FCN5 Emitters Under the Greenhouse Gas Pollution Pricing Act

March 2019

The purpose of this notice is to provide information on registration, filing and reporting requirements to persons who choose to register as emitters under Part 1 of the Greenhouse Gas Pollution Pricing Act.

A person that is responsible for a covered facility and that has been issued a covered facility certificate by the Minister of Environment and Climate Change Canada (ECCC) in respect of that covered facility under the output-based pricing system (OBPS) is permitted to register as an emitter with the Canada Revenue Agency (CRA). These persons should carefully review the information contained in this notice since a clear understanding of the legislative provisions is key to remaining compliant with the Act.

For more information on the other types of registration under the Act and the registration process, refer to Fuel Charge Notice FCN1, Registration Under the Greenhouse Gas Pollution Pricing Act.

The information in this notice 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, in part, on the Draft Regulations Amending Part 1 of Schedule 1 and Schedule 2 to the Greenhouse Gas Pollution Pricing Act (“Draft Regulations”). The Draft Regulations were included as attachments to the news release entitled Department of Finance Announcing Climate Action Incentive Payments and Launch of Fuel Charge Consultations that was issued on October 23, 2018. Any reference that is made in this notice to April 1, 2019 or July 1, 2019 is as proposed in the Draft Regulations. Any reference that is made in this notice to a particular listed province refers to Manitoba, New Brunswick, Nunavut, Ontario, Saskatchewan and Yukon, as proposed in the Draft Regulations. Any commentary contained in this notice should not be taken as a representation by the CRA that the Draft Regulations will eventually be made in their current form.

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. For more information about the Act and its regulations, including all related technical publications, go to Fuel charge technical information.

All legislative references in this publication are to the Act, unless otherwise specified.

Overview

As part of the Government of Canada’s initiative to implement a federal carbon pollution pricing system, and taking into consideration provincial carbon pollution pricing systems, the Government of Canada has developed a federal carbon pollution pricing system composed of a fuel charge that applies to fossil fuels and an output-based pricing system (OBPS) for industrial facilities.Footnote 1

The federal system applies in provinces and territories where a provincial or territorial carbon pollution pricing system has not been put into place or the system does not meet the federal standard. The Canada Revenue Agency (CRA) will be responsible for administering and enforcing the fuel charge component of the federal system beginning April 1, 2019, as proposed, for the proposed listed provinces of Manitoba, New Brunswick, Ontario and Saskatchewan and beginning July 1, 2019, as proposed, for the proposed listed provinces of Nunavut and Yukon (the listed provinces). For the applicable rates of the charge on the various fuel types and combustible waste, go to Fuel Charge Rates.

This notice provides information on registration, filing and reporting requirements for persons that choose to register as emitters. A person personthat is responsible for a covered facility should carefully review the information included in this notice and should also familiarize themselves with the Act, its regulations and other related notices. They may also contact the CRA for additional information and clarification.

Information on registration

Voluntary registration

Under subsection 57(1), a person may apply for registration as an emitter if the person is, for purposes of the industrial greenhouse gas emissions rules under Part 2 of the Act, a person responsible for a covered facility and the person has been issued a covered facility certificate by the Minister of Environment and Climate Change Canada (ECCC) in respect of the covered facility. A person that is registered as an emitter may have more than one covered facility. For more information on covered facilities and emitters, go to the ECCC website.

A registered emitter can accept delivery of fuel without a charge being payable, at that time, when the registered emitter provides an exemption certificate to the registered distributor that delivers the fuel.

By contrast, a charge applies on fuel delivered to a person responsible for a covered facility under the OBPS if the person is not registered as an emitter with the CRA. The charge is generally payable by the registered distributor that delivers the fuel and applies even if a covered facility certificate has been issued by ECCC to the responsible person and the fuel is for use in its covered facility.

A person responsible for a covered facility that chooses not to voluntarily register as an emitter may be required or permitted to apply for other types of registration. For more information on the different registration types, refer to Fuel Charge Notice FCN1, Registration Under the Greenhouse Gas Pollution Pricing Act.

The information in the remainder of this notice is for emitters who voluntarily register.

Timing of registration

If a person qualifies to voluntarily register as an emitter, the person may apply for registration at any time.

