All Three Categories In One Building

Walk from the shampoo aisle to the dispensary counter to the private consultation room. Three rooms, one business number, and on the way you have crossed every classification the Excise Tax Act contains.

A Note On Currency

Everything here is stated as verified in August 2026 and requires confirmation before reliance.

Our sources conflict on the treatment of dispensing fees, and the conflict is material because it changes input tax credit entitlement. We set it out in its own section and do not resolve it.

We did not read Schedule VI or Schedule V directly and take their content from CRA rulings, a CRA notice and commentary.

The CRA rulings we rely on date from 2009 and 2019 and were given to other taxpayers on their own facts. The naloxone notice dates from April 2017 and describes a proposed amendment.

One source's revenue categorisation and its estimate of recoverable amounts come from a firm marketing its services to pharmacy owners[5], which we identify as such.

We did not research provincial drug benefit programmes, the medical expense tax credit, or the rebate mechanisms available to some health care operators.

This is not tax advice.

Closing A Gap We Left Open

A note on why this article exists.

Our article on the medical and dental exemption recorded, in its limits, that it did not address the treatment of drugs and pharmaceuticals. That was accurate, and it left a hole in the middle of the health care sector.

This is the fifth time in this series that a limits section has flagged a subject and a later article has picked it up.

The two are adjacent but not the same, and this is our own observation.

The medical exemption question is about services, and its answer is exemption, which means no tax charged and no credits.

The pharmacy question is mostly about goods, and its principal answer is zero-rating, which means no tax charged and full credits.

Those two outcomes look identical on an invoice and are opposite in their effect on the business. A pharmacy contains both, which is the subject of this article.

Three Categories, One Business

The structural point. This section is our own analysis.

Most businesses this publication has written about make supplies in one or two categories. A restaurant is taxable. A childcare operator is exempt. A grocer is mostly zero-rated with a taxable fringe.

A pharmacy is the common retail business that contains all three at once.

Commentary sets out the practical division: prescription drugs are zero-rated; over-the-counter products, vitamins, personal care, cosmetics, durable medical equipment and most pharmacy retail merchandise are taxable; and certain clinical services billed to public or private plans are treated as exempt[5].

It describes the consequence directly: the pharmacy is a mixed supplier and the chart of accounts must separate zero-rated from taxable revenue line by line[5].

Two observations, ours.

This is not an edge case for a large chain. It describes an ordinary independent pharmacy in any Canadian town.

And the three categories are not separated by department in the accounting system unless somebody deliberately separates them, because the point of sale system is organised by product, not by tax status.

Why The Third One Is Different

The mechanism that makes the classification matter.

Commentary states the general rule: if a supply fits a Schedule VI category, being basic groceries, prescription drugs, exports, certain medical devices and the others listed, it is zero-rated: no GST/HST charged, but ITCs are available. A fully taxable supply carries tax and ITCs are available[2].

Exempt supplies are different. As this publication has described in the childcare and medical contexts, an exempt supplier charges no tax and recovers none on its inputs.

A pharmacy-specific source states the consequence in the form it takes in practice: input tax credits on overhead are claimable to the extent the supply is taxable or zero-rated, but not to the extent it is exempt[5].

Three consequences, ours.

On the customer's side, zero-rated and exempt are indistinguishable. Neither carries tax on the receipt.

On the pharmacy's side they are opposite. One preserves full recovery on rent, utilities and everything else; the other destroys it proportionately.

Which means the classification question is not really about what the customer pays. It is about what proportion of the building's overhead tax the business gets back.

What Actually Zero-Rates A Drug

The provision, as CRA sets it out.

CRA states that Part I of Schedule VI contains provisions that zero-rate supplies of a broad range of drugs and substances, and that section 3 of Part I of Schedule VI zero-rates a supply of a drug when the drug is for human use and is dispensed (a) by a medical practitioner to an individual for the personal consumption or use of the individual or an individual related thereto; or (b) on the prescription of a medical practitioner or authorized individual for the personal consumption or use of the individual named in the prescription[4].

Three elements, and this breakdown is ours.

