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Selling online in Canada: platforms and rules explained

By FastBuySale Newsroom · 9 Nov 2026 · 6h ago

Selling online in Canada today

Canadians sell online through marketplaces, social media shops, print-on-demand services, local buy-and-sell apps and their own websites. Some are clearing out personal items; others run full businesses. The rules depend on which you are doing. This guide explains the main tax, consumer protection and product safety rules for Canadian sellers, using the CRA's guidance for the platform economy and federal and provincial rules. It is not legal or tax advice.

Step 1: choose where to sell

Marketplaces give you access to large audiences and handle payments, but charge fees and set rules. Social media selling suits makers and small brands with followers. Your own online store gives you more control and customer data but requires you to bring traffic. Local buy-and-sell apps work well for bulky items and local pickup. Many sellers use more than one channel.

Step 2: personal sales or business?

Selling your own used items occasionally, such as clothes or furniture you no longer need, is generally not a business, and you usually sell them for less than you paid. Buying items to resell, making products to sell or selling regularly with the aim of profit is generally a business. The CRA looks at factors such as profit intention, frequency and how organised the activity is.

Step 3: register your business if needed

A sole proprietor operating under their own legal name may not need to register, but most provinces require registration of a business name that differs from your own. Incorporation, federally or provincially, gives a separate legal entity but adds costs and filings. Some municipalities require business licences for home-based businesses.

Step 4: report income to the CRA

If you are carrying on a business, you report business income and expenses on Form T2125, Statement of Business or Professional Activities, with your T1 income tax return. You can deduct reasonable expenses, such as cost of goods, platform and payment fees, shipping, packaging, advertising and a portion of home office costs if you qualify. Self-employed individuals pay both portions of Canada Pension Plan contributions on net self-employment earnings, or Quebec Pension Plan contributions in Quebec.

Step 5: GST/HST registration

You must register for GST/HST once your worldwide taxable supplies exceed $30,000 in a single calendar quarter or over four consecutive calendar quarters. Below that, you are a small supplier and registration is optional. Once registered, you charge GST or HST at the rate for the province where the customer is, file returns and can claim input tax credits for tax paid on business purchases. Some marketplaces collect and remit GST/HST on certain sales, so check how your platform handles it.

Step 6: provincial consumer protection

Each province has consumer protection laws that cover online, or distance, contracts. Common rules require sellers to disclose their identity and contact details, a full description of the goods, the total price including taxes and shipping, delivery arrangements and the cancellation and refund policy before the customer completes the order. Many provinces give consumers rights to cancel if goods are not delivered within a set time, and Quebec has its own detailed rules. The Competition Act also prohibits false or misleading representations and drip pricing, where mandatory fees are hidden until late in checkout.

Step 7: product safety and labelling

The Canada Consumer Product Safety Act applies to consumer products sold in Canada, including online. Products must not pose an unreasonable danger, and some categories, such as children's products, cosmetics and certain household items, have specific requirements. Labels must meet bilingual and textile labelling rules where applicable. Selling recalled products is prohibited.

Step 8: platform reporting

Canada has rules requiring digital platform operators to collect and report information about sellers to the CRA, including income earned through the platform. This means sales through marketplaces and apps are visible to the CRA. Reporting does not mean you owe tax on everything, but you must report all business income.

Worked example: a reseller

Amira buys vintage clothing at estate sales and sells it online. In a year, her sales are $22,000, her cost of goods is $9,000, platform and payment fees total $2,600, and shipping and packaging cost $1,800. Her net business income is $8,600, which she reports on Form T2125. Because her taxable sales are below $30,000 over four consecutive quarters, she is a small supplier and does not need to register for GST/HST. She tracks her quarterly sales in case they rise.

Worked example: crossing the threshold

Ben runs an online candle shop. His sales were $6,000, $7,500, $8,000 and then $9,500 over four consecutive calendar quarters, a total of $31,000. Because he has exceeded $30,000 over four consecutive quarters, he is no longer a small supplier, and he must register for GST/HST. He must register for GST/HST and start charging it on taxable sales. The CRA explains the exact timing: once a seller stops being a small supplier, registration and tax collection must begin within a short period, generally about a month after the end of the quarter in which the threshold was passed, so Ben checks the CRA page and registers straight away.

Shipping and customs

For domestic orders, compare carriers for cost and tracking. For exports, customers may pay duties and taxes in their own country, and some products are restricted. When importing stock into Canada, duties and GST/HST may apply at the border, collected by the Canada Border Services Agency.

Payments and fees

Marketplace and payment processor fees reduce your margin. Calculate your margin per item after the platform fee, payment fee, shipping and packaging. The percentage calculator on this site can help work out fees and margins.

Privacy

If you collect customers' personal information, federal privacy law, PIPEDA, applies to most private-sector businesses outside Quebec, Alberta and British Columbia, which have their own similar laws. Collect only what you need, protect it and use it only for the purposes customers expect.

Selling in Quebec

Quebec has its own consumer protection law with detailed rules for distance contracts, including information that must be provided before a contract, a written copy afterwards and specific cancellation rights if goods are not delivered within 30 days of the agreed date. Quebec also requires French-language product information and labelling in many cases, and its own sales tax, the QST, applies alongside GST. Sellers with Quebec customers should check these rules.

Returns and refunds

There is no general legal right in Canada to return goods simply because you changed your mind, but many sellers offer a return policy to build trust. Whatever policy you choose, state it clearly before purchase and follow it. Goods must still meet legal standards, and misleading descriptions can lead to complaints under the Competition Act and provincial law.

Marketplace rules

Each marketplace has its own rules on prohibited items, shipping times, returns and seller performance. Breaking them can lead to account suspension. Read the seller agreement and policies, and keep evidence of shipping and communication for every order.

Records to keep

The CRA generally requires business records to be kept for six years from the end of the tax year they relate to. Keep sales reports from each platform, receipts for stock and expenses, shipping records and bank statements. Good records make your T2125 straightforward and support you if the CRA asks questions.

Common mistakes

- Not tracking total sales across all platforms against the GST/HST threshold.

- Treating marketplace payouts as profit without deducting costs.

- Hiding shipping or other mandatory fees until checkout.

- Selling products that do not meet Canadian safety or labelling rules.

- Forgetting CPP contributions on self-employment income.

A starter checklist

- Decide on channels.

- Register a business name if needed.

- Set up a record system for sales and expenses.

- Write clear product descriptions, prices, shipping and refund terms.

- Check product safety and labelling rules.

- Monitor sales against the $30,000 threshold.

This article is general information about Canadian rules and is not tax or legal advice.

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