GST/HST Reporting Requirements

Application of GST/HST by Load Brokers Specific to the Brokerage Industry

It is the NTBA position that Carrier invoices to Load Brokers are zero-rated for GST/HST purposes when providing a freight transportation service.

Definition of Carrier

A carrier is defined as follows:

  • Subsection 123(1) defines “carrier” to mean a person who supplies a freight transportation service within the meaning of freight transportation service assigned by subsection 1(1) of Part VII of Schedule VI to the Act;
  • A person is not required to perform a freight transportation service in order to be considered a carrier; the person need only assume liability as a supplier of a freight transportation service;
  • There is no definition of liability. The link to the “freight transportation services” published by the Canada Revenue Agency appears at the end of this section;
  • Since the inception of the GST by the Canadian government, it has been the NTBA’s position that invoicing between Load Brokers and Carriers is zero-rated. Clearly, on international shipments, the supply of services by Carriers to Load Brokers is zero-rated, and the Load Broker’s invoice to their customer is also zero-rated;
  • There exists differing opinions as to whether on a domestic shipment, the supply of a freight transportation service by a Carrier to a Load Broker is zero-rated. The legislation reads at Section 44:

“44. Several carriers may participate in the supply of a freight transportation service in the course of a continuous freight movement from the origin of the freight movement to its destination, where only one carrier invoices the shipper or consignee. Where this occurs, the carriers participating in the movement are considered to be interlining. The process of interlining is a common practice within the freight transportation industry and is subject to special treatment for GST/HST purposes.”

The NTBA interpretation is that the relationship between the Carrier and the Load Broker on a domestic shipment is zero-rated pursuant to the interlining interpretation found in the aforementioned clause.

When the Load Broker invoices the shipper or the consignee on a domestic move, GST/HST must be applied, and it is based on the province’s tax rates in which final delivery occurred.

Rates for domestic shipments where the final delivery is in:

  • 5% (GST) in Alberta, British Columbia, Manitoba, Northwest Territories, Nunavut, Quebec*, Saskatchewan, and Yukon;
  • 13% (HST) in Ontario;
  • 15% (HST) in New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island.

*If the origin and destination are both located in Quebec, the provincial QST of 9.975% and the GST of 5% are separately applied to the total freight charge including any accessorial charges.