Notice of Ways and Means Motion to Amend the Excise Act, 2001 and Other Related Legislation
That it is expedient to amend the Excise Act, 2001 and other related legislation as follows:
Tobacco Taxation
Excise Act, 2001
1 (1) Subsections 43.1(1) and (2) of the Excise Act, 2001 are replaced by the following:
Definition of inflationary adjusted year
43.1 (1) In this section, inflationary adjusted year means 2019 and every year after that year.
Annual adjustments
(2) Each rate of duty set out in sections 1 to 4 of Schedule 1 and paragraph (a) of Schedule 2 in respect of a tobacco product is to be adjusted on April 1 of an inflationary adjusted year so that the rate is equal to the greater of
(a) the rate determined by the formula
A × B
where
A is the rate of duty applicable to the tobacco product on March 31 of the inflationary adjusted year, and
B is the amount, rounded to the nearest one-thousandth, or, if the amount is equidistant from two consecutive one-thousandths, rounded to the higher one-thousandth, determined by the formula
C/D
where
C is the Consumer Price Index for the 12-month period ending on September 30 of the particular year preceding the inflationary adjusted year, and
D is the Consumer Price Index for the 12-month period ending on September 30 of the year preceding the particular year; and
(b) the rate of duty referred to in the description of A in paragraph (a).
(2) Subsection (1) is deemed to have come into force on the day after Budget Day.
2 (1) The definition adjustment day in section 58.1 of the Act is amended by striking out "or" at the end of paragraph (a) and by replacing paragraph (b) with the following:
(a.1) the day after Budget Day; or
(b) in the case of an inflationary adjusted year, April 1 of that year. (date d'ajustement)
(2) The portion of the definition taxed cigarettes in section 58.1 of the Act before paragraph (a) is replaced by the following:
taxed cigarettes of a person means cigarettes in respect of which duty has been imposed under section 42 or 53 at the rate applicable on the day before an adjustment day, and that, at the beginning of the adjustment day,
(3) Subsections (1) and (2) are deemed to have come into force on the day after Budget Day.
3 (1) Subsection 58.2(2) of the Act is replaced by the following:
Imposition of tax — 2018 increase
(1.1) Subject to section 58.3, every person shall pay to Her Majesty a tax on all taxed cigarettes of the person held at the beginning of the day after Budget Day at the rate of $0.011468 per cigarette.
Imposition of tax — inflationary adjusted years
(2) Subject to section 58.3, every person shall pay to Her Majesty a tax on all taxed cigarettes of the person held at the beginning of April 1 of an inflationary adjusted year at a rate per cigarette equal to
(a) in the case of cigarettes in respect of which duty has been imposed under section 42, the amount determined by the formula
(A – B)/5
where
A is the rate of duty applicable under section 1 of Schedule 1 for each five cigarettes on April 1 of the inflationary adjusted year, and
B is the rate of duty applicable under section 1 of Schedule 1 for each five cigarettes on March 31 of the inflationary adjusted year; and
(b) in the case of cigarettes in respect of which duty has been imposed under section 53, the amount determined by the formula
C – D
where
C is the rate of duty applicable under paragraph 1(a) of Schedule 3 per cigarette on April 1 of the inflationary adjusted year, and
D is the rate of duty applicable under paragraph 1(a) of Schedule 3 per cigarette on March 31 of the inflationary adjusted year.
(2) Subsection (1) is deemed to have come into force on the day after Budget Day.
4 (1) Subsection 58.5(1) of the Act is amended by striking out "or" at the end of paragraph (a) and by replacing paragraph (b) with the following:
(a.1) in the case of the tax imposed under subsection 58.2(1.1), the last day of the month that is two months after the month that includes Budget Day; or
(b) in the case of the tax imposed under subsection 58.2(2) in respect of an inflationary adjusted year, May 31 of the inflationary adjusted year.
(2) Subsection (1) is deemed to have come into force on the day after Budget Day.
5 (1) Subsection 58.6(1) of the Act is amended by striking out "or" at the end of paragraph (a) and by replacing paragraph (b) with the following:
(a.1) in the case of the tax imposed under subsection 58.2(1.1), the last day of the month that is two months after the month that includes Budget Day; or
(b) in the case of the tax imposed under subsection 58.2(2) in respect of an inflationary adjusted year, May 31 of the inflationary adjusted year.
(2) Subsection (1) is deemed to have come into force on the day after Budget Day.
