Legislative and Regulatory Proposals Relating to the Excise Tax Act, the Excise Act, 2001 and the Excise Act

PART 1Draft Amendments to the Excise Tax Act

• 1 (1) The portion of subsection 181(5) of the Excise Tax Act before paragraph (a) is replaced by the following:

  • Marginal note:Redemption of coupon

    (5) For the purposes of this Part, if, in full or partial consideration for a taxable supply of property or a service, a supplier that is a registrant accepts a coupon that may be exchanged for the property or service or that entitles the recipient of the supply to a reduction of, or a discount on, the price of the property or service and a particular person at any time pays, exclusively in the course of commercial activities of the particular person, an amount to the supplier for the redemption of the coupon, the following rules apply:

• (2) Section 181 of the Act is amended by adding the following after subsection (5):

  • Marginal note:Redemption — commercial activities

    (6) For the purposes of subsection (5), a payment is made by a person exclusively in the course of commercial activities of the person only if:

    • (a) the person is not a financial institution and all or substantially all of the activities in the course of which the payment is made are commercial activities; or

    • (b) the person is a financial institution and all of the activities in the course of which the payment is made are commercial activities.

• (3) Subsections (1) and (2) are deemed to have come into force on the day after Announcement Date and also apply in respect of any payment made by a person on or before Announcement Date to a supplier for the redemption of a coupon if the person has not claimed an input tax credit in respect of the payment in a return under Division V of Part IX of the Act that is filed on or before Announcement Date.

• 2 (1) Paragraph (b) in the description of A in subsection 193(1) of the Act is replaced by the following:

  • (b) whichever of the following amounts is applicable:

    • (i) if subparagraph (ii) does not apply, the tax that is or would be, in the absence of section 167, payable in respect of the particular taxable supply, and

    • (ii) if the registrant is a selected listed financial institution at the particular time, the amount determined by the formula

      (C + D) − E

      where

      C

      is the tax that is or would be, in the absence of section 167, payable in respect of the particular taxable supply,

      D

      is the total of all amounts, each of which is determined for a participating province by the formula

      F × G × (H ÷ I)

      where

      F

      is the tax under subsection 165(1) that is or would be, in the absence of section 167, payable in respect of the particular taxable supply,

      G

      is the registrant’s percentage for the participating province determined for the purposes of subsection 225.2(2) for the registrant’s taxation year that includes the particular time,

      H

      is the tax rate for the participating province, and

      I

      is the rate set out in subsection 165(1), and

      E

      is the tax under subsection 165(2) that is or would be, in the absence of section 167, payable in respect of the particular taxable supply, and

• (2) The description of C in paragraph 193(2.1)(b) of the Act is replaced by the following:

  C

  is

  • (i) if subparagraph (ii) does not apply, the tax that is or would be, in the absence of section 167, payable in respect of the particular taxable supply, or

  • (ii) if the public sector body is a selected listed financial institution at the particular time, the amount determined by the formula

    (D + E) − F

    where

    D

    is the tax that is or would be, in the absence of section 167, payable in respect of the particular taxable supply,

    E

    is the total of all amounts, each of which is determined for a participating province by the formula

    G × H × (I ÷ J)

    where

    G

    is the tax under subsection 165(1) that is or would be, in the absence of section 167, payable in respect of the particular taxable supply,

    H

    is the public sector body’s percentage for the participating province determined for the purposes of subsection 225.2(2) for the public sector body’s taxation year that includes the particular time,

    I

    is the tax rate for the participating province, and

    J

    is the rate set out in subsection 165(1), and

    F

    is the tax under subsection 165(2) that is or would be, in the absence of section 167, payable in respect of the particular taxable supply.

• (3) Subsections (1) and (2) apply in respect of any supply in respect of which tax becomes payable, or would become payable in the absence of section 167 of the Act, on or after Announcement Date.

• 3 (1) The portion of subsection 238(2.1) of the Act before paragraph (a) is replaced by the following:

  • Marginal note:Filing by certain selected listed financial institutions

    (2.1) Despite paragraph (1)(b) and subsection (2), if a selected listed financial institution’s reporting period is a period other than a fiscal year, the financial institution must

• (2) Section 238 of the Act is amended by adding the following after subsection (3):

  • Marginal note:Return — deceased individual

    (3.1) Despite subsections (1) to (3), if an individual dies on a particular day and if a return, interim return or final return for a reporting period of the individual or of the estate of the individual would, in the absence of this subsection, be required to be filed under any of subsections (1) to (3) on or before a day that is on or after the particular day and is less than six months after the particular day, the estate of the individual must file the return, interim return or final return, as the case may be, with the Minister on or before the last day of the sixth month after the month that includes the particular day.

