FCN13 New Brunswick No Longer a Listed Province Under Part 1 of the Greenhouse Gas Pollution Pricing Act Effective April 1, 2020

March 2020

The purpose of this notice is to provide non-registered persons and registered personsFootnote 1 under the fuel charge program important information following the Government of Canada’s announcement that the province of New Brunswick will no longer be subject to Part 1 of the Greenhouse Gas Pollution Pricing Act beginning April 1, 2020.

Draft regulations to that effect were released by the Department of Finance Canada on March 20, 2020 and may affect certain persons that are currently registered under the Act, such as distributors (including cardlock operators), emitters, importers, users, road, rail and marine carriers, other registered persons, as well as non-registered persons such as farmers, fishers, greenhouse operators and remote power plant operators.

Registered persons under the fuel charge program should carefully review the information contained in this notice to understand their obligations and determine if their registration is still required under Part 1 of the Act.

On April 1, 2020, persons who are responsible for covered facilities will continue to have responsibilities under Part 2 of the Act.

The information in this publication is for reference purposes only and does not replace the Greenhouse Gas Pollution Pricing Act or its regulations. The information described in this notice is also based on the Draft Regulations Relating to Part 1 of the Greenhouse Gas Pollution Pricing Act and the Fuel Charge Regulations that were proposed on March 20, 2020.

In this notice, all legislative references to the “Act” are to the Greenhouse Gas Pollution Pricing Act and all references to the “Draft Regulations” are to the proposed Draft Regulations Relating to Part 1 of the Greenhouse Gas Pollution Pricing Act and the Fuel Charge Regulations, unless otherwise stated.

Should there be any discrepancy between the information in this notice and the legislative provisions in the Act or its regulations, the legislative provisions apply. If the information in this publication does not completely address your particular situation, you may wish to refer to the Act or its relevant regulations.

Any commentary contained in this notice should not be taken as a representation by the CRA that the Draft Regulations will be made or adopted in their current form.

 

Table of Contents

Background

The Government of Canada implements a federal carbon pollution pricing system that applies in provinces and territories that request it or that do not have a carbon pricing system that meets the federal stringency requirements. The Greenhouse Gas Pollution Pricing Act came into force on June 21, 2018 and is composed of two key parts.

Part 1 is administered by the Canada Revenue Agency (CRA) and provides for a charge, known as the fuel charge, which applies to 21 types of fuelFootnote 2 and to combustible waste. Schedule 1 to the Act also includes the list of provinces and territories where the federal fuel charge applies. They are known as listed provinces. Part 2 is administered by Environment and Climate Change Canada (ECCC) and provides an output-based pricing system (OBPS) for industrial facilities. For more information on the OBPS, go to the ECCC website.

Current status

On December 11, 2019, the Government of Canada announced that New Brunswick’s proposed provincial tax on carbon emitting products meets the federal stringency requirements for the sources it covers. To that effect, on March 20, 2020 the Department of Finance Canada released Draft Regulations that propose to stand down the federal fuel charge effective April 1, 2020 in New Brunswick. The OBPS under Part 2 of the Act will continue to apply in New Brunswick. The Governments of Canada and New Brunswick will work together to ensure regulatees in the federal OBPS receive exemptions from New Brunswick’s carbon pricing.

Effective April 1, 2020, the CRA will administer the proposed Draft Regulations as if they were made on that day. Therefore, as of that date, the fuel charge will not apply

Persons that believe that their registration would no longer be required must follow the steps below.

Information on cancelling a registration

Registration is either mandatory or permitted if business activities include distributing, wholesaling, producing, using or delivering one or more of the fuels covered by the Act or burning combustible waste, in a listed province. For more information on registration, go to the Fuel charge notices and select the notice that best relates to your business activities.

If, as a result of New Brunswick no longer being a listed province, as proposed, a registered person believes it would no longer be required to be registered, that person may request that the CRA cancel its registration. The person would need to make the request in writing, noting the reason for requesting the cancellation, and must include their name, address and business number as well as the effective date of cancellation. The CRA would be required to cancel the registration if satisfied that the registration is no longer required, and would notify the person of the cancellation and the effective date of the cancellation.

