If you have a T5, an amount in Box 13 would be
taxable. Interest that is refunded and not used toward a non-prepaid funeral
expense (flowers, reception, etc…) is subject to taxation.
The sales tax should have been refunded to you
when you got your money back. However, since they charged a fee (penalty) for
cancelling the contract, they likely charged sales tax on that fee, which is
why you didn’t get the full sales tax back from your original purchase. If that
is the case, there is no way to recover the sales tax amount.
