GST, HST and PST on PPC management fees across Canadian provinces

What to take away

Place-of-supply rules that decide which tax applies to PPC management fees

The Canada Revenue Agency place-of-supply rules decide which tax applies to a PPC management fee. For services, the general rule looks at the recipient's address, not the agency's office. If your client is a business in Ontario and you bill from Calgary, the invoice carries Ontario HST.

That single rule explains most disputes between agencies and their accountants. Two clients on the same rate card can receive invoices with different tax lines because they sit in different provinces. Build the tax decision into your onboarding form, not into month-end cleanup.

The CRA sets out the basics of TPS/TVH for businesses in French, and the same rules govern when tax applies to advertising services. Read them before you design a billing template.

The two streams the CRA uses

The CRA splits supplies into personal property, services and intangible personal property. Advertising services fall under services. The place of supply is generally where the client's business is located, or where the client's permanent establishment that commissioned the work sits.

For a Quebec client billed by a Toronto agency, the supply happens in Quebec. QST applies at the Quebec rate, and the agency must register with Revenu Quebec once it exceeds the threshold there. That is a separate registration from the federal one.

When the client is a consumer

A consumer with no business address is taxed where the service is performed or where the consumer's address sits, depending on the type of supply. Most PPC clients are businesses, so the business-address test governs. Document the client's province at signing and keep the evidence.

If a client moves provinces mid-engagement, the tax on future invoices changes from the date of the move. Reissue nothing retroactively. Note the new address in your billing system and move on.

Zero-rated and exempt supplies

Advertising services are taxable, not zero-rated or exempt. There is no exemption for digital marketing, PPC management or media buying in Canada. If a supplier tells you otherwise, ask for the section of the Act they are relying on.

Cross-border supplies sit elsewhere. A US client with no Canadian presence is generally outside the scope of GST/HST, which is why export treatment matters for agencies with foreign clients. That is a different analysis from domestic provincial tax.

Which provinces charge HST and which charge GST plus PST

Five jurisdictions charge HST: Ontario at 13 percent, Nova Scotia at 15 percent, New Brunswick at 15 percent, Newfoundland and Labrador at 15 percent, and Prince Edward Island at 15 percent. Nova Scotia's rate drops to 14 percent on April 1, 2025. 975 percent QST, a separate tax that behaves like HST in practice.

The three territories and Alberta charge 5 percent GST only.

British Columbia, Saskatchewan and Manitoba charge GST plus a separate provincial sales tax, at 7 percent PST in BC, 6 percent in Saskatchewan and 7 percent in Manitoba. PST is not a value-added tax. It is collected by the province, and it generally does not generate an input tax credit the way GST does.

In BC, Saskatchewan and Manitoba, PST on your management fee is a real cost to the client, not a wash. A client comparing a Vancouver agency with a Toronto agency may see a lower headline rate in Toronto and a higher cash cost in Vancouver once PST is added.

That is a sales conversation, not a billing detail. If you are building a rate card, read how line items are structured in common paid media strategy questions and price the tax conversation into the proposal.

Provincial rates change, so check the rate before every invoice run rather than trusting a template from three years ago. The rate lookup section below covers where to find the current combined rate.

Invoicing ad spend versus management fees as separate lines

Google and Meta charge GST/HST to Canadian advertisers on ad spend. If you pay the platform on the client's behalf and rebill it, you are handling a taxable supply and a reimbursement in one invoice. Keep the two apart.

The management fee is your supply of services. The ad spend is a pass-through of a cost the platform charged you. Mixing them into one lump sum makes the tax treatment impossible to audit and hard for the client's bookkeeper to reconcile.

A worked example

A Toronto agency manages a $20,000 monthly ad budget for a client in Halifax. The platform charges the agency HST on the ad spend. The agency rebills the ad spend plus a $3,000 management fee.

The client sees two lines, two tax amounts on the same rate, and a clean audit trail. If you want the platform side of this in more detail, the guide to claiming GST/HST on Google Ads walks through the platform invoice and the credit.

Pass-through versus principal

Some agencies buy media as principal, meaning they resell ad space. Others act as agent and simply recover a cost. The distinction changes what appears on the invoice and what your revenue line reports. Pick one treatment and apply it to every client.

If you are still deciding how to present the arrangement to clients, the guide to paid media attribution covers the disclosure points a buyer will raise. Answer them in the proposal rather than at the first invoice.

Currency and platform billing

Google and Meta bill Canadian advertisers in Canadian dollars for Canadian-targeted campaigns, and in US dollars for some cross-border accounts. A US-dollar platform invoice still carries Canadian GST/HST when the advertiser is in Canada. Convert at the rate you recorded, and keep the platform invoice attached.

