Archived - Legislative and Regulatory Proposals Relating to the Taxation of Cannabis
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Excise Act, 2001
1 (1) The definition container in section 2 of the Excise Act, 2001 is replaced by the following:
container, in respect of a tobacco product or a cannabis product, means a wrapper, package, carton, box, crate, bottle, vial or other container that contains the tobacco product or cannabis product. (contenant)
(2) The definition excise stamp in section 2 of the Act is replaced by the following:
excise stamp means a tobacco excise stamp or a cannabis excise stamp. (timbre d'accise)
(3) The definition stamped in section 2 of the Act is replaced by the following:
stamped means
(a) in respect of a tobacco product, that a tobacco excise stamp, and all prescribed information in a prescribed format in respect of the tobacco product, are stamped, impressed, printed or marked on, indented into or affixed to the tobacco product or its container in the prescribed manner to indicate that duty, other than special duty, has been paid on the tobacco product; and
(b) in respect of a cannabis product, that a cannabis excise stamp, and all prescribed information in a prescribed format in respect of the cannabis product, are stamped, impressed, printed or marked on, indented into or affixed to the cannabis product or its container in the prescribed manner to indicate that duty has been paid on the cannabis product. (estampillé)
(4) The definition take for use in section 2 of the Act is replaced by the following:
take for use means
(a) in respect of alcohol, to consume, analyze or destroy alcohol or to use alcohol for any purpose that results in a product other than alcohol; and
(b) in respect of a cannabis product, to consume, analyze or destroy the cannabis product. (utilisation pour soi)
(5) Paragraph (a) of the definition packaged in section 2 of the Act is replaced by the following:
(a) in respect of raw leaf tobacco, a tobacco product or a cannabis product, packaged in a prescribed package; or
(6) The definition produce in section 2 of the Act is amended by striking out "or" at the end of paragraph (a), by adding "or" at the end of paragraph (b) and by adding the following after paragraph (b):
(c) in respect of a cannabis product, has the same meaning as in subsection 2(1) of the Cannabis Act and also includes packaging the cannabis product. (production)
(7) Section 2 of the Act is amended by adding the following in alphabetical order:
additional cannabis duty means a duty imposed under section 158.2 or 158.22. (droit additionnel sur le cannabis)
cannabis has the same meaning as in subsection 2(1) of the Cannabis Act. (cannabis)
cannabis duty means a duty imposed under section 158.19 or 158.21. (droit sur le cannabis)
cannabis excise stamp means a stamp that is issued by the Minister under subsection 158.03(1) and that has not been cancelled under section 158.07. (timbre d'accise de cannabis)
cannabis licensee means a person that holds a cannabis licence issued under section 14. (titulaire de licence de cannabis)
cannabis plant has the same meaning as in subsection 2(1) of the Cannabis Act. (plante de cannabis)
cannabis product means
(a) a product that is cannabis but that is not industrial hemp produced or imported in accordance with the Cannabis Act or the Industrial Hemp Regulations;
(b) a product that is an industrial hemp by-product; or
(c) anything that is made with or contains a product described by paragraph (a) or (b). (produit du cannabis)
dutiable amount, in respect of a cannabis product, means the amount determined by the formula
A × [100% / (100% + B + C)]
where
A is the total of the following amounts that the purchaser is liable to pay to the vendor by reason of or in respect of the sale of the cannabis product:
(a) the consideration, as determined for the purposes of Part IX of the Excise Tax Act, for the cannabis product,
(b) any additional consideration, as determined for the purposes of that Part, for the container in which the cannabis product is contained, and
(c) any amount of consideration, as determined for the purposes of that Part, that is in addition to the amounts referred to in paragraphs (a) and (b), whether payable at the same or any other time, including, but not limited to, any amount charged for or to make provision for advertising, financing, commissions or any other matter;
B is the percentage set out in section 2 of Schedule 7; and
C is
(a) if additional cannabis duty in respect of a specified province is imposed on the cannabis product, the prescribed percentage in respect of the specified province, or
(b) in any other case, 0%. (somme passible de droits)
flowering material means the whole or any part (other than viable seeds) of an inflorescence of a cannabis plant at any stage of development, including the infructescence stage of development. (matière florifère)
industrial hemp means cannabis that is industrial hemp for the purposes of the Cannabis Act or the Industrial Hemp Regulations. (chanvre industriel)
industrial hemp by-product means flowering material (other than viable achenes) or non-flowering material that has been removed or separated from an industrial hemp plant and that has not
(a) been disposed of by retting or by otherwise rendering it into a condition such that it cannot be used for any purpose not permitted under the Controlled Drugs and Substances Act; or
(b) been disposed of in a similar manner under the Cannabis Act. (sous-produit de chanvre industriel)
industrial hemp grower means a person that holds a licence or permit under the Controlled Drugs and Substances Act or the Cannabis Act authorizing the person to produce industrial hemp plants. (producteur de chanvre industriel)
industrial hemp plant means a cannabis plant, including a seedling, that is industrial hemp. (plante de chanvre industriel)
non-flowering material means any part of a cannabis plant other than flowering material, viable seeds and a part of the plant referred to in Schedule 2 of the Cannabis Act. (matière non florifère)
specified province means a prescribed province. (province déterminée)
tobacco excise stamp means a stamp that is issued by the Minister under subsection 25.1(1) and that has not been cancelled under section 25.5. (timbre d'accise de tabac)
vegetative cannabis plant means a cannabis plant, including a seedling, that has not yet produced reproductive structures, including flowers, fruits or seeds. (plante de cannabis à l'état végétatif)
viable seed means a viable seed of a cannabis plant that is not an industrial hemp plant. (graine viable)
2 (1) Subsection 5(1) of the Act is replaced by the following:
Constructive possession
5 (1) For the purposes of section 25.2, subsections 25.3(1), 30(1), 32(1) and 32.1(1), section 61, subsections 70(1) and 88(1), section 158.04, subsections 158.05(1) and 158.11(1), sections 230 and 231 and subsection 238.1(1), if one of two or more persons, with the knowledge and consent of the rest of them, has anything in the person's possession, it is deemed to be in the custody and possession of each and all of them.
