EDM1-1-1 The Excise Duty Program
Excise Duty Memorandum
October 2025
This version replaces the one dated October 2012. This memorandum has been updated to reflect changes to the Excise Duty Program's responsibilities.
This memorandum explains the responsibilities of the Excise Duty Program and addresses other related topics, including audits, objections and appeals, taxpayer relief, and excise duty returns and refunds.
The information in this memorandum does not replace the law found in the Excise Act, the Excise Act, 2001, and the regulations made under those acts.
If this information does not completely address your situation, refer to the relevant act or regulations or contact your regional excise office for additional information. The offices are listed at Contact information – Excise and Specialty Tax Directorate.
On this page
General
1. Excise duties are indirect taxes imposed on beer, cannabis, spirits, tobacco, vaping, and wine products. Depending on the product, excise duties are generally calculated on the quantity produced, manufactured, or packaged.
2. Except where permitted by law, a person must obtain a licence to produce, manufacture, or package these products in Canada.
Legislation
Excise Act
3. The Excise Act regulates the production of beer, wort, and malt liquor within Canada and imposes excise duty on these products. For purposes of the Excise Act, beer includes beer and malt liquor that have an alcoholic strength not greater than 11.9% absolute ethyl alcohol by volume.
4. The Excise Act also establishes a regulatory framework within which licensed brewers, brew-on-premises registrants, and certain other persons have specific obligations.
Excise Act, 2001
5. The Excise Act, 2001 regulates the production of alcohol, cannabis, tobacco, and vaping products within Canada and imposes excise duties on these products. For purposes of the Excise Act, 2001, alcohol means spirits or wine and includes malt liquor and high alcohol beer that have an alcoholic strength greater than 11.9% absolute ethyl alcohol by volume.
6. The Excise Act, 2001 also establishes a regulatory framework within which licensees, registrants, and certain other persons have specific obligations.
Other legislation
7. The Excise Duty Program also administers certain provisions of the Importation of Intoxicating Liquors Act, which controls the importation of intoxicating liquors in Canada; the Spirit Drinks Trade Act, which controls the use in Canada of names of spirit drinks of foreign countries; and the Certificates of Age and Origin for Distilled Spirits Produced or Packaged in Canada Order to attest to the age and origin of distilled spirits as required by certain of Canada's trading partners.
8. The Customs Act and the Customs Tariff govern the importation of products covered by excise duty legislation. The Canada Border Services Agency (CBSA) administers these two acts. For importation information, go to Importing goods into Canada.
9. All of the acts and regulations mentioned in this memorandum are available by going to the Justice Laws Website.
Licences, registrations, and prescribed persons
Excise Act
10. Brewers and manufacturers of wort are licensed under the Excise Act.
11. The following information pertains to brewer's licences under the Excise Act:
- a licence is mandatory
- security is required
- an annual fee of $51.10 is payable
- a licence must be renewed annually
12. For more information about licensing under the Excise Act, refer to Circular ED200-1, Licensing requirements for manufacturers of beer or malt liquor, wort, yeast, or malt products.
13. Licensees are required to file returns for each reporting period, calculate any excise duties payable on those returns, and pay any amount owing. For information about filing requirements under the Excise Act, refer to Circular ED212-13, Filing requirements for licensed brewers.
Excise Act, 2001
Licences
14. One or more of the following licences may be issued to a person under the Excise Act, 2001:
- a spirits licence, a wine licence, a user's licence, or an excise warehouse licence if the person intends to carry on certain activities related to alcohol
- a cannabis licence if the person intends to carry on certain activities related to cannabis products
- a tobacco licence, a tobacco dealer's licence, a special excise warehouse licence, a licence for a duty free shop operator, or an excise warehouse licence if the person intends to carry on certain activities related to tobacco products
- a vaping product licence or an excise warehouse licence if the person intends to carry on certain activities related to vaping products
15. The following information pertains to excise duty licences under the Excise Act, 2001:
- applicants and licensees must meet criteria set out in the Excise Act, 2001 and the Regulations Respecting Excise Licences and Registrations to be eligible for a licence
- security is required to obtain a cannabis, spirits, tobacco, or vaping product licence
- no fee is payable
- a licence is valid for a maximum period of:
- five years, in the case of a cannabis licence
- three years, in the case of a vaping product licence
- two years, in any other case
- a licence must be renewed before the licensing period expires
16. For more information on the excise duty licences related to alcohol and tobacco products as well as on the excise warehouse licence, refer to Memorandum EDM2-1-1, Licence types. For more information on the cannabis licence and the vaping product licence, refer to Memorandum EDM6-2, Obtaining and renewing a cannabis licence, and Notice EDN79, Obtaining and renewing a vaping product licence, respectively.
17. Licensees are required to file returns for each reporting period, calculate any excise duties payable on those returns, and pay any amount owing. For information about filing requirements under the Excise Act, 2001, refer to Memorandum EDM10-1-1, Returns and payments.
Registrations
18. The following registrations are available under the Excise Act, 2001 to persons carrying on certain activities related to alcohol:
- ferment-on-premises registration
- user's registration
- alcohol registration
- specially denatured alcohol registration
19. For more information on these registrations, refer to Memorandum EDM2-3-1, Registration types.
20. The following information pertains to registrations under the Excise Act, 2001:
- applicants and registrants must meet criteria set out in the Regulations Respecting Excise Licences and Registrations to be eligible for a registration
- security is not required
- no fee is payable
- a registration is valid until it is cancelled, suspended, or revoked
- a registrant does not have to file returns
Prescribed persons under the Stamping and Marking of Tobacco, Cannabis and Vaping Products Regulations
Tobacco prescribed persons
21. Every person that intends to import tobacco products to be released under the Customs Act for entry into the duty-paid market must apply to become a tobacco prescribed person to obtain tobacco excise stamps unless they are a tobacco licensee.
22. For information on how to apply to become a tobacco prescribed person, refer to Notice EDN28, Becoming a prescribed person under the new tobacco stamping regime.
Vaping prescribed persons
23. Every person that intends to import stamped, packaged vaping products to be released under the Customs Act for entry into the duty-paid market must apply to become a vaping prescribed person to obtain vaping excise stamps unless they are a vaping product licensee.
24. For information on how to apply to become a vaping prescribed person, refer to Notice EDN81, Becoming a vaping prescribed person.
Business number and program account number
25. Excise duty licensees, registrants, and prescribed persons must obtain a business number (BN) from the CRA. The BN is a unique nine-digit business identifier that remains the same regardless of the number of program accounts issued to a person.
26. For more information, including how to register for a BN, go to Business number registration.
27. A program account number consists of three parts: the BN, the two-letter program identifier (RD for the Excise Duty Program), and a four-digit reference number. Program account numbers for licensees, registrants, and prescribed persons are issued by the Excise Duty Program at the time of licensing or registration.
Audits and regulatory reviews
Audits
28. Audits are detailed examinations of a licensee's activities and records. They are conducted to ensure that the correct amount of excise duty is paid.
29. An audit usually includes, but is not limited to, an examination of ledgers, journals, bank accounts, sales invoices, purchase vouchers, production records, inventory records, internal controls, expense accounts, and corporate minute books. Other documents that an auditor may examine include:
- excise duty returns
- customs documents
- records that support the excise duty returns or customs documents
- records required by regulation
- any other pertinent information on file
30. When a licensee has been selected for audit, an excise duty auditor will contact the licensee to arrange a date and time for the audit.
31. To gain a better understanding of the business operations, the auditor will meet with the licensee to discuss the nature and operations of the business and to tour the premises before examining any records.
32. During the audit, the auditor may require additional information and assistance from the licensee's employees, particularly those responsible for accounting, inventory records, and production.
33. Once the audit has been completed, the auditor may propose certain adjustments to the licensee's returns and records. The auditor will prepare a written summary of these proposed adjustments and will discuss these and any other findings with the licensee or their representative.
