How is cryptocurrency taxed in Ontario?

The CRA treats cryptocurrency as a commodity for income tax purposes, not as currency. This means gains and losses from buying and selling crypto are generally capital gains or losses — not currency gains — and are subject to the same inclusion-rate rules as other capital property. Ontario residents pay federal and Ontario provincial tax on the included portion of any gain.

However, if you trade crypto frequently enough that the CRA considers your activity a business rather than investing, your profits may be fully taxable as business income, with no capital gains treatment. The CRA looks at factors like trading frequency, intent, and whether crypto activities are your primary occupation. This is a meaningful distinction because business income is 100% included in income, while capital gains are only partly included.

Every time you dispose of cryptocurrency — including selling it for dollars, exchanging one crypto for another, or using crypto to pay for goods and services — you trigger a taxable event. You must track the adjusted cost base (ACB) of each coin or token and calculate the gain or loss on each transaction. With high volumes of transactions, record-keeping is burdensome. The CRA has been increasing its focus on crypto reporting, and failure to report is not acceptable even if a tax slip was not issued. Specialized crypto tax software or a tax professional can help manage accurate reporting.