(2) The portion of subsection 5(2) of the Act before paragraph (a) is replaced by the following:
Meaning of possession
(2) In this section and in section 25.2, subsections 25.3(1), 30(1), 32(1) and 32.1(1), section 61, subsections 70(1) and 88(1), section 158.04 and subsections 158.05(1), 158.11(1) and 238.1(1), possession means not only having in one's own personal possession but also knowingly
3 Section 14 of the Act is amended by adding the following after subsection (1):
Cannabis licence
(1.1) Subject to the regulations, on application, the Minister may issue to a person a cannabis licence for the purposes of this Act.
Cannabis licence — effect
(1.2) A cannabis licence issued to a person shall not have effect before a licence or permit issued to the person under subsection 62(1) of the Cannabis Act comes into effect.
4 (1) Subsection 23(2.1) of the Act is amended by deleting "or" at the end of paragraph (a) and by adding the following after paragraph (a):
(a.1) in the case of a cannabis licence, a licence or permit issued to the person under subsection 62(1) of the Cannabis Act is amended, suspended or revoked; or
(2) Paragraph 23(3)(b) of the Act is replaced by the following:
(b) shall, in the case of a spirits licence, a tobacco licence or a cannabis licence, require security in a form satisfactory to the Minister and in an amount determined in accordance with the regulations; and
5 The Act is amended by adding the following after section 158:
PART 4.1
Cannabis
Exclusions
Non-application
158.01 This Part does not apply to
(a) cannabis products that are produced in Canada by an individual for the personal use of the individual and in accordance with the Cannabis Act, but only to the extent that those cannabis products are used in activities that are not prohibited for those cannabis products under that Act;
(b) cannabis products that are produced in Canada by an individual for their medical purposes and in accordance with the Controlled Drugs and Substances Act or the Cannabis Act, but only to the extent that those cannabis products are used by the individual in activities that are not prohibited for those cannabis products under one of those Acts; or
(c) cannabis products that are produced in Canada by a designated person — being an individual who is authorized under the Controlled Drugs and Substances Act or the Cannabis Act to produce cannabis for the medical purposes of another individual — for the medical purposes of the other individual and in accordance with one of those Acts, but only to the extent that those cannabis products are used by the designated person or the other individual in activities that are not prohibited for those cannabis products under one of those Acts.
Cannabis Production and Stamping
Production without licence prohibited
158.02 (1) No person shall, other than in accordance with a cannabis licence issued to the person, produce cannabis products.
Deemed producer
(2) A person that, whether for consideration or otherwise, provides or offers to provide in their place of business equipment for use in that place by another person in the production of a cannabis product is deemed to be producing the cannabis product and the other person is deemed not to be producing the cannabis product.
Exception
(3) Subsection (1) does not apply in respect of
(a) the production of industrial hemp by-products by an industrial hemp grower; and
(b) a prescribed person that produces cannabis products in prescribed circumstances or for a prescribed purpose.
Issuance of cannabis excise stamps
158.03 (1) On application in the prescribed form and manner, the Minister may issue, to a cannabis licensee, stamps the purpose of which is to indicate that cannabis duty and, if applicable, additional cannabis duty have been paid on a cannabis product.
Quantity of cannabis excise stamps
(2) The Minister may limit the quantity of cannabis excise stamps that may be issued to a person under subsection (1).
Security
(3) No person shall be issued a cannabis excise stamp unless the person has provided any security required by regulation in a form satisfactory to the Minister.
Supply of cannabis excise stamps
(4) The Minister may authorize a producer of cannabis excise stamps to supply, on the direction of the Minister, cannabis excise stamps to a person to which those stamps are issued under subsection (1).
Design and construction
(5) The design and construction of cannabis excise stamps shall be subject to the approval of the Minister.
Counterfeiting cannabis excise stamps
158.04 No person shall produce, possess, sell or otherwise supply, or offer to supply, without lawful justification or excuse the proof of which lies on the person, anything that is intended to resemble or pass for a cannabis excise stamp.
Unlawful possession of cannabis excise stamps
158.05 (1) No person shall possess a cannabis excise stamp that has not been affixed to a packaged cannabis product in the manner prescribed for the purposes of the definition stamped in section 2 to indicate that duty has been paid on the cannabis product.
Exceptions — possession
(2) Subsection (1) does not apply to the possession of a cannabis excise stamp by
(a) the person that lawfully produced the cannabis excise stamp;
(b) the person to which the cannabis excise stamp is issued; or
(c) a prescribed person.
Unlawful supply of cannabis excise stamps
158.06 No person shall dispose of, sell or otherwise supply, or offer to supply, a cannabis excise stamp otherwise than in accordance with this Act.
Cancellation, return and destruction of cannabis excise stamps
158.07 The Minister may
(a) cancel a cannabis excise stamp that has been issued; and
(b) direct that it be returned or destroyed in a manner specified by the Minister.
Unlawful packaging or stamping
158.08 No person shall package or stamp a cannabis product unless the person is a cannabis licensee or a prescribed person.
Unlawful removal
158.09 (1) Except as permitted under section 158.15, no person shall remove a cannabis product from the premises of a cannabis licensee unless it is packaged and
(a) if the cannabis product is intended for the duty-paid market,
(i) it is stamped to indicate that cannabis duty has been paid, and
(ii) if additional cannabis duty in respect of a specified province is imposed on the cannabis product, it is stamped to indicate that the additional cannabis duty has been paid; or
(b) if the cannabis product is not intended for the duty-paid market, all prescribed information is printed on or affixed to its container in a prescribed manner.
Exception
(2) Subsection (1) does not apply to a cannabis licensee that removes from their premises a cannabis product
(a) for delivery to another cannabis licensee;
(b) for export as permitted under the Cannabis Act;
(c) for delivery to a person for analysis or destruction in accordance with paragraph 158.29(e); or
(d) in prescribed circumstances or for a prescribed purpose.
Prohibition — cannabis for sale
158.1 No person shall purchase or receive for sale
(a) a cannabis product from a producer that the person knows, or ought to know, is not
(i) a cannabis licensee, or
(ii) in the case of an industrial hemp by-product, an industrial hemp grower;
(b) a cannabis product that is required under this Act to be packaged and stamped unless it is packaged and stamped in accordance with this Act; or
(c) a cannabis product that the person knows, or ought to know, is fraudulently stamped.