Applying for registration

To apply for registration as an emitter, a person must complete Form L400, Fuel Charge Registration. Even where a person applies for more than one type of registration, only one registration form is required, unless an application for authority to file separate returns under subsection 88(1) is submitted. The person must also complete Form L400-1, Fuel Charge Registration Schedule, or Form L400-2, Fuel Charge Registration Schedule – Road Carrier, or both depending on the type of registration for which the person is applying. Information on other registration types can be found in Fuel Charge Notice FCN1, Registration Under the Greenhouse Gas Pollution Pricing Act.

Registration forms can be submitted electronically using the “Submit documents” function in My Business Account. If the person submits a registration application electronically, that person will be provided with a confirmation number. This confirmation number should be retained for follow-up on the status of the application.

The person can also send the completed registration forms by mail to the following address:

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

The processing of the fuel charge registration may be delayed in the case of missing or incomplete information.

If the application for registration is approved, the CRA will inform the person in writing of its registration number and the effective date of registration.

Authority for separate returns

Under subsection 88(1), a person that engages in one or more activities in separate branches or divisions may apply to the CRA for authority to file separate returns and rebate applications under Part 1 of the Act for a branch or division. The application to file separate returns must be submitted in the form of a letter at the time of registration.

The person must complete the application and, for each branch or division, confirm that the following requirements are met:

  • the branch or division indicated in the application can be separately identified by reference to its location or the nature of the activities in which it is engaged; and
  • separate records, books of account and accounting systems are maintained for the branch or division.

A separate Form L400 should be used for each branch or division, along with Form L400-1 or Form L400-2 or both, depending on the type of registration for which the person is applying.

The application and forms can be submitted electronically using the “Submit documents” function in My Business Account or by mail to the Sudbury Tax Centre at the address listed above.

If the application to file separate returns is approved, the CRA will inform the person in writing and the authorization will remain in effect until:

  • the person requests the revocation of the authorization in writing;
  • the person fails to comply with any condition of the authorization or any provision of Part 1 of the Act;
  • the CRA is no longer satisfied that the requirements of the authorization are met; or
  • the CRA considers that the authorization is no longer required.

Under these conditions, the CRA will revoke the authorization and send a notice in writing to the person specifying the effective date of the revocation.

Applying for more than one type of registration

Depending on the business activities of a registered emitter, the registered emitter may be either required or permitted to apply for other types of registration. For more information on the different registration types, refer to Fuel Charge Notice FCN1.

In addition to applying for registration as an emitter, a person may be either required or permitted to register as a distributor if it meets the requirements set out in section 55. For more information on registered distributors, refer to Fuel Charge Notice FCN2, Distributors Under the Greenhouse Gas Pollution Pricing Act.

Unless the registered emitter is also registered, or is required to register, as a distributor, it is required under the Act to register as a road carrier in respect of a type of fuel that is qualifying motive fuel if it uses fuel of that type in a specified commercial vehicle in a listed province. For more information on registered road carriers, refer to Fuel Charge Notice FCN6, Road Carriers Under the Greenhouse Gas Pollution Pricing Act.

Unless the registered emitter is also registered, or required to be registered, as a distributor for a type of fuel, it may apply for registration as a user in respect of that type of fuel that does not form part of its covered facility activities, if the registered emitter uses, in the ordinary course of its business, fuel of that type in a non-covered activity in a listed province. For more information on registered users of fuel, refer to Fuel Charge Notice FCN7, Users Under the Greenhouse Gas Pollution Pricing Act.

A registered emitter is also required to be registered as a user of combustible waste if it burns combustible waste, such as tires or asphalt shingles, in a listed province for the purpose of producing heat or energy. For more information on registered users of combustible waste, refer to Fuel Charge Notice FCN7.

Cancelling a registration

A registered emitter that no longer wishes to be registered or no longer meets the requirements for voluntary registration (for example, if it no longer operates, or is ineligible to operate, a covered facility) may request that the CRA cancel its registration. The registered emitter must notify the CRA in writing when this occurs, noting the reason for requesting the cancellation and the effective date.

The registered emitter can submit the request electronically using the “Submit documents” function in My Business Account or by mail to the Sudbury Tax Centre at the address listed in the section “Applying for registration” above. Filing and reporting requirements remain in effect until the effective date of cancellation.

The CRA may also cancel a registration if it is satisfied that the registration is no longer necessary, after giving the person reasonable notice. In this case, the CRA will notify the person of the cancellation and the effective date of the cancellation.

