
• (ii) the references in that subsection to “$367,500” are to be read as references to “$399,000”,
• (iii) the reference in that subsection to “$105,000” is to be read as a reference to “$114,000”,
• (iv) the reference in paragraph (g) of that subsection to “1.71%” is to be read as a reference to “the lesser of $6,300 and 1.58%”, and
• (v) the reference in the description of A in the formula in paragraph (h) of that subsection to “1.71%” is to be read as a reference to “1.58%”;

Application and Coming into Force

12 Section 1 applies

• (a) to any supply made after March 2025;
• (b) for the purposes of calculating tax in respect of any supply (other than a supply by way of sale of real property) made before April 2025, but only in respect of the portion of the tax that becomes payable after March 2025 without having been paid before April 2025 or that is paid after March 2025 without having become payable;
• (c) to any supply (other than a supply deemed under Part IX of the Excise Tax Act to have been made) by way of sale of real property made before April 2025 if ownership and possession of the property are transferred to the recipient of the supply after March 2025;
• (d) to goods imported into Canada after March 2025;
• (e) to goods imported into Canada before April 2025 that are, after March 2025, accounted for under subsection 32(1), paragraph 32(2)(a) or subsection 32(5) of the Customs Act or released in the circumstances set out in paragraph 32(2)(b) of that Act;
• (f) to property brought into Nova Scotia or the Nova Scotia offshore area after March 2025;
• (g) to property that is brought into Nova Scotia or the Nova Scotia offshore area before April 2025 by a carrier if the property is delivered in Nova Scotia or in the Nova Scotia offshore area to a consignee after March 2025;
• (h) for the purpose of determining the tax rate for Nova Scotia in determining the amount for that province that, under subsection 225.2(2) of the Excise Tax Act, is required to be added to, or may be deducted from, the net tax for a reporting period of a financial institution that ends after March 2025;
• (i) for the purposes of determining the value of E₄ in subsection 7(7) of the Games of Chance (GST/HST) Regulations for any reporting period that ends on or after February 28, 2026, except that in respect of a reporting period that includes February 28, 2026, clause (A) of that E₄ is to be read as follows:
  • (A) if the benefit amount is required to be included under paragraph 6(1)(a) or (e) of the Income Tax Act and the last establishment at which the individual ordinarily worked, or to which the individual ordinarily reported, in the previous calendar year in relation to the individual’s office or employment with the authority is located in a participating province,
    • (I) if the participating province is Nova Scotia, 13.25%, and
    • (II) in any other case, the total of 4% and the tax rate for the participating province, and
• (j) for the purposes of determining or calculating any of the following if none of paragraphs (a) to (i) applies:
  • (i) tax in respect of Nova Scotia or the Nova Scotia offshore area after March 2025,
  • (ii) tax that is not payable in respect of Nova Scotia or the Nova Scotia offshore area, but that would have been payable after March 2025 in the absence of certain circumstances described in Part IX of the Excise Tax Act, or
  • (iii) an amount or number, at any time after March 2025, by or in accordance with an algebraic formula that makes reference to the tax rate for a participating province if the amount or number is to be determined or calculated in respect of Nova Scotia or the Nova Scotia offshore area.

13 Despite section 12, section 1 does not apply to a supply of funeral services (as defined in subsection 344(1) of the Excise Tax Act) under an arrangement to supply funeral services in respect of an individual if

• (a) in circumstances where, under the terms of the arrangement, the funds required to pay for the funeral services are held by a trustee and the trustee is responsible for acquiring funeral services in respect of the individual,
  • (i) the arrangement is entered into in writing at any time before July 2010, and
  • (ii) at that time, it is reasonable to expect that all or a part of those funds will be advanced to the trustee before the individual’s death; and
• (b) in any other case,
  • (i) the arrangement is entered into in writing at any time before July 2010, and
  • (ii) at that time, it is reasonable to expect that all or a part of the consideration for the supply of the funeral services will be paid before the individual’s death.