Selling, etc., unstamped cannabis
158.11 (1) No person, other than a cannabis licensee, shall dispose of, sell, offer for sale, purchase or have in their possession a cannabis product unless
(a) it is packaged;
(b) it is stamped to indicate that cannabis duty has been paid; and
(c) if additional cannabis duty in respect of a specified province is imposed on the cannabis, it is stamped to indicate that the additional cannabis duty has been paid.
Selling, etc., unstamped cannabis — specified province
(2) No person, other than a cannabis licensee, shall dispose of, sell, offer for sale, purchase or have in their possession a cannabis product in a specified province unless it is stamped to indicate that additional cannabis duty in respect of the specified province has been paid.
Exception — possession of cannabis
(3) Subsections (1) and (2) do not apply to the possession of a cannabis product by
(a) a prescribed person that is transporting the cannabis product under prescribed circumstances and conditions;
(b) an individual if the cannabis product was imported for their medical purposes in accordance with the Controlled Drugs and Substances Act or the Cannabis Act;
(c) a person that possesses the cannabis product for analysis or destruction in accordance with paragraph 158.29(e); or
(d) a prescribed person that possesses the cannabis product in prescribed circumstances or for a prescribed purpose.
Exception — disposal, sale, etc.
(4) Subsections (1) and (2) do not apply to the disposal, sale, offering for sale or purchase of a cannabis product by a prescribed person in prescribed circumstances or for a prescribed purpose.
Exception — industrial hemp
(5) Subsections (1) and (2) do not apply to
(a) the possession of an industrial hemp by-product by the industrial hemp grower that produced it, if the industrial hemp by-product
(i) is on the industrial hemp grower's property, or
(ii) is being transported by the industrial hemp grower for delivery to or return from a cannabis licensee; and
(b) the disposal, sale or offering for sale of an industrial hemp by-product to a cannabis licensee by the industrial hemp grower that produced it.
Sale or distribution by a licensee
158.12 (1) No cannabis licensee shall distribute a cannabis product or sell or offer for sale a cannabis product to a person unless
(a) it is packaged;
(b) it is stamped to indicate that cannabis duty has been paid; and
(c) if additional cannabis duty in respect of a specified province is imposed on the cannabis product, it is stamped to indicate that the additional cannabis duty has been paid.
Exception
(2) Subsection (1) does not apply to the distribution, sale or offering for sale of a cannabis product
(a) to a cannabis licensee;
(b) to another person if the cannabis product is exported by the cannabis licensee in accordance with the Cannabis Act; or
(c) to a prescribed person in prescribed circumstances or for a prescribed purpose.
Packaging and stamping of cannabis
158.13 A cannabis licensee that produces a cannabis product shall not enter the cannabis product into the duty-paid market unless
(a) the cannabis product has been packaged by the licensee;
(b) the package has printed on it prescribed information;
(c) the cannabis product is stamped at the time of packaging to indicate that cannabis duty has been paid; and
(d) if additional cannabis duty in respect of a specified province is required to be paid on the cannabis product, the cannabis product is stamped at the time of packaging to indicate that the additional cannabis duty has been paid.
Notice — absence of stamping
158.14 (1) The absence on a cannabis product of stamping that indicates that cannabis duty has been paid is notice to all persons that cannabis duty has not been paid on the cannabis product.
Notice — absence of stamping
(2) The absence on a cannabis product of stamping that indicates that additional cannabis duty in respect of a specified province has been paid is notice to all persons that additional cannabis duty in respect of the specified province has not been paid on the cannabis product.
Cannabis — waste removal
158.15 (1) No person shall remove a cannabis product that is waste from the premises of a cannabis licensee other than the cannabis licensee or a person authorized by the Minister.
Removal requirements
(2) If a cannabis product that is waste is removed from the premises of a cannabis licensee, it shall be dealt with in the manner authorized by the Minister.
Re-working or destruction of cannabis
158.16 A cannabis licensee may re-work or destroy a cannabis product in the manner authorized by the Minister.
Responsibility for Cannabis
Responsibility
158.17 Subject to section 158.18, a person is responsible for a cannabis product at any time if
(a) the person is
(i) the cannabis licensee that owns the cannabis product at that time, or
(ii) if the cannabis product is not owned at that time by a cannabis licensee, the cannabis licensee that last owned it; or
(b) the person is a prescribed person or a person that meets prescribed conditions.
Person not responsible
158.18 A person that is responsible for a cannabis product ceases to be responsible for it if
(a) it is packaged and stamped and the duty on it is paid;
(b) it is taken for use and the duty on it is paid;
(c) it is taken for use in accordance with section 158.29;
(d) it is exported in accordance with the Cannabis Act;
(e) it is lost in prescribed circumstances, if the person fulfills any prescribed conditions; or
(f) prescribed conditions are met.
Imposition and Payment of Duty on Cannabis
Imposition — flat-rate duty
158.19 (1) Duty is imposed on cannabis products produced in Canada at the time they are packaged in the amount determined under section 1 of Schedule 7.
Imposition — ad valorem duty
(2) Duty is imposed on cannabis products produced in Canada at the time of their delivery to a purchaser in the amount determined under section 2 of Schedule 7.
Duty payable
(3) The greater of the duty imposed under subsection (1) and the duty imposed under subsection (2) is payable by the cannabis licensee that packaged the cannabis products at the time of their delivery to a purchaser and the cannabis products are relieved of the lesser of those duties.
Equal duties
(4) If the amount of duty imposed under subsection (1) is equal to the amount of duty imposed under subsection (2), the duty imposed under subsection (1) is payable by the cannabis licensee that packaged the cannabis products at the time of their delivery to a purchaser and the cannabis products are relieved of the duty imposed under subsection (2).
Imposition — additional cannabis duty
158.2 (1) In addition to the duty imposed under section 158.19, a duty in respect of a specified province is imposed on cannabis products produced in Canada in prescribed circumstances in the amount determined in a prescribed manner.
Duty payable
(2) The duty imposed under subsection (1) is payable by the cannabis licensee that packaged the cannabis products at the time of their delivery to a purchaser.
Duty on imported cannabis
158.21 (1) Duty is imposed on imported cannabis products in the amount that is equal to the greater of
(a) the amount determined in respect of the cannabis products under section 1 of Schedule 7, and
(b) the amount determined in respect of the cannabis products under section 3 of Schedule 7.