6 (1) Subparagraphs 216(2)(a)(i) to (iv) of the Act are replaced by the following:
(i) $0.24 multiplied by the number of cigarettes to which the offence relates,
(ii) $0.24 multiplied by the number of tobacco sticks to which the offence relates,
(iii) $0.30 multiplied by the number of grams of manufactured tobacco other than cigarettes or tobacco sticks to which the offence relates, and
(iv) $0.47 multiplied by the number of cigars to which the offence relates, and
(2) Subparagraphs 216(3)(a)(i) to (iv) of the Act are replaced by the following:
(i) $0.36 multiplied by the number of cigarettes to which the offence relates,
(ii) $0.36 multiplied by the number of tobacco sticks to which the offence relates,
(iii) $0.45 multiplied by the number of grams of manufactured tobacco other than cigarettes or tobacco sticks to which the offence relates, and
(iv) $0.93 multiplied by the number of cigars to which the offence relates, and
7 Paragraphs 240(a) to (c) of the Act are replaced by the following:
(a) $0.43 per cigarette that was removed in contravention of that subsection,
(b) $0.43 per tobacco stick that was removed in contravention of that subsection, and
(c) $537.48 per kilogram of manufactured tobacco, other than cigarettes and tobacco sticks, that was removed in contravention of that subsection.
8 (1) Paragraph 1(a) of Schedule 1 to the Act is replaced by the following:
(a) $0.59634; or
(2) Subsection (1) is deemed to have come into force on the day after Budget Day.
9 (1) Paragraph 2(a) of Schedule 1 to the Act is replaced by the following:
(a) $0.11927; or
(2) Subsection (1) is deemed to have come into force on the day after Budget Day.
10 (1) Paragraph 3(a) of Schedule 1 to the Act is replaced by the following:
(a) $7.45425; or
(2) Subsection (1) is deemed to have come into force on the day after Budget Day.
11 (1) Paragraph 4(a) of Schedule 1 to the Act is replaced by the following:
(a) $25.95832; or
(2) Subsection (1) is deemed to have come into force on the day after Budget Day.
12 (1) Subparagraph (a)(i) of Schedule 2 to the Act is replaced by the following:
(i) $0.09331, or
(2) Paragraph (b) of Schedule 2 to the Act is replaced by the following:
(b) the amount obtained by multiplying the sale price, in the case of cigars manufactured in Canada, or the duty-paid value, in the case of imported cigars, by 88%.
(3) Subsections (1) and (2) are deemed to have come into force on the day after Budget Day.
Economic Action Plan 2014 Act, No. 1
13 Subsection 76(5) of the Economic Action Plan 2014 Act, No. 1 is replaced by the following:
(5) Subsections (2) and (4) come into force on April 1, 2019.
14 Subsection 78(3) of the Act is replaced by the following:
(3) Subsection (2) comes into force on April 1, 2019.
15 Subsection 79(4) of the Act is replaced by the following:
(4) Subsection (2) comes into force on April 1, 2019.
16 Subsection 80(4) of the Act is replaced by the following:
(4) Subsection (2) comes into force on April 1, 2019.
17 Subsection 81(4) of the Act is replaced by the following:
(4) Subsection (2) comes into force on April 1, 2019.
Economic Action Plan 2014 Act, No. 2
18 Subsection 100(4) of the Economic Action Plan 2014 Act, No. 2 is replaced by the following:
(4) Subsection (2) comes into force on the day after Budget Day.
19 Subsection 101(2) of the Act is replaced by the following:
(2) Subsection (1) comes into force on the day after Budget Day.
Budget Implementation Act, 2017, No. 1
20 Subsections 45(3) and (5) of the Budget Implementation Act, 2017, No. 1 are repealed.
Application
21 For the purposes of applying the provisions of the Customs Act that provide for the payment of, or the liability to pay, interest in respect of any amount, the amount is to be determined and interest is to be computed on it as though paragraphs 1(a), 2(a), 3(a), 4(a) of Schedule 1 to the Excise Act, 2001, as enacted by sections 8 to 11, and subparagraph (a)(i) and paragraph (b) of Schedule 2 to the Excise Act, 2001, as enacted by section 12, had been assented to on the day after Budget Day.
Cannabis Taxation
22 The Excise Act, 2001 and related legislative texts are modified to give effect to the proposals relating to the excise duty framework for cannabis products as described in the release by the Minister of Finance on November 10, 2017 and subsequently in the budget documents tabled by the Minister of Finance in the House of Commons on Budget Day.
- Date modified: