In Canada, the federal government raises revenue through various

sources, including:

1.Income taxes: This is the largest source of revenue for the federal
government. It includes personal income tax, corporate income tax, and
other taxes on income. Income tax in Canada makes up the largest
portion of the federal government’s revenue. In fact, it generally
funds almost half of the federal government’s budget. Both Corporate
tax and Sales tax each account for about fifteen percent of the
federal government’s revenues follows:

Income Tax System

Canadian taxation is based on your residency and runs from January

1st to December 31st. If you are residing in Canada you should file a
tax return each year by the deadline of April 30th. You are required
to include income earned both inside and outside of Canada. If you are
living outside of Quebec you must file one tax return which will
include provincial and federal taxes.

Property Tax System

Property tax is a tax on an asset. If you own a home in Canada, you

will need to pay property tax on it. Similar to other tax programs in
Canada, the amount you pay will vary by location. Property tax is
collected on a local level. Although no one enjoys paying taxes,
property taxes cover several services including water, snow removal,
garbage collection, policing, and fire protection.

Corporate Tax System

Corporations in Canada, including non-profits and inactive

corporations, pay tax on both profits and on capital. Corporate taxes
are levied at the federal level, as well as the provincial level. The
corporate tax rate therefore varies not only by the type and size of
the corporation, but also by its province of operation.
Sales Tax System

Canadians are also taxed on the consumption of most consumer goods

and services. The federal government’s Goods and Services Tax (GST)
and provincial governments’ Provincial Sales Tax (PST) are both
applied to the majority of goods and services consumed in Canada.

2.Goods and Services Tax (GST): This is a value-added tax (VAT) levied
on most goods and services sold in Canada. The GST is a federal tax
levied at a rate of 5% on the supply of most property and services
made in Canada. Examples of zero-rated supplies include basic
groceries, medical and assistive devices, prescription drugs, feminine
hygiene products, agriculture and fishing, and most international
freight and passenger transportation services.

Generally, registrants charge GST on their sales and pay GST on their
purchases, and either remit or claim a refund for the amount of net
tax reported (i.e. the difference between the GST charged and the GST
paid). Suppliers are entitled to claim input tax credits for the GST
paid or payable on expenses incurred relating to making fully taxable
and zero-rated supplies (i.e. commercial activity), but not on
expenses relating to the making of tax-exempt supplies.

3. Excise taxes: When goods are made in Canada, excise tax is payable
when the goods are delivered to the buyer. When they are imported,
excise tax is payable by the importer, at the time the goods were
imported. Under certain circumstances, you may be able to claim a
refund of the excise taxes you paid.Canada imposes excise taxes on a
variety of goods, including alcohol, tobacco, and cannabis products.
Excise taxes are a type of consumption tax that is typically included
in the price of the product and paid by the manufacturer, producer, or
importer.Example In Canada, excise taxes are levied on all types of
alcohol, including beer, wine, and spirits. The amount of tax varies
based on the alcohol content and the size of the container.
4.Custom duties: These are taxes on imported goods. Any item mailed to
Canada may be subject to the Goods and Services Tax (GST) and/or duty.
Unless specifically exempted, you must pay the 5% GST on items you
import into Canada by mail. The CBSA calculates any duties owing based
on the value of the goods in Canadian funds. The duty rates vary
according to the type of goods you are importing and the country from
which they came or were made in. Depending on the goods or their
value, some other taxes may apply, such as excise duty or excise tax
on luxury items.
In general, a central bank is in charge of managing monetary policy,
which deals with interest rates and the amount of money in
circulation. Fiscal policy is concerned with taxation and government
expenditure, and it is typically governed by legislation. Canada's
fiscal strategy focuses on wise, targeted investments that will aid in
creating the circumstances essential to support economic growth and
increase the middle class. The government has said that fiscal policy
has a vital role in providing greater economic growth now and in
boosting the economy's growth potential over the long term, while
keeping Canada's low debt edge.

Monetary actions typically take six to eight quarters to make

their way through the economy and have a full impact on inflation. As
a result, monetary policy is always forward-looking, with policy rates
set based on the Bank's assessment of where inflation is expected to
be in the future rather than where it is now. The Bank changes (raises
or lowers) its main policy rate to reach the inflation objective. If
inflation exceeds the Bank's objective, the policy rate may be raised.
This encourages financial institutions to raise interest rates on
loans and mortgages, discouraging borrowing and spending and
alleviating price pressures. If inflation falls below the Bank's
objective, it may cut the policy rate to encourage financial
institutions to lower interest rates on loans and mortgages, so
stimulating economic activity. In other words, the Bank is equally
concerned about inflation exceeding or falling below the objective.
Such a strategy protects against both excessive inflation and chronic
deflation.

Canada's floating currency, or flexible exchange rate, enables us

to conduct an independent monetary policy that is best suited to
Canada's economic conditions and is focused on reaching the inflation
objective. Exchange rate movements also serve as a "buffer," allowing
our economy to absorb and respond to external and internal shocks.
 Figure 1. Federal of Government Building

In federal government, it involves other agencies/ departments such

as: Senate and the House of Commons. It also include their prime
minister, cabinet, ministries & territories. Federal government system
is one can brings many different communities with one common
government for common purposes and separate “state” or “provincial”
governments for each of their communities.

Therefore, we have our federal government also known as Parliament

that works in Ottawa and our provincial government (legislatures)that
works outs the capital city of their provinces. There are three
branches of government in Canada: executive,legislative and judiciary.

Figure 2. The Parliament of Canada

 Structures in Ottawa, Ontario, Canada that house the Canadian
Parliament (the Senate and House of Commons). The Gothic Revival-style
buildings were officially opened on June 6, 1866, nearly a year before
Canada's Confederation. A fire destroyed everything but the Library of
Parliament on February 3, 1916. Later that year, reconstruction
commenced and was finished in 1927.

The Parliament Buildings, the seat of Canada's federal government,

are magnificent and visually appealing buildings set on a promontory
overlooking the Ottawa River.

Figure 3. Bank Of Canada

Our head office of Canada known as for its unique

architectural representing the balance between modern and
classical. Located at the corner of Wellington, Bank and Sparks
Streets. The Bank of Canada is a unique form of Crown enterprise,
owned by the federal government but with significant autonomy in
carrying out its obligations. The Governor and Senior Deputy
Governor are appointed by the Board of Directors of the Bank
(with Cabinet approval), not by the federal government.
 Figure 4. Department of Finance Canada

The Department of Finance Canada is responsible to taking taxes

and all the budget that Canadian can might benefits it. In
addition, they are in charge of the general stewardship of the
Canadian economy. This involves crafting the yearly federal
budget, advising the government on economic and fiscal concerns,
tax and tariff policies, social measures, security challenges,
financial stability, and Canada's foreign commitments.

Figure 5. Treasury Board of Canada Secretariat

 The Secretariat of the Treasury Board of Canada advises and
gives recommendations to the Treasury Board committee of
ministers on how the government spends money on programs and
services, regulates, and manages. The Secretariat assists in
ensuring that tax money is utilized wisely and effectively for
the benefit of Canadians.