It must be a drug, which is the element the section below shows is doing more work than people expect.

It must be for human use, which is where veterinary supply departs and which this article does not pursue.

And it must be dispensed either by a practitioner or on a prescription, for the personal consumption or use of the individual named.

That last phrase is narrower than it looks. The zero-rating attaches to a supply made for a named individual's personal use, not to drugs in general.

When Pharmacists Became Prescribers

An amendment that followed provincial scope-of-practice changes.

CRA ruled that effective for supplies made after February 26, 2008, in the Province of Alberta and other jurisdictions where pharmacists are authorized to prescribe drugs, a supply made by a pharmacy of a drug for human use that is prescribed by a pharmacist for the personal consumption or use of an individual named in the prescription is zero-rated pursuant to paragraph 3(b) of Part I of Schedule VI[3].

It records the definition: a pharmacist means a person who is entitled under the laws of a province to practise the profession of pharmacy[3].

Two observations, ours.

The federal tax result follows provincial authority. Whether a pharmacist's prescription zero-rates a drug depends on whether that province authorises them to prescribe it.

Which means the answer can differ between provinces for identical transactions, and can change when a province amends its scope of practice without anything happening federally.

A pharmacy operating across provincial lines, or one in a province that has recently expanded prescribing authority, has a question that a purely federal reading would not surface.

A Transitional Rule Worth Reading

A detail in the same ruling that is unusual enough to record.

CRA states that a transitional rule provides that these amendments also apply to a supply made on or before February 26, 2008, if no GST/HST was charged, collected or remitted on or before that day in respect of the supply. And that consequently, if a pharmacy did charge, collect or remit the GST/HST on or before February 26, 2008 in respect of a supply made on or before that day, the amendment will not apply[3].

Two observations, ours.

The relief is conditioned on the taxpayer not having charged the tax. A pharmacy that took the cautious course and charged tax is excluded from the retroactive benefit; one that did not is included.

This publication has now encountered that structure twice, the naloxone notice discussed below containing the same condition[6]. It appears to be the standard drafting pattern for retroactive zero-rating.

The logic is administrative rather than punitive: where tax was collected from customers, unwinding it would require refunding them, and the legislation declines to require that. But the effect is that caution was penalised, which is worth noticing given how often this series has observed that the cautious answer is treated as the safe one.

Our Sources Disagree On The Dispensing Fee

A direct conflict, reported as we found it.

CRA, in a 2009 ruling, states that a supply made by a pharmacy of a service of dispensing a drug where the supply of that drug is included in Part I of Schedule VI is zero-rated pursuant to section 4 of this Part, and that effective for supplies made after February 26, 2008, zero-rated status applies to a dispensing fee charged by pharmacists[3].

The Canadian Pharmacists Association, in a submission seeking an interpretation, states that prescription drugs and dispensing fees are GST/HST zero-rated, and that what is unclear is whether the broader range of consultative, assessment, treatment and counselling services supplied by a licensed pharmacist are exempt[1].

An accounting firm publication dated July 2026 states that dispensing fees and clinical services are typically exempt supplies under section 5 of Schedule V Part II, and lists dispensing fees in its exempt revenue bucket alongside medication reviews and vaccinations[5].

Those are not reconcilable as stated. The first two put the dispensing fee in Schedule VI, zero-rated. The third puts it in Schedule V, exempt.

Two observations, ours.

The weight of sources favours zero-rating: a CRA ruling citing a specific provision, and the national professional association.

But the dissenting source is the most recent and is written specifically for pharmacy owners, which is exactly the profile that would reflect a change we have not found.

What That Disagreement Is Worth

The magnitude, computed by us on illustrative figures, because a conflict is easier to take seriously with a number attached.

Take a pharmacy with $2,600,000 of prescription drug revenue, $900,000 of taxable retail, $280,000 of exempt clinical services, and $520,000 of dispensing fees. Assume $314,000 of overhead subject to tax, carrying roughly $40,820 of tax at an assumed 13 percent.

If the dispensing fee is zero-rated, the recoverable proportion is roughly 93.5 percent, and about $38,162 of that overhead tax comes back.