34. If the licensee or their representative requires time to analyze the proposed adjustments, the auditor will confirm the proposals in writing and allow a reasonable time for reply. If further information is provided within that time, the auditor will consider the additional information before issuing the final letter and findings.
35. After an audit adjustment is finalized, the CRA will issue either:
- a letter outlining the audit findings if the audit was conducted under the Excise Act
- a notice of assessment or a notice of reassessment if the audit was conducted under the Excise Act, 2001
36. If there are no proposed adjustments to the returns, the auditor will inform the licensee or their representative, in writing, of this fact and of any other findings once the audit has been finalized.
37. For more information about the audit process, refer to Guide RC4188, What You Should Know About Audits.
Regulatory reviews
38. Regulatory reviews consist of examining the activities of a licensee, registrant, or prescribed person to ensure compliance with excise duty legislation and regulations. These reviews can include spot checks of records, internal controls, and compliance with regulations or excise duty policies. Regulatory review activities, such as inventory verification, can complement future audit activities.
39. A regulatory review can also include a visit made at the request of a licensee, registrant, or prescribed person to assist in matters dealing with excise duty legislation and regulations (for example, to review the destruction of products or raw materials, to review credits, or to review unusual production issues).
Objections, appeals, and taxpayer relief
Excise Act
40. If a licensee under the Excise Act believes that the CRA has misinterpreted facts or applied the law incorrectly in relation to an adjustment, the licensee may contact their regional excise office to request reconsideration of the adjustment. The regional excise office will review the request and advise the licensee of the results of this review.
Excise Act, 2001
Objections and appeals
41. If a licensee under the Excise Act, 2001 believes that the CRA has misinterpreted facts or applied the law incorrectly in relation to an assessment, they may object to the assessment by completing and submitting Form E680, Notice of Objection (Excise Act, 2001), within 90 days of the date the disputed notice of assessment was mailed by the CRA to the licensee.
42. If a licensee under the Excise Act, 2001 has filed an objection and disagrees with the CRA's decision about the objection, they may file an appeal to the Tax Court of Canada. The licensee may appeal the Tax Court's decision to the Federal Court of Appeal, and a judgment of the Federal Court of Appeal may be further challenged before the Supreme Court of Canada, with that Court's permission.
43. For more information on objections and appeals, go to Excise taxes and special levies.
Taxpayer relief
44. Under the Excise Act, 2001, the CRA has the discretion to cancel or waive interest in certain situations and to waive or reduce a penalty that becomes payable by a licensee in respect of their failure to file a return for a reporting period.
45. For more information, go to Taxpayer relief provisions.
Returns and refunds
46. A person can file a return or a refund request:
- electronically, by signing in to the person's CRA account and using "File a return" or "Request a refund" in My Business Account
- by mail at:
Canada Revenue Agency
Prince Edward Island Tax Centre
275 Pope Rd
Summerside PE C1N 6E7
Technical information services
47. The Excise Duty Program offers a rulings and interpretations service with respect to excise duties. The purpose of this service is to assist licensees, registrants, prescribed persons, and other interested persons in voluntarily complying with the law by providing them with certainty on how the legislation affects their operations or transactions. The rulings and interpretations service is available free of charge.
48. The Excise Duty Program also provides a service of answering general and technical enquiries received by phone or in writing.
49. In addition, the Excise Duty Program issues a broad range of technical publications. These technical publications are available by going to Excise duties technical information.
50. For information on requesting a ruling or interpretation or making a general or technical enquiry and on the types of technical publications, go to Requesting an excise and specialty tax ruling or interpretation.
Digital services
51. The CRA offers a range of digital services to help licensees, registrants, and prescribed persons handle their excise duty matters, including getting account information, submitting documents, and making payments. For more information, go to Digital services.
Further information
For all technical publications related to excise duties, go to Excise duties technical information.
For information on how to make a general or technical enquiry on excise duties, go to Contact information – Excise and Specialty Tax Directorate.
For information on how to request a ruling or interpretation related to excise duties, go to Requesting an excise and specialty tax ruling or interpretation.