14 Sections 2, 8 and 9 are deemed to have come into force on December 20, 2024.

15 Section 3 applies in respect of any reporting period of a provincial gaming authority that ends on or after February 28, 2026, except that in respect of the reporting period of the provincial gaming authority that includes February 28, 2026, subclause (i)(A)(II) of the description of E₃ in subsection 7(7) of the Games of Chance (GST/HST) Regulations is to be read as follows:

• (II) Nova Scotia, 10.25%, or

16 Section 4 applies for the purpose of determining the net tax of a registrant for reporting periods ending after March 2025, except that the quick-method rate of the registrant for the reporting period of the registrant that includes April 1, 2025 and that applies in respect of a supply is, in respect of consideration for the supply that is paid or becomes due before April 2025, the quick-method rate of the registrant for that reporting period that would apply if that section had not come into force.

17 Section 5 applies for the purpose of determining the net tax of a registrant for reporting periods ending after March 2025, other than in respect of the portion of the registrant’s net specified supplies (as described in subsection 15(5.1) of the Streamlined Accounting (GST/HST) Regulations) for the reporting period of the registrant that includes April 1, 2025 that is attributable to supplies that are made before April 2025 through a permanent establishment of the registrant in Nova Scotia.

18 Section 6 applies for the purpose of determining the net tax of a registrant for reporting periods ending after March 2025, except that the special quick-method rate of the registrant for the reporting period of the registrant that includes April 1, 2025 and that applies in respect of a supply is, in respect of consideration for the supply that is paid or becomes due before April 2025, the special quick-method rate of the registrant for that reporting period that would apply if that section had not come into force.

19 Section 7 applies to amounts that are required to be included in computing an individual’s income for the purposes of the Income Tax Act for the 2025 and subsequent taxation years except that, in respect of the 2025 taxation year, the reference in paragraph 2(a.1) of the Automobile Operating Expense Benefit (GST/HST) Regulations to “10%” is to be read as a reference to “10.25%”.

20 Section 10 applies for the purposes of determining a rebate in respect of a supply to a particular individual referred to in subsection 254.1(2) of the Excise Tax Act of a building, or part of it, in which a residential unit forming part of a residential complex is situated if the supply of the complex referred to in paragraph 254.1(2)(d) of that Act is deemed under section 191 of that Act to have been made after March 2025.

21 Section 11 applies for the purposes of determining a rebate in respect of a supply, by a cooperative housing corporation to a particular individual, of a share of the capital stock of the corporation acquired by the particular individual for the purpose of using a residential unit in a residential complex as the primary place of residence of the particular individual or a relation (as defined in subsection 255(1) of the Excise Tax Act) of the particular individual if the corporation paid tax under subsection 165(2) of that Act at a rate of 9% in respect of a taxable supply of the residential complex to the corporation.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

On October 23, 2024, the Government of Nova Scotia announced its intention to decrease the rate of the provincial component of the Harmonized Sales Tax (HST) from 10 per cent to 9 per cent, effective April 1, 2025. Amendments to existing Goods and Services Tax/Harmonized Sales Tax (GST/HST) regulations are required to implement this decision of Nova Scotia.

Background

The HST is levied in participating provinces under federal legislation and administration. The Comprehensive Integrated Tax Coordination Agreements (CITCAs) between the Government of Canada and each of the participating provinces set out the parameters that govern the imposition of the HST in those provinces. Under the CITCAs, each participating province may exercise some flexibility in certain areas covered by the agreement, such as establishing the rate of its provincial component of the HST. Under the Provincial Choice Tax Framework Act, Parliament approved that regulations would serve as the mechanism to facilitate a change in the provincial component of the HST.

As a result of Nova Scotia’s decision, when combined with the 5 per cent federal component, the HST rate for Nova Scotia will decrease to 14 per cent from the current rate of 15 per cent. In order to facilitate the implementation of this rate decrease, transitional rules were announced in the form of a detailed notice by the Government of Nova Scotia on December 20, 2024. These rules specify the tax rate applicable to transactions that straddle the implementation date of April 1, 2025.

Objective

The objective is to formalize and give legal effect to the decision of Nova Scotia to decrease the rate of its provincial component of the HST.