If it is exempt, the proportion falls to roughly 81.4 percent, and about $33,226 comes back.

A difference of roughly $4,936 a year on overhead alone, from one classification question.

Two observations, ours.

The figure is not enormous, and it recurs every year and applies to every input the business buys, not only the overhead in our illustration.

And the direction of the error matters. A pharmacy following the exempt view claims less than it may be entitled to, which as this publication has repeatedly noted is the error nobody detects.

Why We Are Not Resolving It

Our position on the conflict, stated openly.

We could pick the CRA ruling and present the matter as settled. It is a ruling, it cites a provision by number, and it is corroborated by the professional association.

We are not doing that, for three reasons.

The ruling is from 2009 and was given to another taxpayer on its own facts. This publication has now documented several areas where guidance that old has been overtaken.

The dissenting source is from 2026 and cites a different provision by number, which is a specific claim rather than a loose characterisation.

And we did not read either Schedule. We are comparing two secondary accounts of provisions we have not seen.

What we will say is where the burden of checking falls. A pharmacy currently treating dispensing fees as exempt should establish whether that is right, because on our figures it is claiming several thousand dollars a year less than it may be entitled to. A pharmacy treating them as zero-rated is in the position the CRA ruling describes and should keep the ruling reference with its working papers.

Either way this is a question to put to an adviser with the Schedules in front of them, which is a less satisfying conclusion than a rule and a more honest one.

A Prescription Does Not Make It A Drug

A finding from a 2019 ruling that defeats the most natural assumption in this area.

CRA considered whether natural health products should be considered zero-rated drugs under section 3 of Part I of Schedule VI when sold on the prescription of a medical practitioner, and concluded they should not[4].

Its reasoning: the CRA's interpretation of the meaning of drug for purposes of section 3 of Part I of Schedule VI is reflective of the types of products that are dispensed by a pharmacist acting in the capacity of a pharmacist[4].

And it declined to fix the position administratively: an amendment to the ETA would be required to treat the sale of natural health products as zero-rated supplies. Legislative amendments are a matter of tax policy, which falls within the responsibility of the Department of Finance Canada[4].

Three consequences, ours.

The prescription is not the operative fact. Section 3 requires a drug that is dispensed on a prescription. A prescription attached to something that is not a drug does not satisfy it.

Which means a pharmacy cannot classify by whether a piece of paper accompanied the sale. The product category has to be established first.

And CRA told the enquirer it had raised the concern with Finance, which is a polite way of confirming that the outcome follows the legislation rather than anyone's view of what is sensible.

Nor Is A Prescription Required

The same assumption failing in the other direction.

A CRA notice records that Budget 2017 proposed an amendment to Part I of Schedule VI that would add naloxone and its salts to the list of non-prescription drugs used to treat life-threatening conditions that are zero-rated for purposes of the GST/HST[6].

Two observations, ours.

The phrase the list of non-prescription drugs used to treat life-threatening conditions that are zero-rated establishes that such a list exists and had entries before naloxone was added to it.

So zero-rating does not require a prescription either. Some products are zero-rated on the counter.

We flag firmly that the notice describes a proposed amendment and states that any commentary in this publication should not be taken as a statement by the CRA that the proposed amendment will become law in its current form[6]. We did not verify its enactment.

The notice also carries the same conditional retroactivity described earlier: it would apply to supplies made after 22 March 2017, and to supplies made between 21 March 2016 and that date where no amount was charged, collected, remitted or paid as or on account of tax[6].

So What Is The Test

Pulling the two preceding sections together. This synthesis is ours.

Neither the presence nor the absence of a prescription decides the question.

What the material shows is two independent routes into zero-rating.

The first is section 3: a product that is a drug, for human use, dispensed by a practitioner or on a prescription, for a named individual's personal use.

The second is enumeration: specific substances listed in Part I regardless of prescription, of which the non-prescription life-threatening category is one.

Two consequences.

A pharmacy classifying by where the product sits in the store will get both routes wrong at the edges, treating prescribed non-drugs as zero-rated and listed counter products as taxable.

