Canada introduced its federal Goods and Services Tax, or GST, in 1991.
The GST took effect on January 1, 1991, replacing the federal manufacturers’ sales tax. It was introduced under Prime Minister Brian Mulroney’s Progressive Conservative government as a broad consumption tax applied at multiple stages of production and distribution.
The original federal rate was 7%. The tax became politically controversial, partly because consumers could see it more clearly than the manufacturers’ sales tax it replaced. The federal rate was later reduced, and some provinces combined their own sales taxes with the GST to create harmonized sales taxes.