Interest is income. When you earn interest on a GIC, it's added to your income on your tax return1.
Every year, not just at the end
With a compound GIC, you only get the interest at the end. But you still have to report the interest you earned each year1. Your bank usually sends you a T5 slip. If the interest is under $50 you may not get a slip, but you still have to report it1.
A TFSA can make it tax-free
You can buy a GIC inside a tax-free savings account (TFSA). Interest earned in a TFSA is generally tax-free, even when you take it out2. You need contribution room to put money in2.
You can also hold GICs in an RRSP or FHSA, which have their own tax rules.
This is general information, not tax advice. For your own situation, ask the Canada Revenue Agency or a tax professional.