Duty payable
(2) The duty imposed under subsection (1) is payable by the importer, owner or other person that is liable under the Customs Act to pay duty levied under section 20 of the Customs Tariff or that would be liable to pay that duty on the cannabis products if they were subject to that duty.
Additional cannabis duty on imported cannabis
158.22 (1) In addition to the duty imposed under section 158.21, a duty in respect of a specified province is imposed on imported cannabis products in prescribed circumstances in the amount determined in a prescribed manner.
Duty payable
(2) The duty imposed under subsection (1) is payable by the importer, owner or other person that is liable under the Customs Act to pay duty levied under section 20 of the Customs Tariff or that would be liable to pay that duty on the cannabis products if they were subject to that duty.
Application of Customs Act
158.23 The duties imposed under sections 158.21 and 158.22 on imported cannabis products shall be paid and collected under the Customs Act, and interest and penalties shall be imposed, calculated, paid and collected under that Act, as if the duties were a duty levied under section 20 of the Customs Tariff, and, for those purposes, the Customs Act applies with any modifications that the circumstances require.
Value for duty
158.24 For the purposes of section 3 of Schedule 7 and of any regulations made for the purposes of section 158.22 in respect of imported cannabis products,
(a) the value of a cannabis product is equal to the value of the cannabis product, as it would be determined under the Customs Act for the purpose of calculating duties imposed under the Customs Tariff on the cannabis product at a percentage rate, whether the cannabis product is in fact subject to duty under the Customs Tariff; or
(b) despite paragraph (a), the value of a cannabis product imported in prescribed circumstances shall be determined in prescribed manner.
Duty on cannabis taken for use
158.25 (1) Subject to section 158.29, if cannabis products that are not packaged are taken for use, duty is imposed on the cannabis products in the amount that is equal to the greater of
(a) the amount determined in respect of the cannabis products under section 1 of Schedule 7, and
(b) the amount determined in respect of the cannabis products under section 4 of Schedule 7.
Specified province — duty on cannabis taken for use
(2) Subject to section 158.29, if cannabis products that are not packaged are taken for use, a duty in respect of a specified province is imposed on the cannabis products in prescribed circumstances in the amount determined in prescribed manner. This duty is in addition to the duty imposed under subsection (1).
Duty payable
(3) The duty imposed under subsection (1) or (2) is payable at the time the cannabis product is taken for use by the person that is responsible for it at that time.
Duty on unaccounted cannabis
158.26 (1) If a particular person that is responsible at a particular time for cannabis products that are not packaged cannot account for the cannabis products as being, at the particular time, in the possession of a cannabis licensee or in the possession of another person in accordance with subsection 158.11(3) or paragraph 158.11(5)(a), duty is imposed on the cannabis products in the amount that is equal to the greater of
(a) the amount determined in respect of the cannabis products under section 1 of Schedule 7, and
(b) the amount determined in respect of the cannabis products under section 4 of Schedule 7.
Specified province — duty on unaccounted cannabis
(2) If a particular person that is responsible at a particular time for cannabis products that are not packaged cannot account for the cannabis products as being, at the particular time, in the possession of a cannabis licensee or in the possession of another person in accordance with subsection 158.11(3) or paragraph 158.11(5)(a), a duty in respect of a specified province is imposed on the cannabis products in prescribed circumstances in the amount determined in prescribed manner. This duty is in addition to the duty imposed under subsection (1).
Duty payable
(3) The duty imposed under subsection (1) or (2) is payable at the particular time, and by the particular person, referred to in that subsection.
Exception
(4) Subsection (1) does not apply in circumstances in which the particular person referred to in that subsection is convicted of an offence under section 218.1.
Exception
(5) Subsection (2) does not apply in prescribed circumstances.
Duty relieved — cannabis imported by licensee
158.27 The duties imposed under sections 158.21 and 158.22 are relieved on a cannabis product that is not packaged and that is imported
(a) by a cannabis licensee; or
(b) by a prescribed person in prescribed circumstances or for a prescribed purpose.
Duty relieved — prescribed circumstances
158.28 The duties imposed under any of sections 158.19 to 158.22 are relieved on a cannabis product in prescribed circumstances or if prescribed conditions are met.
Duty not payable — cannabis taken for analysis, destruction, etc.
158.29 Duty is not payable on a cannabis product that is not packaged and that is
(a) taken for analysis or destroyed by the Minister;
(b) taken for analysis or destroyed by the Minister, as defined in subsection 2(1) of the Cannabis Act;
(c) taken for analysis by a cannabis licensee in a manner approved by the Minister;
(d) destroyed by a cannabis licensee in a manner approved by the Minister;
(e) delivered to another person for analysis or destruction by that person in a manner approved by the Minister; or
(f) delivered to a prescribed person in prescribed circumstances or for a prescribed purpose.
Definition of commencement day
158.3 (1) For the purposes of this section, commencement day has the same meaning as in section 152 of the Cannabis Act.
Duty on cannabis — production before commencement day
(2) Duty is imposed on cannabis products that are produced in Canada and delivered to a purchaser before commencement day for sale or distribution after that day in the amount that is equal to the greater of
(a) the amount determined in respect of the cannabis product under section 1 of Schedule 7, and
(b) the amount determined in respect of the cannabis product under section 2 of Schedule 7.
Duty payable
(3) The duty imposed under subsection (2) is payable on commencement day by the cannabis licensee that packaged the cannabis product.
Exception
(4) Subsection (2) does not apply to a cannabis product that is delivered to a prescribed person in prescribed circumstances or for a prescribed purpose.
Quantity of cannabis
158.31 For the purposes of determining an amount of duty in respect of a cannabis product under section 1 of Schedule 7, the following rules apply:
(a) the quantity of flowering material and non-flowering material included in the cannabis product or used in the production of the cannabis product is to be determined in a prescribed manner in prescribed circumstances; and
(b) if paragraph (a) does not apply in respect of the cannabis product,
(i) the quantity of flowering material and non-flowering material included in the cannabis product or used in the production of the cannabis product is to be determined at the time the flowering material and non-flowering material are so included or used and in a manner satisfactory to the Minister, and
(ii) if the quantity of flowering material included in the cannabis product or used in the production of the cannabis product is determined in accordance with subparagraph (i), the quantity of that flowering material that is industrial hemp by-product is deemed to be non-flowering material if that quantity is determined in a manner satisfactory to the Minister.
