Canada ends nonresident tax refunds for many

Trips to Canada have become more expensive for many visitors after the Canadian government recently abolished a tax refund for nonresidents.

Visitors had been able to claim a refund of the 6 percent GST, a federal tax on lodging and other goods and services.

The Canadian government recently abolished the GST refund (formally called the Visitor Rebate Program) for individual travelers as part of 2007 budget cuts.

After protests from the tourism industry, both in Canada and abroad, a new rebate program will give GST refunds to convention organizers and individuals purchasing a tour package. However, travelers who book hotels on their own will no longer be able to get the GST refunded.

The Canadian government estimated it would save about $70 million in refunds and administrative costs by abolishing the rebates, and said only a small proportion of visitors ever bothered to claim the GST refund.