- Most banking, lending, and insurance services — think mortgage and loan arrangements, most deposit accounts, and insurance premiums — are exempt from HST.
- Most services provided by licensed health care practitioners for medically necessary reasons are exempt — this generally includes core physician and dental services and many services…
- Tuition and instruction provided by schools, universities, colleges, and many vocational and language-training programs is generally exempt.
Most day-to-day purchases in Ontario include HST. But a specific set of goods and services fall outside the HST system entirely under the Excise Tax Act, meaning no tax is added, and the seller can't recover the HST it paid on the inputs behind that sale either. This article walks through the main categories, and flags a few common goods that are treated differently than most people expect.
Financial Services
Most banking, lending, and insurance services — think mortgage and loan arrangements, most deposit accounts, and insurance premiums — are exempt from HST. This is one of the largest exempt categories in the economy, and it reflects a broader design choice: value-added tax systems generally struggle to apply cleanly to margin-based financial products.
Health Care Services
Most services provided by licensed health care practitioners for medically necessary reasons are exempt — this generally includes core physician and dental services and many services from other regulated health professionals. Cosmetic procedures that aren't for a medical or reconstructive purpose are treated differently and are generally taxable, which surprises some patients and providers.
Educational Services
Tuition and instruction provided by schools, universities, colleges, and many vocational and language-training programs is generally exempt.
Residential Rent
Long-term residential rent — the kind most tenants pay their landlord — is generally exempt from HST. This is different from short-term accommodation, like a hotel stay, and from commercial rent, both of which are typically taxable.
Child Care, Legal Aid, and Public-Sector Supplies
Licensed child care services, some legal aid services, and a range of supplies made by governments, municipalities, and certain public-sector and charitable bodies also fall outside the HST system, reflecting their public or community character.
Exempt Is Not the Same as Zero-Rated
It's worth being precise here: some goods most people assume are "HST-exempt" — like basic groceries and prescription drugs — are technically zero-rated, not exempt. Both mean the customer pays no HST, but the legal category is different, and it changes whether the seller can recover HST paid on its own inputs. If you're a business owner in one of these sectors, that distinction has real financial consequences, not just semantic ones.
Why This List Isn't Exhaustive
The Excise Tax Act's exemption schedules are detailed and sector-specific, and the boundary between exempt and taxable within a single industry — health care and financial services especially — can be more technical than a general list suggests. If your business sits near one of these lines, don't assume; confirm the treatment of your specific goods or services.
Frequently asked questions
Is commercial rent HST-exempt like residential rent?
No. Commercial rent — a landlord leasing space to a business tenant — is generally taxable, unlike long-term residential rent. Don't assume the residential rule applies to a commercial lease.
Are all financial services exempt, including investment advice?
Not necessarily. Core lending, deposit-taking, and insurance services are generally exempt, but some fee-based components — like a standalone financial planning or advisory fee — can be taxable even within a financial services business. The line can be technical.
If a service is exempt, does the provider still need to register for HST?
Not for that exempt activity — exempt supplies don't count toward the registration threshold the way taxable supplies do. A provider with only exempt supplies generally has no obligation to register.
Why does it matter to me as a consumer whether something is exempt or zero-rated?
As a customer, it doesn't change what you pay — no HST either way. It matters much more to the business selling to you, since it affects whether that business can recover the HST it paid on its own costs.
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