And the enquiry for any unusual product is a product-level question, not a transaction-level one: is this thing within Part I, by whichever route.

Which is a considerably less convenient answer than a rule about prescriptions, and it is what the two rulings actually establish.

Everything Else Is Taxable

The residual rule, and it is stricter than most operators assume.

Commentary states that Schedule V and Schedule VI are exhaustive, enumerated lists, so that a supply is exempt or zero-rated only if it fits a specific listed category, not merely because it feels like it should be. And that where a supply doesn't clearly fit any Schedule V or VI category, the default answer under the Excise Tax Act is that it's fully taxable[2].

Three consequences, ours.

The burden runs toward taxable. An operator cannot reason from the health-adjacent character of a product to a favourable answer.

Which is why a pharmacy's vitamins, supplements, cosmetics and personal care lines are taxable[5] notwithstanding that they sit behind the same counter as the zero-rated stock.

And it explains the natural health products ruling exactly. The product did not fit a listed category, so it fell to the default, and CRA had no discretion to place it elsewhere.

The Buckets A Pharmacy Needs

The practical structure, from a source we identify as commercial.

Commentary states that the HST chart of accounts for a typical Ontario pharmacy needs at least four revenue buckets and four expense buckets, and sets them out as: zero-rated, being prescription drug sales, the prescription portion only, comprising patient copay plus insurance reimbursement for the drug; exempt, being dispensing fees, medication reviews, recognised clinical services, plan-paid clinical services and vaccines billed to the provincial insurer; taxable, being over-the-counter drugs, vitamins, supplements, cosmetics, personal care, some durable medical equipment and retail merchandise; and other, typically taxable, being items such as rent of part of the premises to a clinic[5].

We repeat that this source's placement of dispensing fees in the exempt bucket conflicts with the CRA ruling discussed above, and a pharmacy adopting this structure should settle that first.

Two observations of our own on the rest of it.

The zero-rated bucket is defined as the prescription portion only, comprising both what the patient pays and what the plan reimburses for the drug. That is the correct unit, because a single prescription generates revenue from two payers.

And the fourth bucket, rent of part of the premises, is the one most likely to be missed entirely. A pharmacy leasing space to a physician or clinic has a commercial landlord's supply sitting inside a health business, and it does not resemble anything else on the ledger.

What The Apportionment Is Worth

The arithmetic, computed by us on the illustrative figures introduced earlier, setting the dispensing fee question aside.

On $2,600,000 zero-rated, $900,000 taxable and $280,000 exempt, total revenue is $3,780,000 and the proportion supporting recovery is roughly 92.6 percent.

On $314,000 of overhead subject to tax, carrying roughly $40,820 of tax:

Claiming nothing on overhead recovers nil.

Claiming the correct proportion recovers roughly $37,796.

Claiming all of it recovers $40,820, overclaiming by roughly $3,024.

Two observations, ours.

The gap between correct and full is small in percentage terms precisely because most of a pharmacy's revenue supports recovery. The exempt fraction is a minority of the business.

Which means the risk profile is unusual: the overclaim exposure is modest, while the underclaim exposure, for a business that claims nothing on overhead because it thinks of itself as a health business, is the whole amount.

Both Errors Are Live

Our own observation on which way a pharmacy is likely to be wrong.

Two errors are available and they are not equally likely.

Overclaiming, by taking full credits on overhead without apportioning for the exempt fraction, is assessable and will be found. It is the error the audit programme is designed to catch.

Underclaiming, by treating the business as though its non-taxable revenue were all exempt, is not assessable and will not be found.

Three consequences.

A pharmacy that has never distinguished zero-rated from exempt in its own mind is more likely to underclaim than overclaim, because both look like non-taxable revenue.

The distinction is invisible at the till and consequential only in the return, which is a poor combination for getting it right by accident.

And the dispensing fee conflict discussed above sits on exactly this line. If the CRA ruling is right and a pharmacy has followed the exempt view, it has underclaimed, and nobody will tell it.

A Claim We Are Flagging

A quantified assertion in our commercial source, which we report with its provenance visible.

That source states that doing this allocation properly typically recovers $4,000 to $12,000 per year in HST that the average pharmacy CPA misses[5].

Two observations, ours.

The claim appears in a publication marketing accounting services to pharmacy owners, and asserts that a competing class of adviser is getting this wrong. That is a commercial claim as much as a technical one.

It is nonetheless in the right order of magnitude on our own independent arithmetic, which produced a difference of roughly $4,936 a year from the dispensing fee classification alone on a $3.78 million pharmacy.

We are neither adopting nor dismissing it. A range presented without its underlying assumptions is not a finding, and we note that our own figure sits inside the range while resting on assumptions we have stated.

What The Auditor Actually Examines

The enquiry in practice. This section is our own analysis.

The split of revenue between zero-rated, taxable and exempt, and whether the point of sale system produces it.

The input tax credit claim against that split, which is where an overclaim shows.

Whether any apportionment method exists at all, and whether it is applied consistently.

Front-of-store product classification, particularly vitamins, supplements and personal care.

Products sold on prescription that may not be drugs, following the natural health products ruling.

Rental income from clinic or professional space within the premises.

Clinical service revenue and its classification.

The fourth item is the most productive in an ordinary examination, because it is a product-by-product question answered by a point of sale configuration that somebody set up once and nobody has revisited.

What Records Survive

A revenue split by tax status, produced by the system rather than estimated at year end.

The apportionment method for input tax credits, written down, with its basis.

Product-level classification decisions for anything at the edges, with reasons.

The basis for treating any service as exempt, given that the default is taxable.

Point of sale configuration records, showing when tax statuses were set and by whom.

Provincial prescribing authority where a pharmacist's own prescription is relied on.

Lease documentation for any space sublet within the premises.

What To Do

Separate zero-rated from exempt in your own head first. They look identical to the customer and are opposite for the business.

Settle the dispensing fee question specifically. A CRA ruling puts it in Schedule VI as zero-rated; a 2026 commentary puts it in Schedule V as exempt, and the answer changes what you recover.

Do not classify by whether a prescription was involved. CRA has ruled natural health products taxable even when prescribed, and some non-prescription products are zero-rated.

Treat unusual products as a product-level question. The enquiry is whether the thing is within Part I, by either route.

Assume taxable where nothing fits. The Schedules are exhaustive lists and the default is full taxability.

Build the revenue split into the point of sale system. A year-end estimate is not an apportionment method.

Write the apportionment down. An unwritten method is not defensible and is usually not applied consistently either.

Check the rent. Space sublet to a clinic is a commercial supply sitting inside a health business and it does not resemble anything else on the ledger.

Check your province's prescribing authority. Zero-rating under paragraph 3(b) follows provincial scope of practice, so the answer can differ across a chain.

Suspect underclaiming before overclaiming. Nobody is assessed for recovering too little, so that error persists indefinitely.

The Limits Of This Analysis

Several caveats matter. This is not tax advice. Everything is stated as verified in August 2026 and requires confirmation. Our sources conflict directly on whether dispensing fees are zero-rated under Schedule VI or exempt under Schedule V, and we expressly decline to resolve it; the conflict is material because it changes input tax credit entitlement. We did not read Schedule V or Schedule VI and are comparing secondary accounts of provisions we have not seen. The CRA rulings relied on date from 2009 and 2019, were given to other taxpayers on their own facts, and do not bind CRA in respect of anyone else. The naloxone notice dates from April 2017, describes a proposed amendment, carries CRA's own statement that its commentary should not be taken as confirming the amendment would become law in its current form, and we did not verify its enactment. One source's revenue categorisation, its four-bucket structure and its quantified recovery estimate come from a firm marketing accounting services to pharmacy owners, and its estimate asserts that a competing class of adviser is in error; we neither adopt nor dismiss it. We did not research provincial drug benefit programmes, the medical expense tax credit, rebate mechanisms available to health care operators, medical devices under Part II of Schedule VI, veterinary drugs, compounding, methadone or other specific programme supplies, importation, or the position of a pharmacy within a larger retail chain. All arithmetic is our own, uses assumed rates and hypothetical revenue and overhead figures, and is illustrative only. The three-categories framing, the two-routes synthesis, the both-errors analysis and the audit examination structure are our own.

