The evolution of the Internet, and more particularly the evolution of electronic commerce, is arguably the most radical force of change our economy has ever encountered. The pace at which the Internet has evolved has allowed e-commerce to go virtually unregulated since its inception. Only now have government bodies begun to react to the e-commerce phenomenon and much to the chagrin of many on-line businesses, the Government has commenced discussions on the taxation of the Internet.
Consumption taxes in Canada, such as the Goods and Services Tax (G.S.T.), the Harmonized Sales Tax (H.S.T.) and the various provincial sales taxes (P.S.T.) have traditionally been applied on the basis of residence. Subject to exceptions, if a vendor is located in Canada or any of its provinces, it is required to collect both G.S.T. and P.S.T. (or in some cases, H.S.T. alone). Although G.S.T./H.S.T. is collected by Canada Customs and Revenue Agency ("CCRA") on goods being brought across the border, it is
