It depends, you report any earnings on your Canadian GICs as interest income. When you hold GICs in a non-registered account, the interest earned is fully taxable. Since GIC earnings are considered 'interest', they're taxed at your marginal tax rate, which is the rate at which your income, other than capital gain property, is taxed.
When you have a GIC, you have the choice of holding it in a non-registered account or a registered account. With a non-registered account, the interest income you earn is fully taxable. For example, if you have a GIC for $1,000 at 2 percent interest and earn $20 in interest in the tax year, you must pay taxes on the full $20.
If you hold your GIC inside a tax-sheltered account like your Registered Retirement Savings Plan (RRSP) or Tax-Free Savings Account (TFSA), you are not required to report interest income earned on your tax return. When you cash out your GIC from your TFSA, you do not need to pay any further income tax. However, when you cash out your GIC from your RRSP, the full amount is taxable at your marginal tax rate. Also, when cashing out your GIC, withholding taxes may apply. See more information at the link below.
@Jo62
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