Information on the fuel charge

Generally, a charge applies to 21 types of fuel delivered, transferred, used, produced, imported or brought into Manitoba, New Brunswick, Ontario or Saskatchewan beginning April 1, 2019, and Nunavut or Yukon beginning July 1, 2019. A charge also applies on combustible waste when it is burned in a listed province for the purpose of producing heat or energy.

Registered emitter

As mentioned above, fuel can be delivered to a registered emitter without a charge being payable, at that time, when the registered emitter provides an exemption certificate to the registered distributor that delivers the fuel. For more information, refer to the section “Exemption certificates” in this notice.

A charge becomes payable by the registered emitter if the fuel is later diverted from its covered facility. This charge is explained in the following section of this notice.

A charge also becomes payable by a registered emitter if it brings fuel into a listed province from a place in Canada, imports fuel at a location in a listed province from outside Canada, or produces fuel in a listed province. For more information on the charge for bringing or importing fuel, refer to the section “Importing fuel at a location in a listed province or bringing fuel into a listed province” of this notice, and for more information on the charge when producing fuel that does not form part of the covered facility activities, refer to the section “Producing fuel in a listed province”.

Diversion of fuel from a covered facility or intended for use at a covered facility

A charge applies under subsections 22(1) and (3) when a registered emitter removes fuel from its covered facility in a listed province. The charge becomes payable at that time if any of the following circumstances apply:

  • the fuel had previously been delivered to the registered emitter by a registered distributor in respect of that type of fuel and an exemption certificate had been provided to the registered distributor by the registered emitter; or
  • the fuel had previously been brought to a covered facility of the registered emitter and a rebate under section 44 is payable to the registered emitter in respect of the fuel and the listed province.

A charge also applies under subsection 22(2) and is payable at the time a registered emitter uses fuel in a listed province otherwise than in its covered facility or delivers fuel to another person unless the other person is a registered distributor in respect of that type of fuel and an exemption certificate has been provided by the registered distributor to the registered emitter. The charge applies to the extent that the fuel had previously been delivered to a location that is not a covered facility of the registered emitter by a registered distributor in respect of that type of fuel and an exemption certificate was provided to the registered distributor by the registered emitter in respect of the delivery. The charge payable under subsection 22(2) does not apply if the charge under subsection 22(1) applies in respect of the fuel and the listed province.

The charge under subsections 22(1) to (3) is not payable if any of the following circumstances applies:

  • fuel removed from the covered facility of the registered emitter in the listed province and delivered to another person that is a registered distributor in respect of that type of fuel and that registered distributor provides an exemption certificate to the registered emitter;
  • fuel removed from the covered facility of the registered emitter in the listed province and brought to another of its covered facilities in the listed province;
  • the person is not a registered emitter at the time the person removes the fuel from the covered facility (instead, a charge under subsection 22(9) or (10) may apply when the person ceases to be registered as an emitter); or
  • the person is a registered distributor in respect of that type of fuel at the time the fuel is removed from the covered facility.

The amount of the charge under subsections 22(1) to (3) is determined in accordance with section 40. For more information, refer to the section “Calculating the charge payable by a registered emitter in respect of fuel and a listed province” in this notice.

Ceasing to be a covered facility

A charge applies under subsections 22(6) and (7) when fuel is held by a registered emitter at its facility or property, or is in transit to its facility or property, at a time at which the facility or property ceases to be a covered facility of the registered emitter if any of the following circumstances apply:

  • the fuel had previously been delivered to the registered emitter by a registered distributor in respect of that type of fuel and an exemption certificate was provided to the registered distributor by the registered emitter; or
  • the fuel had previously been brought to a covered facility of the registered emitter and a rebate under section 44 is payable to the registered emitter in respect of the fuel.

The charge becomes payable at the time a facility or property of a person in a listed province ceases to be a covered facility in the listed province.

The charge under subsection 22(6) or (7) in respect of fuel is not payable if any of the following applies:

  • the person is not a registered emitter at the time the facility or property ceases to be a covered facility of the person (instead, a charge under subsection 22(9) or (10) may apply when the person ceases to be registered as an emitter); or
  • the person is a registered distributor in respect of that type of fuel at the time the facility or property ceases to be a covered facility of the person.

The amount of the charge under subsection 22(6) or (7) is determined in accordance with section 40. For more information, refer to the section “Calculating the charge payable by a registered emitter in respect of fuel and a listed province” in this notice.