Delivery to a purchaser
158.32 For the purposes of sections 158.19, 158.2, 158.3 and 158.33 and for greater certainty, delivery to a purchaser includes
(a) delivering cannabis products, or making them available, to a person other than the purchaser on behalf of or under the direction of the purchaser;
(b) delivering cannabis products, or making them available, to a person that obtains them otherwise than by means of a purchase; and
(c) delivering cannabis products or making them available in prescribed circumstances.
Taking for use of packaged product
158.33 If a packaged cannabis product is taken for use by the cannabis licensee that packaged it, the following rules apply:
(a) for the purposes sections 158.19, 158.2 and 158.3, the cannabis product is deemed to be delivered to a purchaser at the time it is taken for use; and
(b) for the purpose of section 2 of Schedule 7, the dutiable amount of the cannabis product is deemed to be equal to the fair market value of the cannabis product at the time it is taken for use.
Time of delivery
158.34 For the purposes of sections 158.19, 158.2 and 158.3, a cannabis product is deemed to be delivered to a purchaser by a cannabis licensee at the earliest of
(a) the time at which the cannabis licensee delivers the cannabis product or makes it available to the purchaser,
(b) the time at which the cannabis licensee causes physical possession of the cannabis product to be transferred to the purchaser, and
(c) the time at which the cannabis licensee causes physical possession of the cannabis product to be transferred to a carrier — being a person that provides a service of transporting goods including, for greater certainty, a service of delivering mail — for delivery to the purchaser.
Dutiable amount
158.35 For the purpose of section 2 of Schedule 7, the dutiable amount of a cannabis product is deemed to be equal to the fair market value of the cannabis product
(a) if the cannabis product is delivered or made available to a person that obtains it otherwise than by means of a purchase; or
(b) in prescribed circumstances.
6 Section 180 of the Act is replaced by the following:
No refund on exported tobacco products, cannabis products or alcohol
180 Subject to this Act, the duty paid on any tobacco product, cannabis product or alcohol entered into the duty-paid market shall not be refunded on the exportation of the tobacco product, cannabis product or alcohol.
7 The Act is amended by adding the following after section 187:
Refund of duty — destroyed cannabis
187.1 The Minister may refund to a cannabis licensee the duty paid on a cannabis product that is re-worked or destroyed by the cannabis licensee in accordance with section 158.16 if the cannabis licensee applies for the refund within two years after the cannabis product is re-worked or destroyed.
8 (1) Paragraph 206(1)(d) of the Act is replaced by the following:
(d) every person that transports a tobacco product or cannabis product that is not stamped or non-duty-paid packaged alcohol.
(2) The Act is amended by adding the following after subsection 206(2):
Keeping records — cannabis licensee
(2.01) Every cannabis licensee shall keep records that will enable the determination of the amount of cannabis product produced, received, used, packaged, sold or disposed of by the licensee.
9 Paragraph 211(6)(e) of the Act is amended by striking out "or" at the end of subparagraph (viii), by adding "or" at the end of subparagraph (ix) and by adding the following after subparagraph (ix):
(x) to an official solely for the administration or enforcement of the Cannabis Act;
10 (1) The portions of section 214 of the Act before paragraph (a) is replaced by the following:
Unlawful production, sale, etc., of tobacco, alcohol or cannabis
214 Every person that contravenes any of sections 25, 25.2 to 25.4, 27 and 29, subsection 32.1(1) and sections 60, 62, 158.04 to 158.06 and 158.08 is guilty of an offence and liable
(2) The portions of section 214 of the Act before paragraph (a), as enacted by subsection (1), is replaced by the following:
Unlawful production, sale, etc., of tobacco, alcohol or cannabis
214 Every person that contravenes any of sections 25, 25.2 to 25.4, 27 and 29, subsection 32.1(1) and sections 60, 62, 158.02, 158.04 to 158.06, 158.08 and 158.1 is guilty of an offence and liable
11 The Act is amended by adding the following after section 218:
Punishment — sections 158.11 and 158.12
218.1 (1) Every person that contravenes section 158.11 or 158.12 is guilty of an offence and liable
(a) on conviction on indictment, to a fine of not less than the amount determined under subsection (2) and not more than the amount determined under subsection (3) or to imprisonment for a term of not more than five years, or to both; or
(b) on summary conviction, to a fine of not less than the amount determined under subsection (2) and not more than the lesser of $500,000 and the amount determined under subsection (3) or to imprisonment for a term of not more than 18 months, or to both.
Minimum amount
(2) The amount determined under this subsection for an offence under subsection (1) is the greater of
(a) the amount determined under section 1 of Schedule 7, as that section read at the time the offence was committed, in respect of the cannabis products to which the offence relates multiplied by
(i) if the offence occurred in a specified province, 400%, and
(ii) in any other case, 200%, and
(b) $1,000 in the case of an indictable offence and $500 in the case of an offence punishable on summary conviction.
Maximum amount
(3) The amount determined under this subsection for an offence under subsection (1) is the greater of
(a) the amount determined under section 1 of Schedule 7, as that section read at the time the offence was committed, in respect of the cannabis products to which the offence relates multiplied by
(i) if the offence occurred in a specified province, 600%, and
(ii) in any other case, 300%, and
(b) $2,000 in the case of an indictable offence and $1,000 in the case of an offence punishable on summary conviction.
12 Paragraph 230(1)(a) of the Act is replaced by the following:
(a) the commission of an offence under section 214 or subsection 216(1), 218(1), 218.1(1) or 231(1); or
13 Paragraph 231(1)(a) of the Act is replaced by the following:
(a) the commission of an offence under section 214 or subsection 216(1), 218(1) or 218.1(1); or
14 Subsection 232(1) of the Act is replaced by the following:
Part XII.2 of Criminal Code applicable
232 (1) Sections 462.3 and 462.32 to 462.5 of the Criminal Code apply, with any modifications that the circumstances require, in respect of proceedings for an offence under section 214, subsection 216(1), 218(1) or 218.1(1) or section 230 or 231.
