Shopify works well for Canadian merchants, but its defaults won’t match your business until you configure them. Tax, shipping and currency are where Canadian stores most often go wrong, and those mistakes cost money on every order. This guide walks through the settings that matter for a store based in Ontario.
It’s practical guidance, not tax advice. Confirm your registrations and obligations with your accountant.
1. Sales tax: GST/HST and provincial taxes
Do you need to register?
Under the Canada Revenue Agency’s rules, a business generally has to register for GST/HST once its taxable sales go over the $30,000 small supplier threshold, either in a single calendar quarter or over the last four consecutive calendar quarters. Below that, registering is optional (and sometimes worthwhile, so you can claim back tax on your costs). Ask your accountant.
How Canadian sales tax works for an online store
- GST is a 5% federal tax.
- HST combines GST and provincial tax into one rate in participating provinces. In Ontario, HST is 13%.
- Some provinces charge their own provincial sales tax (PST, RST or QST) separately from GST, and each has its own registration rules.
For most online sales of goods, the tax charged depends on where the customer receives the order, not where you are. That’s why an Ontario store selling to customers across Canada charges different rates on different orders.
Setting it up in Shopify
In your Shopify admin, go to Settings → Taxes and duties, choose Canada in the tax regions, and turn on tax collection. Add your GST/HST registration, and any provincial registrations you hold. Shopify then calculates the right tax for each order based on the destination.
Check three more settings while you’re there:
- Prices include tax or not: most Canadian stores show prices before tax and add it at checkout. Decide deliberately.
- Tax on shipping: make sure shipping charges are taxed correctly for your situation.
- Tax-exempt products or customers, if you have any.
2. Currency and pricing in CAD
- Set your store currency to Canadian dollars if most customers are Canadian. Changing it later after orders exist is more complicated.
- If you sell to the US, Shopify Markets lets you show prices in USD. Decide whether you’ll let them convert automatically or set fixed USD prices, and check margins at current exchange rates.
- Use rounding rules so converted prices look deliberate rather than odd.
3. Shipping from Canada
Carriers
For fulfilment locations in Canada, Shopify supports buying labels in the admin from carriers including Canada Post (domestic and international), UPS, Purolator (domestic) and DHL Express. Buying labels in Shopify saves copying addresses and can give access to discounted rates.
Rates customers see
- Flat rates are simple and predictable. Good for products of similar size.
- Calculated rates show live carrier prices. Better for varied sizes and weights.
- Free shipping thresholds work if the threshold is above your average order and covers the cost.
- Local pickup and local delivery are worth offering in your own area. For a Cambridge, Kitchener or Waterloo store, local delivery can be a real advantage over national retailers.
Weights and packaging
Calculated rates are only as good as your product weights and box sizes. Weigh products in their packaging, and set up your common box sizes.
Shipping to the United States
Cross-border rules change. As one example, Shopify’s documentation notes that from August 28, 2025, Canada Post shipments from Canada to the US must be sent Delivered Duties Paid (DDP). Check the current requirements for your carrier before you sell south of the border, and decide who pays duties: you or the customer.
4. Payments
- Set up Shopify Payments if it’s available for your business; it keeps payments inside Shopify and simplifies reconciliation.
- Confirm your payout account is a Canadian business bank account.
- Decide which wallets (such as Apple Pay and Google Pay) to enable. They reduce checkout friction on mobile.
5. Policies and legal pages
- Clear shipping, returns and refund policies, linked from the footer and the checkout.
- A privacy policy that reflects what you collect, including marketing consent.
- Your business name and contact details, so customers know who they’re buying from.
If you’ll be sending marketing emails, collect consent properly from day one. Our guide to CASL email marketing rules explains what Canadian law expects.
6. Language
If you plan to sell into Quebec, check French-language requirements and consider a French version of the store. Shopify supports multiple languages through its built-in tools and apps.
7. Before you launch: a Canadian checklist
- Tax collection on for Canada, with your registrations added.
- A test order to Ontario and one to another province, to check tax.
- A test order with shipping to a far postal code, to check rates.
- Product weights and box sizes set.
- Local pickup or delivery configured, if offered.
- Policies published and linked.
- Payouts going to the right account.
- Order confirmation emails branded and correct.
Choosing Shopify at all?
If you’re still deciding on a platform, read Shopify vs WooCommerce for Canadian retailers. If you’re moving an existing store, our Shopify migration guide covers keeping your search rankings.
Common Canadian setup mistakes
- Tax collection never switched on, so orders go out without HST and the store absorbs the cost.
- Registrations missing for provinces where you’re required to collect separate provincial tax.
- Prices set “tax included” by accident, quietly cutting margin on every order.
- Product weights left at zero, so calculated shipping charges customers almost nothing.
- Free shipping offered nationwide without checking what it costs to ship to remote postal codes.
- US prices auto-converted at a rate that no longer covers costs and duties.
- Test orders never placed before launch, so the first real customer finds the problem.
Reviewing your settings after launch
Tax rates, carrier rules and your own business change. Put a quarterly reminder in your calendar to check your tax registrations, shipping rates against real carrier invoices, and your best-selling products’ margins after fees and shipping. A few minutes every quarter catches problems before they add up.
Want it set up properly?
Our Shopify development includes payments, shipping and tax configuration as standard, with launch testing and a handover. For an existing store, run the free Shopify check, or book a Shopify Audit ($149) for a reviewed look at what to fix. Kitchener retailers can read how we work on our Kitchener page.
Written by the CHRISPS studio in Cambridge, Ontario. Tax figures are from the Canada Revenue Agency and Shopify settings from Shopify’s Help Center at the time of writing. This isn’t tax advice; confirm your obligations with an accountant.