Why one review has to cover four different tests
The most common multi-province mistake is assuming there is one answer to "do we owe anything there?", when each system asks a different question. You can owe a province sales tax registration with no corporate tax there, or payroll withholding for one remote employee with neither, or corporate tax with no new sales tax registration because GST/HST already covers it. That is why the review has to be systematic rather than reactive: businesses that answer each province's letters one at a time end up registered wherever a letter arrived and exposed everywhere else.
The review itself is a mapping exercise. List where your customers, people, premises, inventory and equipment actually are, then run that map through each of the four tests below. For an Ontario company, the usual result is shorter than owners fear: often one or two new registrations and a few added lines on the calendar, not a parallel accounting system per province. But the result has to come from the map, and the map has to be redone whenever the footprint changes, because every test below is triggered by facts, not by revenue size.
Corporate income tax follows permanent establishments
You file and pay corporate income tax in a province only if you have a permanent establishment there: broadly a fixed place of business, an agent with authority to contract, or substantial equipment working in the province. Sales into a province, on their own, do not create one. The full test, including the deemed rules that catch construction and field-service companies, is in whether working in another province creates corporate tax there.
If you do have permanent establishments in more than one province, you still file one T2, and Schedule 5 allocates your taxable income between the provinces using a two-factor formula built on gross revenue and salaries and wages. Each province then taxes its slice at its own rates, so your blended rate moves with the allocation. Two provinces sit outside CRA's administration for corporate tax: Alberta collects its own through a separate provincial return, and Quebec requires its own full corporate return, so a permanent establishment in either adds a genuine second filing, not just a schedule. Ontario's corporate tax has been administered by CRA inside the T2 for years, which is why a purely Ontario company never sees this machinery.
The compliance points to review: whether Schedule 5 is being filed at all (we regularly see multi-location companies whose returns tax everything in Ontario by default), whether the allocation percentages still reflect where revenue and payroll actually sit, and whether the Alberta or Quebec return matches the federal allocation, because mismatched percentages between returns are how the same dollar gets taxed twice until someone amends.
Sales tax is one federal registration plus up to four provincial ones
GST/HST is the easy layer: one federal registration covers every province, and the place-of-supply rules decide which rate you charge, generally based on where the goods are delivered or the customer is located. Selling into New Brunswick from Mississauga is not a new registration; it is the right HST rate on the invoice and the same single return you already file. The review point here is rate hygiene: whether your invoicing system charges by the customer's province, and whether anyone updates it when a province changes its rate.
The provincial layer is where registrations multiply. British Columbia, Saskatchewan and Manitoba each run their own retail sales tax, outside the GST/HST system, with separate registration, separate returns and their own rules for when an out-of-province seller must register; all three have extended registration to sellers with no physical presence once their sales into the province pass thresholds. Quebec runs QST through Revenu Québec, closely harmonized with GST but separately administered. A review asks, province by province: what do we sell into it, do its registration rules reach us yet, and if so, are we charging, collecting and remitting on its calendar.
Getting this wrong compounds quietly, because uncollected sales tax becomes the seller's cost. A province that finds an unregistered seller can assess the tax that should have been collected, plus interest and penalties, for every open year, and you rarely get to go back to customers for it. That is why the sales-tax layer of the review deserves the same rigour as income tax, even though each individual return is small.
Payroll follows each employee's province of employment
The payroll test is per employee, not per company: withholding follows the employee's province of employment, which is generally the province of your establishment where they report for work, and for full-time remote workers CRA now looks at which of your establishments they are attached to. One hire who works in another province changes the tax tables for that employee, and in Quebec adds a second remittance stream to Revenu Québec alongside the federal one.
Employer-side levies stack on top. Ontario's Employer Health Tax has an exemption for eligible private employers, but British Columbia, Manitoba, Newfoundland and Labrador and Quebec each run their own payroll-based employer tax with their own thresholds and returns, so payroll in those provinces can trigger an annual filing even when withholding is already handled. Workers' compensation is separate again: each province runs its own board, WSIB in Ontario, and coverage generally must be registered where the work is performed, including for short site visits in some industries.