15 The Act is amended by adding the following after section 233:
Contravention of section 158.13
233.1 Every cannabis licensee that contravenes section 158.13 is liable to a penalty equal to 200% of the greater of
(a) the amount determined under section 1 of Schedule 7, as that section read at the time the contravention occurred, in respect of the cannabis products to which the contravention relates, and
(b) the amount obtained by multiplying the fair market value, at the time the contravention occurred, of the cannabis products to which the contravention relates by the percentage set out in section 4 of Schedule 7, as that section read at that time.
16 (1) Subsection 234(1) of the Act is replaced by the following:
Contravention of section 38, 40, 49, 61, 62.1, 99, 149, 151 or 158.15
234 (1) Every person that contravenes section 38, 40, 49, 61, 62.1, 99, 149, 151 or 158.15 is liable to a penalty of not more than $25,000.
(2) Section 234 of the Act is amended by adding the following after subsection (2):
Failure to comply
(3) Every person that fails to return or destroy stamps as directed by the Minister under paragraph 158.07(b) is liable to a penalty of not more than $25,000.
(3) Subsection 234(3) of the Act, as enacted by subsection (2), is replaced by the following:
Failure to comply
(3) Every person that fails to return or destroy stamps as directed by the Minister under paragraph 158.07(b), or that fails to re-work or destroy a cannabis product in the manner authorized by the Minister under section 158.16, is liable to a penalty of not more than $25,000.
17 The Act is amended by adding the following after section 234:
Contravention of section 158.02, 158.1, 158.11 or 158.12
234.1 Every person that contravenes section 158.02, that receives for sale cannabis products in contravention of section 158.1 or that sells or offers to sell cannabis products in contravention of section 158.11 or 158.12 is liable to a penalty equal to 200% of the greater of
(a) the amount determined under section 1 of Schedule 7, as that section read at the time the contravention occurred, in respect of the cannabis products to which the contravention relates, and
(b) the amount obtained by multiplying the fair market value, at the time the contravention occurred, of the cannabis products to which the contravention relates by the percentage set out in section 4 of Schedule 7, as that section read at that time.
18 (1) Paragraph 238.1(1)(a) of the Act is replaced by the following:
(a) the person can demonstrate that the stamps were affixed to tobacco products, cannabis products or their containers in the manner prescribed for the purposes of the definition stamped in section 2 and that duty, other than special duty, has been paid on the tobacco products or cannabis products; or
(2) Subsection 238.1(2) of the Act is replaced by the following:
Amount of the penalty
(2) The amount of the penalty for each excise stamp that cannot be accounted for is equal to
(a) in the case of a tobacco stamp, the duty that would be imposed on a tobacco product for which the stamp was issued under subsection 25.1(1); or
(b) in the case of a cannabis stamp, five times the dollar amount set out in paragraph 1(a) of Schedule 7.
19 (1) The portion of section 239 of the Act before paragraph (a) is replaced by the following:
Other diversions
239 Unless section 237 applies, every person is liable to a penalty equal to 200% of the duty that was imposed on packaged alcohol, a tobacco product or a cannabis product if
(2) Paragraph 239(a) of the French version of the Act is replaced by the following:
a) elle a acquis l'alcool emballé ou le produit et les droits n'étaient pas exigibles en raison du but dans lequel elle les a acquis ou de leur destination;
20 Section 264 of the Act is replaced by the following:
Certain things not to be returned
264 Despite this Act, any alcohol, specially denatured alcohol, restricted formulation, raw leaf tobacco, excise stamp, tobacco product or cannabis product that is seized under section 260 must not be returned to the person from whom it was seized or any other person unless it was seized in error.
21 Subsection 266(2) of the Act is amended by striking out "and" at the end of paragraph (c), by adding "and" at the end of paragraph (d) and by adding the following after paragraph (d):
(e) a seized cannabis product only to a cannabis licensee.
22 (1) Subsection 304(1) of the Act is amended by adding the following after paragraph (c):
(c.1) respecting the types of security that are acceptable for the purposes of subsection 158.03(3), and the manner by which the amount of the security is to be determined;
(2) Paragraph 304(1)(f) of the Act is replaced by the following:
(f) respecting the information to be provided on tobacco products, packaged alcohol and cannabis products and on containers of tobacco products, packaged alcohol and cannabis products;
(3) Paragraph 304(1)(n) of the Act is replaced by the following:
(n) respecting the sale under section 266 of alcohol, tobacco products, raw leaf tobacco, specially denatured alcohol, restricted formulations, or cannabis products seized under section 260;
23 The Act is amended by adding the following after section 304:
Definition of coordinated cannabis duty system
304.1 (1) In this section, coordinated cannabis duty system means the system providing for the payment, collection and remittance of duty imposed under any of sections 158.2 and 158.22 and subsections 158.25(2) and 158.26(2) and any provisions relating to duty imposed under those provisions or to refunds in respect of any such duty.
Coordinated cannabis duty system regulations — transition
(2) The Governor in Council may make regulations, in relation to the joining of a province to the coordinated cannabis duty system,
(a) prescribing transitional measures, including
(i) a tax on the inventory of cannabis products held by a cannabis licensee or any other person, and
(ii) a duty or tax on cannabis products that are delivered prior to the province joining that system; and
(b) generally to effect the implementation of that system in relation to the province.
Coordinated cannabis duty system regulations — rate flexibility
(3) The Governor in Council may make regulations
(a) prescribing rules in respect of whether, how and when a change in the rate of duty for a specified province applies (in this subsection and subsection (4) any such change in the rate of duty is referred to as the "rate flexibility"), including rules deeming, in specified circumstances and for specified purposes, the status of anything to be different than what it would otherwise be, including when duty is imposed or payable and when duty is required to be reported and accounted for;
(b) if a manner of determining an amount of duty is to be prescribed in relation to the coordinated cannabis duty system,
(i) specifying the circumstances or conditions under which a change in the manner applies, and
(ii) prescribing transitional measures in respect of a change in the manner, including
(A) a tax on the inventory of cannabis products held by a cannabis licensee or any other person, and
(B) a duty or tax on cannabis products that are delivered prior to the change; and
(c) prescribing amounts and rates to be used to determine any refund that relates to, or is affected by, the coordinated cannabis duty system, excluding amounts that would otherwise be included in determining any such refund, and specifying circumstances under which any such refund shall not be paid or made.
