do you pay taxes on lottery winnings in canada

In Canada, lottery winnings are not subject to income tax. Lottery prizes are considered windfalls and are tax-free, meaning winners receive the full prize amount without deductions. This rule applies to provincial lotteries such as Lotto Max and 6/49, as well as sweepstakes and charitable raffles. However, any income generated from investing those winnings, such as interest, dividends, or capital gains, is taxable. Additionally, gifting lottery winnings to others does not trigger tax, but income earned from those gifts is taxable. This tax-free status of lottery prizes is based on Canadian tax law and court rulings that define windfalls as non-taxable income.