GST/HST registration thresholds for Canadian PPC agencies

The small supplier threshold is $30,000 in taxable revenue over four consecutive calendar quarters. Once you cross it, you must register and start charging GST/HST. The threshold applies to your worldwide taxable revenue, not just Canadian clients.

Registration is not optional once you cross. You can register voluntarily before that, which lets you claim input tax credits on platform charges and software. For an agency paying HST on five-figure monthly ad spend, voluntary registration usually pays for itself quickly.

Counting revenue correctly

Revenue for the threshold includes management fees and any media you resell as principal. Pure reimbursements of ad spend you paid as an agent may sit outside the count, depending on how you structure them. This is the single most common place agencies get the count wrong.

Review the count quarterly. A single large client can push you over the line in one quarter, and the obligation starts on the next supply you make, not at year end. The CRA explains when to register for and start charging the GST/HST in plain terms.

Separate Quebec registration

Revenu Quebec administers QST and has its own registration threshold, currently aligned at $30,000. A federal GST/HST number does not cover QST. If you have Quebec clients, register there separately or you will be billing the wrong tax to a whole province.

What registration changes for clients

Once registered, your invoices carry tax and your clients can claim input tax credits if they are registrants. Unregistered agencies cannot charge tax, which means business clients lose a credit they would otherwise get. That is a real cost to them, not a saving.

Rebates and input tax credits on cross-border ad services

Input tax credits let a registrant recover GST/HST paid on inputs used to make taxable supplies. Platform charges for Canadian campaigns qualify. Software subscriptions, contractor fees and office costs generally qualify too, subject to the usual restrictions.

For a PPC agency, the largest input tax credit is usually the tax on ad spend. That credit is the reason voluntary registration makes sense before the threshold. Without registration, the tax you pay the platform is a permanent cost.

Rebates for non-residents and exempt bodies

The CRA rebate program covers situations where tax was paid but no input tax credit is available. Non-resident businesses, municipalities and certain exempt organizations use it. A Canadian agency with a foreign parent may have a rebate claim on Canadian tax it paid for supplies used outside Canada.

The rebate rules are narrow and time-limited. Read the CRA guidance on claiming a GST/HST rebate before you assume a claim exists. Most agencies never need it, but cross-border structures do.

Documentation the CRA expects

Keep the platform invoice, the proof of payment, and a note tying the charge to a specific client campaign. If you claim a credit on ad spend, you should be able to show which client it served and that you charged tax on the rebill. Spreadsheets are fine if they reconcile.

Timing of credits

Claim credits in the reporting period you paid the tax, or in a later period within the time limit. Do not claim tax you have not yet paid. A platform invoice dated the last day of a quarter and paid the next month belongs in the later period.

Provincial rate lookup for Ontario, Quebec, BC, Alberta and the territories

Rates change, so look them up rather than memorising them. The CRA maintains an official GST/HST calculator that returns the combined rate for a province and a date. Use it before you finalise a template.

When a client disputes a rate, send them the calculator link and the province code you have on file. Most finance teams will confirm the rate themselves and stop disputing the invoice. The argument is almost never about the rate, it is about whether the agency applied the right province.

Ontario charges 13 percent HST. Quebec charges 5 percent GST plus 9.975 percent QST. British Columbia charges 5 percent GST plus 7 percent PST. Alberta charges 5 percent GST only. Yukon, the Northwest Territories and Nunavut charge 5 percent GST only, with no territorial sales tax on services.

Building the lookup into your billing stack

Store the province code on the client record, not on the invoice template. When the client moves or the rate changes, one field updates and every future invoice follows. Agencies that hard-code a rate into a template are the ones who discover the error at year end.

If you are comparing what other agencies put on an invoice, the breakdown of paid media strategy development shows how line items are typically named. Use it to align your own labels with what clients expect to see.

A quick reference for the five named jurisdictions

Common invoicing errors that trigger CRA reassessment

Most reassessments in this niche come from a small set of repeat mistakes. None of them are exotic. They are the result of a template that was never updated after the first client.

What reassessment looks like

The CRA can assess tax you failed to charge, plus interest and penalties. Because the error usually repeats across every invoice to a client, the exposure scales with the length of the relationship. A two-year client billed at the wrong provincial rate is a two-year problem.

Fixing past invoices

If you find an error, correct future invoices first and then work out the historical exposure with your accountant. Do not quietly issue a credit note without advice. The treatment depends on whether the client could have claimed the tax as a credit.

Keep the platform invoice, the client address evidence and the rate you applied with each billing run. A reviewer who asks why a Halifax client got Nova Scotia HST from a Calgary agency should find the answer in that file.

Common questions