The review points: each employee mapped to the right province of employment, remote workers reviewed against CRA's attachment policy rather than left where they were hired, employer levies registered wherever payroll exists, and the remittance schedule itself re-checked, since growing multi-province payrolls are exactly the ones that cross into faster deadlines; how those tiers work is in what an accelerated payroll remitter is, and the broader discipline in how to prevent payroll remittance surprises.
Registrations, and the paperwork provinces expect before you operate
Most provinces require an extra-provincial registration before a corporation carries on business there, on top of any tax accounts. It is corporate-law paperwork rather than tax, filed with the province's registry, usually with a small annual return to keep it current, and it matters for practical reasons: courts, lenders and sometimes customers expect it, and letting it lapse can hold up financing or a contract signature at the worst moment. Quebec adds its own enterprise registration and, for employers there, obligations that go beyond tax.
This is also where the review checks the boring-but-binding items: which provinces hold an account in your business number, whether dormant registrations from an old project should be closed rather than left generating demands to file, and whether the addresses and directors on each registry are current, since provincial mail to a stale address is still valid notice.
Put the result on one calendar, and keep the file that proves it
The output of a multi-province review is a single compliance calendar, because obligations spread across four systems and three administrators are only manageable in one place. In summary form:
| Obligation | Triggered by | Administered by | Typical filings |
|---|---|---|---|
| Corporate income tax | Permanent establishment in the province | CRA for most provinces; Alberta and Quebec separately | T2 with Schedule 5; Alberta and Quebec returns where applicable |
| GST/HST | Taxable sales; place-of-supply rules set the rate | CRA (Revenu Québec administers GST in Quebec) | One return, all provinces |
| PST / QST | Sales into or presence in BC, Saskatchewan, Manitoba, Quebec | Each province | Separate registration and returns per province |
| Payroll withholding | Each employee's province of employment | CRA; Revenu Québec for Quebec employees | Remittances, T4s; RL-1s in Quebec |
| Employer payroll levies | Payroll in ON, BC, MB, NL, QC over each threshold | Each province | Annual returns, instalments for larger payrolls |
| Workers' compensation | Workers performing work in the province | Each provincial board | Registration, payroll reporting, premiums |
| Extra-provincial registration | Carrying on business in the province | Each corporate registry | Initial registration, annual returns |
Around the calendar sit three supporting disciplines. Corrections: when the review finds a missed registration or filing, fix it deliberately, registering and filing back periods on your own initiative is consistently cheaper than waiting to be found, and CRA and the provinces treat voluntary correction differently from discovered non-compliance. Retention: keep the working papers behind every allocation, registration decision and return for six years from the end of the year they relate to, because a provincial auditor's first question is why your percentages are what they are. And penalties: every system on the table carries its own late-filing and late-payment charges with daily interest, which is the practical argument for the calendar itself.
The last discipline is onboarding. Whenever a new accountant, bookkeeper or payroll provider takes over a multi-province file, the map, the calendar and the open balances have to transfer intact, or obligations silently drop. When we take on a file like this, rebuilding that map is the first week's work, and maintaining it is exactly the CRA support and corporate compliance work an Ontario CPA should carry inside an Ongoing Financial Partnership, with CRA Support handling anything that has already gone to letters.
What changes the answer for your business
Which of these obligations you actually have turns on a short list of facts:
- Where you have premises, people or equipment, since those create permanent establishments and payroll obligations while pure sales usually do not
- Whether Alberta or Quebec is in the footprint, because each adds a genuinely separate corporate filing, and Quebec a second administration for payroll and sales tax
- What you sell into BC, Saskatchewan and Manitoba, measured against each province's registration rules for out-of-province sellers
- Where each employee works, including remote hires, employee by employee, not company-wide
- How the footprint is changing, since every new hire, warehouse, job site or major customer province re-runs the tests
- What has already been missed, because the cost and the fix both depend on whether you correct it or a province finds it
If you can list your provinces but not your filings, that is the gap. A free 15-minute discovery call is enough to scope the review, and the finished product is the one-page calendar your team runs all year.
Source: CRA — T2 Schedule 5, Tax Calculation Supplementary (provincial and territorial allocation).