The registered person can submit the cancellation request

Sudbury Tax Centre
Fuel Charge Program
Post Office Box 20000, Station A
Sudbury ON P3A 5C1

For persons whose registration would no longer be required, the last reporting period would be January 1 to March 31, 2020 for road carriers and March 1 to 31, 2020 for all other persons. Returns for these reporting periods would be due by April 30, 2020.

The registration may be cancelled after March 31, 2020. If a cancellation request is not submitted to the CRA, the requirement to file returns will continue even where no charge is payable and the registration is no longer required.   

Filing and reporting

For businesses other than road carriers, returns must be filed monthly, by the end of the month following the month in which the business activities related to fuels or combustible waste occurred. For example, business activities for February must be reported by the end of March. In the case of road carriers, returns must be filed on a quarterly basis, by the end of the month following a calendar quarter. A person’s reporting requirements as a result of New Brunswick no longer being a listed province would depend on whether the person continues to have business activities in other listed provinces after March 31, 2020.

Final return for business activities occurring only in New Brunswick or in non-listed provinces

Other than a road carrier, if a person’s business activities in respect of any type of fuel or any combustible waste only occur in New Brunswick or in non-listed provinces, a final Form B400, Fuel Charge Return – Registrant, as well as the related schedule, for the period March 1 to March 31, 2020 would need to be filed by April 30, 2020. For registered road carriers, the last return and related schedule for the period January 1 to March 31, 2020 would be due by April 30, 2020. In all cases, if there is no amount owing for this period, a return would still be filed with the CRA.

Example 

A registered person’s business activities include distributing fuel in New Brunswick and in Nova Scotia. The registered person would file a final Form B400, Fuel Charge Return – Registrant as well as Form B400-1, Fuel Charge Return Schedule – Registered Distributor, by April 30, 2020, for their business activities in New Brunswick for the reporting period of March 1 to March 31, 2020. There would be no requirement to file a return under the Act for business activities in Nova Scotia, since this is a non-listed province.

Returns for business activities in New Brunswick and in listed provinces after March 31, 2020

Obligations for business activities in listed provinces will continue to apply after March 31, 2020.

Example 

A distributor’s business activities in New Brunswick include distributing fuel in New Brunswick and Ontario. From April 1 to 30, 2020, the distributor delivers a type of fuel to various companies in New Brunswick and in Ontario. The distributor would file Form B400, Fuel Charge Return – Registrant, as well as Form B400-1, Fuel Charge Return Schedule – Registered Distributor, for Ontario only, by May 31, 2020.

Inspection

Section 141 of the Act provides that, for purposes of the administration and enforcement of Part 1, the CRA may inspect, audit or examine the records, processes, property or premises of a person that may be relevant in determining the obligations of that person under this Part, or the amount of any rebate to which that person is entitled under this Part and whether that person is compliant with this Part.

Persons that have business activities in New Brunswick related to any of the 21 types of fuels or to combustible waste would continue to be subject to inspections after April 1, 2020. Any inspection after that date would cover periods in which Part 1 applied, up to and including periods ending March 31, 2020. Any assessment or refund would be processed as necessary. The administration and enforcement provisions of the Act (that are related to penalties, collection and confidentiality of information) would continue to apply.

Books and records

Section 104 of the Act provides that every person that pays or that is required to pay a charge or file a return and every person that makes an application for a rebate must keep all records that are necessary to enable the determination of the person’s liabilities and obligations or the amount of the rebate to which the person is entitled and to determine whether the person has complied with their obligations. Persons that are required to maintain records must retain them for a period of six years after the end of the year to which the documents relate.

Enquiries

For any questions related to the Greenhouse Gas Pollution Pricing Act, contact the following office:

Excise Duties and Taxes Division
Excise and GST/HST Rulings Directorate
Canada Revenue Agency
Place de Ville Tower A 11th floor
320 Queen St
Ottawa ON K1A 0L5
Phone: 1-866-330-3304 (option 2)
Fax: 1-613-954-2226

Further information

For all technical publications related to the Greenhouse Gas Pollution Pricing Act and its regulations, go to Fuel charge technical information.

To make a technical enquiry on the fuel charge or for additional information on the application of the fuel charge for each type of registered persons, go to Contact Information – Excise Duties, Excise Taxes, Fuel Charge and Air Travellers Security Charge.

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