Description

The Regulations Amending Various GST/HST Regulations, No. 14 (Nova Scotia) [the “Regulations”] amend existing GST/HST regulations made under the Excise Tax Act. The Regulations amend the following regulations:

• New Harmonized Value-added Tax System Regulations. These regulations contain various rules that relate to the HST. Amendments to these regulations include:
  • Change in Rate from 10 per cent to 9 per cent. These regulations are amended to prescribe the provincial component of the tax rate of the HST for Nova Scotia at 9 per cent.
  • General Transitional Rules. These regulations contain various rules that relate to the HST, including some of the transitional rules related to the previous implementation of the HST in certain harmonized provinces. These regulations are amended to add transitional rules for the implementation of the HST rate decrease in Nova Scotia as announced by the province on December 20, 2024. These rules specify the tax rate that should be applied for transactions that straddle the April 1, 2025 implementation date. Generally, the rate of tax that applies would be based on the time at which the HST in respect of a transaction becomes payable (e.g. the previous rate would apply if HST becomes payable before April 1, 2025 and the new rate would apply if HST becomes payable on or after April 1, 2025). The GST/HST legislation contains rules that set out when GST/HST becomes payable.
  • Real Property Transitional Rules. These amendments specify what rate of HST applies to real property transactions that straddle the implementation date of April 1, 2025. The transitional rules provide that the new 14 per cent HST rate generally applies to a supply of real property by way of sale (including sales of newly constructed or substantially renovated housing) if both ownership and possession of the property are transferred to the purchaser on or after April 1, 2025, but the existing HST rate of 15 per cent would apply if either ownership or possession of the property is transferred to the purchaser before April 1, 2025.
• New Harmonized Value-added Tax System Regulations, No. 2. These regulations are amended consequential to the HST rate change in Nova Scotia. In particular, the amounts and rates specified in these regulations for certain calculations related to the federal GST new housing rebates are amended to reflect the provincial component of the HST for Nova Scotia being decreased from 10 per cent to 9 per cent. The existing GST new housing rebate for the purchase of a share of a cooperative housing corporation is based on a GST/HST-inclusive amount that generally reflects the fact that the share is not subject to GST/HST, but the cooperative housing corporation would have paid GST/HST on the property. The applicable GST/HST-inclusive amount is based on the province in which the property is located. Similarly, the GST new housing rebate for homes on leased land is similarly determined based on a GST/HST-inclusive amount as the purchaser would not be paying GST/HST on the purchase, but GST/HST would have applied earlier in the chain and would be embedded in the price paid.
• Nova Scotia HST Regulations, 2010. These regulations, which implemented the former 10 per cent rate of the Nova Scotia component of the HST, are amended consequential to the HST rate change in Nova Scotia. The amendment ensures that the former 10 per cent rate of the Nova Scotia component of the HST is properly overridden by the new 9 per cent rate, in conformity with the transitional rules in respect of that new rate. The transitional rules set out in the amendments to the New Harmonized Value-added Tax System Regulations described above result in the application of the new 9 per cent rate, and this amendment provides that the former 10 per cent rate is inapplicable.
• Automobile Operating Expense Benefit (GST/HST) Regulations. These regulations prescribe the rates of GST and HST applicable to the value of an automobile operating expense benefit, which is the personal portion of automobile operating expenses paid by employers or corporations, reported as income for income tax purposes by an employee or shareholder. The GST or HST is applicable to the benefit and the employer or corporation must account for and remit the GST/HST at a prescribed rate. The regulations are amended to account for the HST rate decrease in Nova Scotia.
• Streamlined Accounting (GST/HST) Regulations. Certain optional streamlined accounting methods exist under the GST/HST legislation. Such accounting methods permit certain taxpayers to multiply eligible GST/HST-included sales by a specified percentage and remit that amount to the government in lieu of tracking and claiming input tax credits for most of the tax they pay. The amendments to these regulations set out revised specified percentages that are required for those methods as a result of the implementation of the HST rate decrease in Nova Scotia. The amendments also make minor housekeeping corrections to these regulations. These corrections include, for example, deleting an obsolete reference to a province from a list in one provision where, as a result of previously made amendments, the relevant specified percentage in respect of the province is now set out in a different provision.
• Games of Chance (GST/HST) Regulations. Special rules are used to determine the net tax of prescribed provincial gaming authorities. Similar to the general GST/HST rules, these special rules take into account GST/HST applicable to the value of an automobile operating expense benefit, which is the personal portion of automobile operating expenses paid by employers or corporations, reported as income for income tax purposes by an employee or shareholder. These regulations are amended so that the GST/HST remittances of provincial gaming authorities take into account the change in the automobile operating expense benefit rates consequential to the HST rate decrease in Nova Scotia, in particular by updating cross references to provisions of the Automobile Operating Expense Benefit (GST/HST) Regulations described above.
• Selected Listed Financial Institution Attribution Method (GST/HST) Regulations. These regulations define which financial institutions are selected listed financial institutions (SLFIs) and set out special rules by which SLFIs calculate the amount of the provincial component of the HST remittable by them, or refundable to them, for each of their reporting periods. Generally, SLFIs are financial institutions that operate in an HST-participating province and in at least one other province. These regulations are amended to implement transitional rules to adjust the calculation in relation to the HST rate decrease in Nova Scotia. The transitional rules provide for an apportionment of the amount of the HST for reporting periods that straddle April 1, 2025 based on the number of days in the reporting period before and after the date in question (or based on the amount of the federal component of the HST payable before and after that date, in the case of certain investment plans).

Regulatory development

Consultation

The Regulations implement the decision of Nova Scotia to decrease the rate of the provincial component of the HST announced by the province on October 23, 2024. The Regulations also set out the transitional rules, which were developed in consultation with the Government of Nova Scotia and announced by the province on December 20, 2024.

The Regulations were exempted from the requirement to prepublish regulations in the Canada Gazette, Part I, because they are implementing a matter of provincial tax policy which has already been announced by the Government of Nova Scotia.

Modern treaty obligations and Indigenous engagement and consultation

No impacts have been identified in respect of the government’s obligations in relation to Indigenous rights protected by section 35 of the Constitution Act, 1982, modern treaties or international human rights obligations.

Instrument choice

Under the Excise Tax Act, the Governor in Council has the authority to make regulations related to the application of the GST/HST. The Regulations are a necessary and appropriate mechanism for Canada to fulfill its obligations under the CITCA to implement Nova Scotia’s desired tax changes. Therefore, no other instruments were considered.

Regulatory analysis

Benefits and costs

The Regulations formalize and give legal effect to the decision by Nova Scotia to decrease the provincial component of the HST from 10 per cent to 9 per cent, effective April 1, 2025. As the proposal relates to an exercise of provincial tax policy flexibility under the Canada-Nova Scotia CITCA, any potential benefits and costs of the rate change is attributable to Nova Scotia. The Regulations are necessary for Canada to fulfill its obligations under the CITCA.

Small business lens

The measure is a decision of the provincial government and not within the scope of analysis of the small business lens.

One-for-one rule

The one-for-one rule does not apply to this proposal as it relates to the provincial component of the HST. The measure is a decision of the provincial government and not within the scope of the one-for-one rule.

Regulatory cooperation and alignment

Nova Scotia’s decrease of the provincial component of the HST is a tax policy decision of the province under the Canada-Nova Scotia CITCA, and therefore there is no associated regulatory cooperation component. The Regulations are necessary for Canada to fulfill its obligations under the CITCA to implement the province’s desired tax changes to which it is entitled under the CITCA.

Effects on the environment

Nova Scotia’s decrease of the provincial component of the HST is a tax policy decision of the province and not the federal government. Any environmental impacts associated with this measure would be attributable solely to provincial policy decisions and not to changes made to the GST/HST regulations.

Gender-based analysis plus

Nova Scotia’s decrease of the provincial component of the HST is a tax policy decision of the province and not the federal government. Any gender-based analysis plus (GBA+) impacts associated with this measure would be attributable solely to provincial policy decisions and not to changes made to the GST/HST regulations.

Implementation, compliance and enforcement, and service standards

Implementation

The Regulations will be administered by the CRA and CBSA and come into force on April 1, 2025. The CRA and CBSA will update their guidance and be ready to administer these changes.

Contact

Dominic DiFruscio
Director
General Operations and Border Issues
Sales Tax Division
Department of Finance
90 Elgin Street
Ottawa, Ontario
K1A 0G5