Introduction

Updated: November 20, 2025. This explainer focuses on taxes that appear on a customer’s invoice for Commercial General Liability (CGL) insurance across Canadian provinces and territories, excluding Quebec. For CGL coverage fundamentals, see Summit’s Commercial General Liability (CGL) Insurance.

Key points up front:

• CGL premiums are generally exempt from GST/HST (insurance is treated as a financial service). Provincial retail sales tax on insurance, where applicable, is separate from GST/HST and is not creditable.

• Only some provinces add a customer‑paid provincial tax on insurance premiums. Others levy “premium taxes” on insurers (embedded in pricing, not shown as a line item to the policyholder).

• Quebec is excluded from this explainer and from Summit’s service area.

How CGL is taxed on the invoice

• GST/HST on premium: Not charged (insurance is a financial service exemption). Some non‑premium fees (e.g., risk consulting, certain admin fees) may be subject to GST/HST if invoiced separately by a vendor for a taxable service.

• Provincial RST/PST on premium: Charged only in certain provinces (rates below). Where charged, the tax applies to the premium (and typically to certain insurer/broker charges directly connected to the policy premium), and it is not an input tax credit.

• Insurer premium taxes vs. consumer taxes: Many provinces charge a separate “insurance premium tax” to insurers. That tax is paid by insurers, not shown as a separate line item on your invoice, and is different from RST/PST charged to policyholders.

Province‑by‑province applicability and rates (CGL)

The table below shows whether a customer‑paid provincial tax applies to CGL premiums and at what rate. It excludes Quebec by design.

Worked examples: $1,000 CGL premium (no GST/HST on premium)

• British Columbia (licensed insurer): $1,000 + 0% = $1,000 total. Note: If placed with an unlicensed/non‑resident insurer and BC’s insured tax applies, $1,000 × 7% = $70 tax; total $1,070.

• Alberta: $1,000 + 0% = $1,000 total.

• Saskatchewan: $1,000 × 6% = $60 tax; total $1,060.

• Manitoba: $1,000 × 7% = $70 tax; total $1,070.

• Ontario: $1,000 × 8% = $80 tax; total $1,080.

• New Brunswick: $1,000 + 0% = $1,000 total.

• Nova Scotia: $1,000 + 0% = $1,000 total.

• Prince Edward Island: $1,000 + 0% = $1,000 total.

• Newfoundland & Labrador: $1,000 × 15% = $150 tax; total $1,150.

• Yukon: $1,000 + 0% = $1,000 total.

• Northwest Territories: $1,000 + 0% = $1,000 total.

• Nunavut: $1,000 + 0% = $1,000 total.

Notes on the example:

• The figures above illustrate tax on premium only. If your invoice includes separately billed taxable services (e.g., certain consulting or administrative fees), GST/HST may apply to those specific fees per CRA rules.

• Where a province requires self‑assessment (e.g., if tax was not charged at source), the insured may be responsible for remittance under that province’s rules.

Edge cases and compliance nuances

• Unlicensed/non‑resident placements: In addition to any provincial charges (e.g., BC’s 7% insured tax on unlicensed placements), federal excise tax of 10% can apply to insurance premiums paid to non‑resident insurers, unless an exemption is granted. This is separate from provincial RST/PST and from insurer premium taxes.

• Newfoundland & Labrador scope: The province eliminated RST on home insurance, but business insurance premiums remain within scope of the 15% RST unless specifically exempted (e.g., life, accident & sickness, automobile, certain marine).

• Documentation and disclosure: Provinces that levy RST/PST on insurance generally require the tax to be shown or determinable on the invoice, with collection/remittance obligations on the party billing the premium (insurer or its agent/broker), and self‑assessment rules when tax is not charged.

Practical next steps

• Include the correct provincial code in your accounting system so RST/PST on insurance is applied only where required.

• Treat provincial RST/PST on insurance as a cost (non‑recoverable) for accounting/tax purposes.

• If your risks span multiple locations, apportion premiums and taxes by province according to policy territoriality and the provincial rules.

• For coverage design or to confirm invoice tax treatment, contact your Summit account manager via the CGL hub linked above.

References (by jurisdiction; selected)

• Canada (GST/HST): CRA guidance indicating the issuance of insurance is an exempt financial service; professional summaries clarifying when intermediary services are taxable vs. exempt.

• British Columbia: Insurance Premium Tax Act (tax to insured at 7% for unlicensed placements; insurer premium tax generally 4–4.4%); BC Finance guidance for licensed vs. unlicensed insurance.

• Saskatchewan: Provincial Sales Tax (6%); 2017 government notices and subsequent updates confirming PST application to most P&C premiums (with specific exemptions for life/health classes).

• Manitoba: Retail Sales Tax Act provisions imposing 7% RST on taxable insurance premiums (including liability); Finance bulletins clarifying scope and exemptions.

• Ontario: Ministry of Finance “Insurance and Benefits Plans” (RST at 8% on taxable insurance premiums; GST/HST not applicable to the premium itself).

• Newfoundland & Labrador: Department of Finance RST on Insurance Premiums FAQ (15% on taxable insurance premiums; specified exemptions) and government announcements eliminating RST on home insurance only.

• New Brunswick, Nova Scotia, Prince Edward Island, Territories: Statutes and finance pages describing insurer‑paid premium taxes (customer‑paid RST/PST on insurance not levied).