• (3) Subsection (1) applies in respect of reporting periods that end after Announcement Date.

• (4) Subsection (2) applies in respect of returns, interim returns and final returns that, in the absence of subsection 238(3.1) of the Act as enacted by subsection (2), would be required to be filed under any of subsections 238(1) to (3) of the Act on or before a day that is after Announcement Date.

• 4 (1) Subsection 273.2(3) of the Act is replaced by the following:

  • Marginal note:Information return for reporting institution

    (3) Subject to subsection (3.1), a reporting institution must file an information return with the Minister for a fiscal year of the reporting institution in prescribed form containing prescribed information on or before the day that is six months after the end of the fiscal year.

  • Marginal note:Information return — deceased individual

    (3.1) If an individual dies on a particular day and an information return for a fiscal year of the individual would, in the absence of this subsection, be required to be filed under subsection (3) on or before a day that is on or after the particular day and is less than six months after the particular day, the estate of the individual must file the information return with the Minister on or before the last day of the sixth month after the month that includes the particular day.

• (2) Subsection (1) applies in respect of information returns that, in the absence of subsection 273.2(3.1) of the Act as enacted by subsection (1), would be required to be filed under subsection 273.2(3) of the Act on or before a day that is after Announcement Date.

PART 2Draft Amendments to the Excise Act, 2001

• 5 (1) Section 158.42 of the Excise Act, 2001 is amended by adding the following after subsection (3):

  • Marginal note:Removal — certain vaping products

    (4) Subsection (1) does not apply to the removal of a vaping product described in paragraph (a) of the definition vaping product in section 2 from the premises of a vaping product licensee if

    • (a) the vaping product licensee applies to the Minister, in the prescribed form and manner, for an authorization to remove, or have another person remove, the vaping product from the premises;

    • (b) the Minister authorizes the removal of the vaping product in a manner specified by the Minister; and

    • (c) the vaping product is removed in accordance with the authorization.

• (2) Subsection (1) comes into force on the day on which the Act enacting that subsection receives royal assent.

PART 3Draft Amendments to the Excise Act

• 6 (1) Section 99 of the Excise Act is amended by adding the following after subsection (4):

  • Marginal note:Waiving or reducing penalty

    (5) The Minister may, on or before the day that is 10 calendar years after the end of a period for which a return is required by this Act to be made by a person, or on application by the person on or before that day, waive or reduce any penalty payable by the person under subsection (4) in respect of the return.

• (2) Subsection (1) comes into force on the day on which the Act enacting that subsection receives royal assent.

• 7 (1) Section 110.1 of the Act is amended by adding the following after subsection (2):

  • Marginal note:Waiving or reducing penalty or interest

    (3) The Minister may, on or before the particular day that is 10 calendar years after the day an amount was required to be paid by a person under this Act, or on application by the person on or before the particular day, waive or reduce any penalty or interest on the amount payable by the person under subsection (1).

• (2) Subsection (1) comes into force on the day on which the Act enacting that subsection receives royal assent.

PART 4Draft Amendments to Various Regulations

DIVISION 1Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations

• 8 (1) Section 40 of the Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations is amended by adding the following after paragraph (a):

  • (a.1) any amount of tax that became payable, or that was paid without having become payable, by a surety — being a person acting as a surety under a performance bond in respect of a contract for the supply of construction services relating to real property situated in Canada — in respect of property or a service acquired, imported or brought into a participating province

    • (i) exclusively and directly for consumption, use or supply in the course of carrying on, or of engaging another person to carry on, construction that is undertaken in full or partial satisfaction of the surety’s obligations under the performance bond, and

    • (ii) otherwise than for use as capital property of the surety or in improving capital property of the surety;

• (2) Subsection (1) applies in respect of any amount of tax that becomes payable, or that is paid without having become payable, during a reporting period of a person that

  • (a) ends after Announcement Date; or

  • (b) ends after October 8, 1998 and on or before Announcement Date, unless the amount of tax is included by the person in determining the positive or negative amounts that the person is required to add, or may deduct, under subsection 225.2(2) of the Excise Tax Act in determining the net tax of the person for the reporting period.

DIVISION 2Regulations Respecting Excise Licences and Registrations

9 Paragraph 4(b) of the Regulations Respecting Excise Licences and Registrations is replaced by the following: