Freight Transportation Services
Freight and passenger transportation services (other than municipal transportation services) supplied in Canada are subject to GST (and QST, if supplied in Québec).
Even where freight transportation services are supplied in part outside Canada (outside Québec, for QST purposes), the supply is considered to be made in Canada (in Québec, for QST purposes) if both the origin and destination of the freight are in Canada (in Québec, for QST purposes). Such services are therefore subject to GST if the destination is in Québec or another non-participating province, and to HST if the destination is in a participating province (see the note below).
If both the origin and the destination of the freight are in Québec, the service is also subject to QST, provided the service is not part of a continuous freight movement to a place outside Québec or from a place outside Canada.
For QST purposes, where corporeal movable property (also called “tangible personal property”) is transported from a place in Canada outside Québec to a place in Québec, the transportation service is deemed to have been supplied outside Québec. A person resident in Québec that acquires such a service must calculate and remit QST, unless the service is acquired for use exclusively in the person's commercial activities. However, international freight transportation services are zero-rated under both the GST and QST systems.
To find out what the applicable HST rate is in each of the participating provinces, see HST Rates.