Coordinated cannabis duty system regulations — general
(4) For the purpose of facilitating the implementation, application, administration and enforcement of the coordinated cannabis duty system or rate flexibility or the joining of a province to the coordinated cannabis duty system, the Governor in Council may make regulations
(a) prescribing rules in respect of whether, how and when that system applies and rules in respect of other aspects relating to the application of that system in relation to a specified province, including rules deeming, in specified circumstances and for specified purposes, the status of anything to be different than what it would otherwise be, including when duty is imposed or payable and when duty is required to be reported and accounted for;
(b) prescribing rules related to the movement of cannabis products between provinces, including a duty, tax or refund in respect of such movement;
(c) providing for refunds relating to the application of that system in relation to a specified province;
(d) adapting any provision of this Act or of the regulations made under this Act to the coordinated cannabis duty system or modifying any provision of this Act or those regulations to adapt it to the coordinated cannabis duty system;
(e) defining, for the purposes of this Act or the regulations made under this Act, or any provision of this Act or those regulations, in its application to the coordinated cannabis duty system, words or expressions used in this Act or those regulations including words or expressions defined in a provision of this Act or those regulations;
(f) providing that a provision of this Act or of the regulations made under this Act, or a part of such a provision, does not apply to the coordinated cannabis duty system;
(g) prescribing compliance measures, including penalties and anti-avoidance rules; and
(h) generally in respect of the application of that system in relation to a province.
Conflict
(5) If a regulation made under this Act in respect of the coordinated cannabis duty system states that it applies despite any provision of this Act, in the event of a conflict between the regulation and this Act, the regulation prevails to the extent of the conflict.
Definition of cannabis duty system
304.2 (1) In this section, cannabis duty system means the system providing for the payment, collection and remittance of duty imposed under Part IV.1 and any provisions relating to duty imposed under that Part or to refunds in respect of any such duty.
Transitional cannabis duty system regulations
(2) For the purpose of facilitating the implementation, application, administration or enforcement of the cannabis duty system, the Governor in Council may make regulations adapting any provision of this Act or of the regulations made under this Act to take into account the making of regulations under the Cannabis Act or amendments to those regulations.
Retroactive effect
(3) Despite subsection 304(2), regulations made under subsection (2) may, if they so provide, be retroactive and have effect with respect to any period before they are made.
24 Schedule 7 to the Act is replaced by the following:
SCHEDULE 7
(Sections 2, 158.19, 158.21, 158.24 to 158.26, 158.3, 158.31, 158.33, 158.35, 218.1, 233.1, 234.1 and 238.1)
Duty on Cannabis Products
1 Any cannabis product produced in Canada or imported: the amount equal to the total of
(a) $0.50 per gram of flowering material included in the cannabis product or used in the production of the cannabis product,
(b) $0.15 per gram of non-flowering material included in the cannabis product or used in the production of the cannabis product,
(c) $0.50 per viable seed included in the cannabis product or used in the production of the cannabis product, and
(d) $0.50 per vegetative cannabis plant included in the cannabis product or used in the production of the cannabis product.
2 Any cannabis product produced in Canada: the amount obtained by multiplying the dutiable amount for the cannabis product by 5%.
3 Any imported cannabis product: the amount obtained by multiplying the value of the cannabis product by 5%.
4 Any cannabis product taken for use or unaccounted for: the amount obtained by multiplying the fair market value of the cannabis product by 5%.
Excise Tax Act
25 The definition excisable goods in subsection 123(1) of the Excise Tax Act is replaced by the following:
excisable goods means beer or malt liquor (within the meaning assigned by section 4 of the Excise Act) and spirits, wine, tobacco products and cannabis products (within the meaning assigned by section 2 of the Excise Act, 2001); (produit soumis à l'accise)
26 The portion of section 4 of Part VI of Schedule V to the Act before paragraph (a) is replaced by the following:
4 A supply of tangible personal property (other than excisable goods) made by way of sale by a public sector body where
27 Section 1 of Part III of Schedule VI to the Act is amended by adding the following after paragraph (a):
(b) cannabis products, as defined in section 2 of the Excise Act, 2001;
28 (1) Section 2 of Part IV of Schedule VI to the French version of the Act is replaced by the following:
2 La fourniture de graines et de semences (autres que les graines viables qui constituent du cannabis au sens du paragraphe 2(1) de la Loi sur le cannabis) à leur état naturel, traitées pour l'ensemencement ou irradiées pour l'entreposage, de foin, de produits d'ensilage ou d'autres produits de fourrage, fournis en quantités plus importantes que celles qui sont habituellement vendues ou offertes pour vente aux consommateurs, et servant habituellement d'aliments pour la consommation humaine ou animale ou à la production de tels aliments, à l'exclusion des graines, des semences et des mélanges de celles-ci emballés, préparés ou vendus pour servir de nourriture aux oiseaux sauvages ou aux animaux domestiques.
(2) Paragraph 2(a) of Part IV of Schedule VI to the English version of the Act is replaced by the following:
(a) grains or seeds (other than viable seeds that are cannabis as defined in subsection 2(1) of the Cannabis Act) in their natural state, treated for seeding purposes or irradiated for storage purposes,
29 Paragraphs 3.1(b) and (c) of Part IV of Schedule VI to the Act are replaced by the following:
(b) in the case of viable grain or seeds, they are included in the definition industrial hemp in section 1 of the Industrial Hemp Regulations made under the Controlled Drugs and Substances Act or they are industrial hemp for the purposes of the Cannabis Act; and
(c) the supply is made in accordance with the Controlled Drugs and Substances Act or the Cannabis Act, if applicable.
30 Paragraphs 12(b) and (c) of Schedule VII to the Act are replaced by the following:
(b) in the case of viable grain or seeds, they are included in the definition industrial hemp in section 1 of the Industrial Hemp Regulations made under the Controlled Drugs and Substances Act or they are industrial hemp for the purposes of the Cannabis Act; and
(c) the importation is in accordance with the Controlled Drugs and Substances Act or the Cannabis Act, if applicable.
31 Section 6 of Part I of Schedule X to the Act are replaced by the following:
6 Property, (other than advertising matter or excisable goods) that is a casual donation sent by a person in a non-participating province to a person in a participating province, or brought into a particular participating province by a person who is not resident in the participating provinces as a gift to a person in that participating province, where the fair market value of the property does not exceed $60, under such regulations as the Minister of Public Safety and Emergency Preparedness may make for purposes of heading No. 98.16 of Schedule I to the Customs Tariff.
