39. At a Montreal café, you order a cup of coffee that costs CAD $2.10, plus tax. Coffee in Quebec is subject to a 5% federal plus a 9.975% provincial sales tax. You hand the barista a toonie and a loonie. How much change will you receive?
Answer to Canada Quiz #39
A toonie (two dollar coin) plus a loonie (one dollar coin) amount to a payment of $3.00.
5% federal sales tax (Taxe sur les produits et services or TPS) = .05 x 2.10 = $0.105
Tie goes to the Crown, so TPS is rounded up to 11 cents.
9.975 provincial sales tax (Taxe de vente du Québec or TVQ) = .09975 x 2.10 = $0.209, which gets rounded up to 21 cents.
So the cost of the coffee plus tax amounts to $2.10 + .11 + .21 = $2.42.
In 2012 the Canadian government initiated a plan to eliminate its one cent coin, and on February 4, 2013, the last Canadian penny was minted.
The government’s policy since that date has been that cash transactions should be rounded up or down to the nearest 5-cent increment.
Therefore, the price of the cup of coffee is rounded to the nearest nickel, or down to $2.40.
This results in change of $0.60.
- Sales Taxes in Canada, Wikipedia
- Phasing out the penny from circulation, mint.ca
- Calculating the taxes, Revenu Québec
- Man comes out 89 cents richer after year of penny-rounding, CBC News