Related Reading

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Frequently Asked Questions

Are prescription drugs zero-rated or exempt?

Zero-rated. Section 3 of Part I of Schedule VI zero-rates a drug for human use dispensed by a practitioner or on a prescription for the personal consumption of the individual named. That matters because zero-rating preserves input tax credits while exemption destroys them.

What about the dispensing fee?

Our sources disagree, and we have not resolved it. A 2009 CRA ruling says a dispensing fee is zero-rated under section 4 of Part I of Schedule VI, and the national pharmacists' association says the same. A 2026 accounting publication puts dispensing fees in the exempt bucket under Schedule V. The answer changes your recovery.

If a doctor prescribes it, is it zero-rated?

Not necessarily. CRA ruled that natural health products are not zero-rated drugs under section 3 even when sold on a prescription, because its interpretation of drug reflects the types of products dispensed by a pharmacist acting as a pharmacist. It added that an amendment to the Act would be needed to change that.

Does everything zero-rated need a prescription?

No. A CRA notice refers to a list of non-prescription drugs used to treat life-threatening conditions that are zero-rated, to which naloxone was proposed to be added by Budget 2017. So there are two routes into zero-rating, and neither the presence nor absence of a prescription settles it.

Can we claim all the HST on our rent and utilities?

Only to the extent your supplies are taxable or zero-rated, not to the extent they are exempt. On our illustrative figures a pharmacy with a small exempt fraction recovers about 92.6 percent, so claiming everything overclaims by a few thousand a year and claiming nothing leaves the whole amount behind.

Which mistake are we more likely to be making?

Underclaiming. Zero-rated and exempt revenue both look like non-taxable revenue at the till, so a pharmacy that has never distinguished them tends to treat too much as exempt and recover too little. That error is never assessed and therefore never corrected.