Amendments to Various Regulations
Regulations Respecting Excise Licences and Registrations
32 (1) The portion of subsection 5(1) of the Regulations Respecting Excise Licences and Registrations before paragraph (a) is replaced by the following:
5 (1) For the purposes of paragraph 23(3)(b) of the Act, the amount of security to be provided by an applicant for a spirits licence, a tobacco licence or a cannabis licence is an amount of not less than $5,000 and
(2) Paragraph 5(1)(b) of the Regulations is replaced by the following:
(b) in the case of a tobacco licence or a cannabis 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.
Regulations Respecting the Possession of Tobacco Products That Are Not Stamped
33 The title of the Regulations Respecting the Possession of Tobacco Products That Are Not Stamped is replaced by the following:
REGULATIONS RESPECTING THE POSSESSION OF TOBACCO PRODUCTS OR CANNABIS PRODUCTS THAT ARE NOT STAMPED
34 The Regulations are amended by adding the following after section 1:
1.1 For the purposes of paragraph 158.11(3)(a) of the Excise Act, 2001, a person may possess a cannabis product that is not stamped if the person has in their possession documentation that provides evidence that the person is transporting the cannabis product on behalf of a cannabis licensee or, in the case of an industrial hemp by-product, an industrial hemp grower.
Stamping and Marking of Tobacco Products Regulations
35 The title of the Stamping and Marking of Tobacco Products Regulations is replaced by the following:
STAMPING AND MARKING OF TOBACCO AND CANNABIS PRODUCTS REGULATIONS
36 Paragraph 2(b) of the Regulations is replaced by the following:
(b) a tobacco product or a cannabis product is packaged in a prescribed package when it is packaged in the smallest package — including any outer wrapping that is customarily displayed to the consumer — in which it is normally offered for sale to the general public.
37 Subsection 4(2) of the Regulations is replaced by the following:
(2) For the purposes of paragraph 25.3(2)(d) of the Act, a prescribed person is a person who transports a tobacco excise stamp on behalf of a person described in paragraph 25.3(2)(a) or (b) of the Act.
(3) For the purposes of paragraph 158.05(2)(c) of the Act, a prescribed person is a person who transports a cannabis excise stamp on behalf of a person described in paragraph 158.05(2)(a) or (b) of the Act.
38 Subparagraphs 4.1(1)(a)(i) and (ii) of the Regulations are replaced by the following:
(i) the unaffixed tobacco excise stamps in the applicant's possession at the time of application, and
(ii) the tobacco excise stamps to be issued in respect of the application; and
39 The portion of section 4.2 of the Regulations before paragraph (a) is replaced by the following:
4.2 For the purposes of the definition stamped in section 2 of the Act and subsections 25.3(1) and 158.05(1) of the Act, the prescribed manner of affixing an excise stamp to a package is by affixing the stamp
Public Service Body Rebate (GST/HST) Regulations
40 Paragraph 4(1)(e) of the Public Service Body Rebate (GST/HST) Regulations is replaced by the following:
(e) excisable goods that are acquired by the particular person for the purpose of making a supply of the excisable goods for consideration that is not included as part of the consideration for a meal supplied together with the excisable goods, except where tax is payable in respect of the supply by the particular person of the excisable goods;
Terminology Changes
41 Every reference to "excise stamp" is replaced with a reference to "tobacco excise stamp", with any grammatical changes that the circumstances require, in the following provisions of the Excise Act, 2001:
(a) subsections 25.1(2) to (5);
(b) sections 25.2 to 25.4; and
(c) paragraph 25.5(a).
Consequential Amendments to Other Legislation
42 Consequential amendments to other legislation may be required as a result of sections 1 to 40.
Coming into Force
43 The following definitions apply for the purposes of sections 44 to 46.
Cannabis Act means Bill C-45, introduced in the 1st session of the 42nd Parliament and entitled An Act respecting cannabis and to amend the Controlled Drugs and Substances Act, the Criminal Code and other Acts. (Loi sur le cannabis)
commencement day has the same meaning as in section 152 of the Cannabis Act. (date de référence)
44 The following provisions come into force on the later of the day on which this Act receives royal assent and the day on which the Cannabis Act receives royal assent:
(a) sections 1 to 4;
(b) the headings before sections 158.01, 158.02, 158.17 and 158.19 of the Excise Act, 2001, as enacted by section 5;
(c) sections 158.01, 158.03 to 158.08, 158.14, 158.17, 158.18, 158.23, 158.24 and 158.27 to 158.35 of the Excise Act, 2001, as enacted by section 5; and
(d) sections 6 to 9, subsections 10(1) and 16(2) and sections 18, 20 to 33 and 35 to 41.
45 The following provisions come into force on commencement day:
(a) sections 158.02, 158.09 to 158.12, 158.15 and 158.16 of the Excise Act, 2001, as enacted by section 5; and
(b) subsection 10(2), sections 11 to 14, subsections 16(1) and (3) and sections 17, 19 and 34.
46 Sections 158.13, 158.19 to 158.22, 158.25, 158.26 of the Excise Act, 2001, as enacted by section 5, and section 15 come into force on the later of the day on which this Act receives royal assent and the day on which the Cannabis Act receives royal assent, but
(a) section 158.13 of the Excise Act, 2001, as enacted by section 5, and section 15 only apply to cannabis products that are entered into the duty-paid market on or after commencement day, including cannabis products that are delivered at any time to a purchaser for sale or distribution on or after commencement day;
(b) sections 158.19 and 158.2 of the Excise Act, 2001, as enacted by section 5, only apply to packaged cannabis products that are delivered to a purchaser on or after commencement day;
(c) sections 158.21 and 158.22 of the Excise Act, 2001, as enacted by section 5, only apply to cannabis products that are imported into Canada or released (as defined in the Customs Act) on or after commencement day;
(d) section 158.25 of the Excise Act, 2001, as enacted by section 5, only applies to cannabis products that are taken for use on or after commencement day; and
(e) section 158.26 of the Excise Act, 2001, as enacted by section 5, only applies to cannabis products that, on or after commencement day, cannot be accounted for as being in the possession of a cannabis licensee or in the possession of a person in accordance with subsection 158.11(3) or paragraph 158.11(5)(a) of that Act, as enacted by section 5.
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