Notice of Ways and Means Motions
Notice of Ways and Means Motion to amend the Excise Tax Act, the Excise Act, 2001 and Other Tax Legislation
That it is expedient to amend the Excise Tax Act, the Excise Act, 2001 and other tax legislation as follows:
Restricting the Relief of Excise Tax on Diesel and Aviation Fuel
Heating Oil
1 (1) Subsection 2(1) of the Excise Tax Act is amended by adding the following in alphabetical order:
heating oil means any fuel oil that is consumed exclusively for providing heat to a home, building or similar structure and that is not consumed for generating heat in an industrial process, including any commercial process that involves removing moisture from a good.
(2) Subsection (1) comes into force, or is deemed to have come into force, on July 1, 2016.
(3) In respect of fuel oil that is delivered to a purchaser or imported, as heating oil, before July 2016, in respect of which no tax was imposed, levied or collected under subsection 23(1) of the Act at the time of delivery or importation and that is not intended for use, or not used, after June 2016, as heating oil, within the meaning of that term if the definition heating oil in subsection 2(1) of the Act, as enacted by subsection (1), had been in force at the time of delivery or importation, subsection 23(9.1) of the Act is to be read as follows:
(9.1) Where fuel other than aviation gasoline has been purchased or imported for a use for which the tax imposed under this Part on diesel fuel was not payable before July 2016 and the purchaser or importer sells or appropriates the fuel after June 2016 for a purpose for which the fuel could not have been purchased or imported after June 2016 without payment of the tax imposed under this Part on the fuel, the tax imposed under this Part on the diesel fuel shall be payable by the person who sells or appropriates the fuel
(a) where the fuel is sold, at the time of delivery to the purchaser; and
(b) where the fuel is appropriated, at the time of that appropriation.
(4) In respect of diesel fuel that is delivered to a purchaser after Budget Date but before July 2016, subparagraphs 68.01(1)(a)(i) and (ii) of the Act are to be read as follows:
(i) to the vendor, if the vendor applies for the payment, the purchaser certifies that the diesel fuel is either for use exclusively, before July 2016, as heating oil, or for use exclusively, after June 2016, as heating oil, within the meaning of that term if the definition heating oil in subsection 2(1) of the Act, as enacted by subsection 1(1) of this ways and means motion, had been in force at the time of delivery and the vendor reasonably believes that the purchaser will use it exclusively as the purchaser has certified,
(ii) to the purchaser, if the purchaser applies for the payment, the purchaser uses, before July 2016, the diesel fuel as heating oil, or uses, after June 2016, the diesel fuel as heating oil, within the meaning of that term if the definition heating oil in subsection 2(1) of the Act, as enacted by subsection 1(1) of this ways and means motion, had been in force at the time of delivery and no application in respect of the diesel fuel can be made by the vendor under subparagraph (i); or
Generation of Electricity
2 (1) Paragraph 23(8)(c) of the Act is replaced by the following:
(c) diesel fuel for use in the generation of electricity, unless the diesel fuel is used in or by a vehicle, including a conveyance attached to the vehicle, of any mode of transportation.
(2) Subsection (1) applies to diesel fuel delivered to a purchaser, or imported, after June 2016.
(3) In respect of diesel fuel that is delivered to a purchaser, or imported, before July 2016, in respect of which no tax was imposed, levied or collected under subsection 23(1) of the Act at the time of delivery or importation and that is used after June 2016 in the generation of electricity in or by a vehicle, including a conveyance attached to the vehicle, of any mode of transportation, subsection 23(9.1) of the Act is to be read as follows:
(9.1) Where fuel other than aviation gasoline has been purchased or imported for a use for which the tax imposed under this Part on diesel fuel or aviation fuel was not payable before July 2016 and the purchaser or importer sells or appropriates the fuel after June 2016 for a purpose for which the fuel could not have been purchased or imported after June 2016 without payment of the tax imposed under this Part on the fuel, the tax imposed under this Part on diesel fuel or aviation fuel shall be payable by the person who sells or appropriates the fuel
(a) where the fuel is sold, at the time of delivery to the purchaser; and
(b) where the fuel is appropriated, at the time of that appropriation.
3 (1) Paragraph 68.01(1)(b) of the Act is replaced by the following:
(b) to a purchaser who applies for the payment and who uses the diesel fuel to generate electricity, unless the diesel fuel is used in or by a vehicle, including a conveyance attached to the vehicle, of any mode of transportation.
(2) Subsection (1) applies in respect of diesel fuel used after June 2016.
Enhancing Certain Security and Collection Provisions in the Excise Act, 2001
Security Provisions
4 (1) Paragraph 5(1)(b) of the Regulations Respecting Excise Licences and Registrations is replaced by the following:
(b) in the case of a tobacco licence, be sufficient to ensure payment of the amount of duty referred to in paragraph 160(b) of the Act up to a maximum amount of $5 million.
(2) Subsection (1) comes into force on the later of the day that is 3 months after Budget Date, and the day on which the legislation enacting section 6 receives royal assent.
5 (1) Subsection 4.1(2) of the Stamping and Marking of Tobacco Products Regulations is replaced by the following:
(2) Subject to subsection (3), if the amount referred to in paragraph (1)(a) is greater than $5 million, the amount of security for the purpose of subsection 25.1(3) of the Act is $5 million.
(2) Subsection (1) comes into force on the later of the day that is 3 months after Budget Date, and the day on which the legislation enacting section 6 receives royal assent.
Collection Provisions
6 (1) The Excise Act, 2001 is amended by adding the following after section 286:
Over $10,000,000 — security
286.1 (1) The Minister may, by sending a notice to a person, require security in a form satisfactory to the Minister and in an amount up to a specified amount that is the greater of $0 and the amount that is determined by the formula
(A/2) – B – $10,000,000
where
A is the total of all amounts, each of which is
(a) an amount that the person has been assessed under this Act in respect of which a portion remains unpaid, or
(b) a penalty that the person is liable to pay under this Act in respect of which a portion remains unpaid; and
B is the greater of $0 and the amount that is determined by the formula
C – (D/2)
where
C is the total of all amounts that the person has paid against the amount determined for A in the first formula in this subsection, and
D is the amount determined for A in the first formula in this subsection.
When security to be furnished
(2) The security required under subsection (1) shall be furnished to the Minister no later than 60 days following the day on which the Minister required the security.
Types of security
(3) The types of security acceptable for the purpose of subsection (1) are those types of security that are acceptable for the purposes of paragraph 23(3)(b).
Failure to comply
(4) Despite subsections 286(1) to (7), the Minister may collect an amount equivalent to the amount of security that was required under subsection (1) if the security required under that subsection is not furnished to the Minister as set out in this section.
(2) Subsection (1) applies to amounts that a person has been assessed, and penalties for which a person becomes liable, after the day on which the enacting legislation receives royal assent.