Are Lottery Winnings Taxable in Canada?

In Canada, lottery winnings are generally treated as windfalls and are not taxable income. If you win a $1 million Lotto 6/49 prize, you receive the full advertised amount. This is general information, not tax advice — speak to an accountant for your situation.

What is taxed

• Interest earned once the winnings are invested in a savings account or GIC
• Dividends and capital gains from investing the money
• Rental income from property bought with the winnings
• Lottery winnings won in the United States, which can have US withholding tax deducted before payment

Life-annuity prizes

Prizes paid over time, such as Daily Grand's $1,000 a day for life, are lottery winnings and generally not taxed as income in Canada, though choosing between the annuity and the lump sum has investment implications worth reviewing with a professional.

Gifting part of a win

Canada has no gift tax, so sharing winnings with family is generally not taxed. Income those gifts later earn can be attributed back to you in some cases (for example gifts to a spouse or minor children), so get advice before moving large sums.

Group wins

If a group wins, the operator can pay each member directly when a signed group claim form is submitted. A written pool agreement makes this simpler — see our lottery pool agreement guide.