References

1. Canadian Pharmacists Association. Request for Interpretation: GST/HST Application to Pharmacist Services, on prescription drugs and dispensing fees being GST/HST zero-rated; and on it being unclear to many pharmacists and pharmacy owners whether the full range of consultative, assessment, treatment and counselling services supplied to a patient by a licensed pharmacist are GST/HST exempt, with examples including structured medication reviews, disease management clinics and consultations, and blood pressure monitoring. Note: a national professional association's submission seeking an interpretation; parts of the document as retrieved are corrupted and we have relied only on legible passages. pharmacists.ca
2. Rotfleisch & Samulovitch PC. GST/HST Zero-Rated and Exempt Supplies: A Canadian Tax Lawyer's Guide, on a supply fitting a Schedule VI category, including basic groceries, prescription drugs, exports and certain medical devices, being zero-rated with no GST/HST charged but ITCs available; on a fully taxable supply carrying tax at the applicable rate with ITCs available; on Schedule V and Schedule VI being exhaustive, enumerated lists so that a supply is exempt or zero-rated only if it fits a specific listed category and not merely because it feels like it should be; and on the default answer under the Excise Tax Act being full taxability where a supply does not clearly fit any Schedule V or VI category. Note: a tax law firm publication. taxpage.com
3. Canada Revenue Agency GST/HST Ruling 90170, 18 February 2009, Supplies of Drugs Prescribed by Pharmacists and Associated Dispensing Fees, as reproduced by a tax publication service, on a pharmacist meaning a person entitled under the laws of a province to practise the profession of pharmacy; on paragraph 3(b) of Part I of Schedule VI having the effect of zero-rating supplies made by pharmacies of a drug prescribed by a medical practitioner or by an authorized individual authorized to prescribe under provincial legislation, when dispensed for the personal consumption or use of the individual named in the order; on those amendments applying to supplies made after 26 February 2008, including in Alberta and other jurisdictions where pharmacists are authorized to prescribe; on a supply made by a pharmacy of a service of dispensing a drug where the supply of that drug is included in Part I of Schedule VI being zero-rated pursuant to section 4 of that Part, so that zero-rated status applies to a dispensing fee; and on a transitional rule extending the amendments to supplies made on or before 26 February 2008 where no GST/HST was charged, collected or remitted on or before that day, with the amendment not applying where tax was charged, collected or remitted. Note: a ruling given to another taxpayer on its own facts, accessed through a secondary reproduction. Its treatment of dispensing fees conflicts with reference 5. taxinterpretations.com
4. Canada Revenue Agency GST/HST Ruling 185732, 23 July 2019, Application of GST/HST to Natural Health Products, as reproduced by a tax publication service, on Part I of Schedule VI containing provisions that zero-rate supplies of a broad range of drugs and substances; on section 3 of Part I of Schedule VI zero-rating a supply of a drug for human use dispensed by a medical practitioner to an individual for their personal consumption or that of a related individual, or on the prescription of a medical practitioner or authorized individual for the personal consumption or use of the individual named in the prescription; on paragraph 3(b) being the relevant provision for the transaction described; on the CRA's interpretation of the meaning of drug for those purposes being reflective of the types of products dispensed by a pharmacist acting in the capacity of a pharmacist; on an amendment to the Act being required to treat the sale of natural health products as zero-rated supplies, legislative amendments being a matter of tax policy within the responsibility of the Department of Finance; and on taxable supplies being taxable at 0 percent, 5 percent, 13 percent or 15 percent depending on the province, with exempt supplies included in Schedule V and zero-rated supplies in Schedule VI. Note: a ruling given to another taxpayer on its own facts, accessed through a secondary reproduction. taxinterpretations.com
5. Insight Accounting CPA. CPA for Pharmacy Owners in Ontario (2026), on prescription drugs being zero-rated supplies under Schedule VI; on over-the-counter products, vitamins, personal care, cosmetics, durable medical equipment and most pharmacy retail merchandise being taxable; on the pharmacy being a mixed supplier whose chart of accounts must separate zero-rated from taxable revenue line by line; on input tax credits on overhead being claimable to the extent the supply is taxable or zero-rated but not to the extent it is exempt; on dispensing fees and clinical services being typically exempt supplies under section 5 of Schedule V Part II, with dispensing fees listed in the exempt revenue bucket alongside medication reviews, recognised clinical services, plan-paid services and vaccines billed to the provincial insurer; on the chart of accounts needing at least four revenue and four expense buckets, with the zero-rated bucket comprising the prescription portion only, being patient copay plus insurance reimbursement for the drug, and a fourth bucket for items such as rent of part of the premises to a clinic; and on the assertion that doing the allocation properly typically recovers $4,000 to $12,000 per year in HST that the average pharmacy CPA misses. Note: a firm marketing accounting services to pharmacy owners, dated July 2026. Its treatment of dispensing fees conflicts with reference 3, and its quantified recovery estimate asserts that a competing class of adviser is in error; we neither adopt nor dismiss it. insightscpa.ca
6. Canada Revenue Agency. GST/HST Notice 305, Questions and Answers on the Proposed GST/HST Treatment of Supplies of Naloxone, April 2017, on Budget 2017 having proposed an amendment to Part I of Schedule VI that would add naloxone and its salts to the list of non-prescription drugs used to treat life-threatening conditions that are zero-rated; on the amendment being included in Bill C-44; on the change applying to any supply or importation made after 22 March 2017, and to supplies and importations made after 21 March 2016 and on or before that date where no amount was charged, collected, remitted or paid as or on account of tax; and on zero-rated meaning no GST/HST is charged while a registrant can claim input tax credits on purchases and expenses made to provide zero-rated supplies. Note: a CRA notice describing a proposed amendment, carrying CRA's statement that its commentary should not be taken as confirming the amendment would become law in its current form; we did not verify its enactment. canada.ca

This article is provided for general informational purposes and is not tax advice. Its sources conflict directly on the treatment of dispensing fees and that conflict is reported rather than resolved. Schedules V and VI were not read directly. The CRA rulings relied on date from 2009 and 2019 and were given to other taxpayers. The naloxone notice describes a proposed amendment whose enactment was not verified. One source is a firm marketing services to pharmacy owners. All arithmetic is the authors' own and is illustrative only.