The Canadian Federation was established in the year 1867. With its advent, the British North American Act tried to form a federal government, which would have the capability to gather revenues without any limitations. Provinces were not given enough taxation power. The provinces were entrusted with the responsibility of levying property taxes, sales taxes as well as income taxes. On the other hand, the federal government was given the responsibility of handling the costly programs like the construction of railways. History of taxation in Canada reveals that the bulk of the revenue of the federal government during early days was obtained from trade tariffs. Excise taxes made up the remaining portion of the taxes in Canada. By the end of nineteenth century corporate taxes made their appearance.
Taxation in Canada are of the following types :
Corporations as well as Canadian tax payers make their income tax payments on the basis of global income. The Canadian taxpayers are secured from double taxation. This security is provided by the foreign tax credit. The Canadian government also imposes tax on people not presently dwelling in the country but have earnings from an establishment, which is of Canadian origin.