Ceasing to be an emitter

A charge applies under subsections 22(9) and (10) when fuel is either held by a registered emitter at its covered facility or is in transit to its covered facility at a time when the CRA cancels its registration as an emitter if any of the following circumstances apply:

  • the fuel had previously been delivered to the registered emitter by a registered distributor in respect of that type of fuel and an exemption certificate was provided to the registered distributor by the registered emitter; or
  • the fuel had previously been brought to a covered facility of the registered emitter and a rebate under section 44 became payable to the registered emitter in respect of the fuel.

The charge becomes payable at the time the CRA cancels the person’s registration as an emitter.

The amount of the charge under subsection 22(9) or (10) is determined in accordance with section 40. For more information, refer to the section “Calculating the charge payable by a registered emitter in respect of fuel and a listed province” in this notice.

Subsection 22(11) provides that the charge under subsection 22(9) or (10) is not payable if the person is a registered distributor in respect of that type of fuel at the time the CRA cancels the person’s registration as an emitter.

Subsection 22(12) provides that the charge under subsection 22(1), (2), (6) or (9) is not payable by a registered emitter if a charge in respect of the fuel is payable by the registered emitter under section 37. Under this section, a registered emitter must pay a charge if it provides an exemption certificate containing a false declaration to a registered distributor that delivers fuel to it. For more information, refer to the section “Exemption certificates” of this notice.

Importing fuel at a location in a listed province or bringing fuel into a listed province

Under section 19, a charge becomes payable when a registered emitter imports fuel at a location in a listed province or brings fuel into a listed province. The charge becomes payable at the time the fuel is imported or brought into the listed province by the registered emitter. The amount of the charge is determined under section 40. Subsection 19(3) provides that the charge is not payable if the registered emitter is also registered as a distributor.

Furthermore, under subsection 19(4), a charge is not payable by a registered emitter if the fuel is brought into the listed province, or is imported at a location in a listed province, in a supply tank of a vehicle and the fuel is for use in the operation of the vehicle or an auxiliary component of the vehicle (for example, the vehicle’s heater or air conditioner) or of an attached vehicle (for example, the heater or air conditioner of a trailer attached to the vehicle).

Under subsection 19(5), the exception in subsection 19(4) does not apply to fuel that is brought into a listed province, or imported at a location in a listed province, by a person if the fuel is a type of qualifying motive fuel and is brought into a listed province or imported by the person in a supply tank of a specified commercial vehicle of the person and the person:

  • is a registered emitter or is a registered importer or a registered user in respect of that type of fuel; and
  • is required to be registered as a road carrier in respect of that type of fuel but is not so registered.

Producing fuel in a listed province

Under section 21, a charge becomes payable when a registered emitter produces fuel in a listed province, unless the registered emitter is also a registered distributor in respect of that type of fuel. The charge becomes payable at the time the fuel is produced in the listed province by the registered emitter. The amount of the charge must be determined under section 40.

Registered emitter that is also a registered distributor

A registered emitter that is also a registered distributor is also required to comply with all the rules and obligations that apply to registered distributors. Generally, a registered distributor must pay a charge under section 17 in respect of a type of fuel at the time it delivers fuel of that type in a listed province to a person that does not provide an exemption certificate. A charge also applies under section 18 when a registered distributor that is also a registered emitter uses fuel of a type in a listed province otherwise than at its covered facility or for a non-covered activity.

For more information on registered distributors, refer to Fuel Charge Notice FCN2.

Registered emitter that is also a registered road carrier

A registered emitter that is also a registered road carrier is required to also comply with all the rules and obligations that apply to registered road carriers. Under section 34, a registered road carrier must pay a charge determined under section 40 if the net fuel quantity, determined under section 32, for a reporting period of the registered road carrier is a positive amount.

For more information on registered road carriers, refer to Fuel Charge Notice FCN6.

Registered emitter that is also a registered user of fuel

A registered emitter that is also a registered user of fuel, which is used in activities that do not form part of the covered facility activities, is required to comply with all the rules and obligations that apply to registered users of fuel. A registered user of fuel must pay a charge under section 23 on fuel that is used in a listed province otherwise than in a non-covered activity or delivered to another person under certain circumstances.

For more information on registered users of fuel, refer to Fuel Charge Notice FCN7.

Registered emitter that is also a registered user of combustible waste

A registered emitter that is also a registered user of combustible waste is required to also comply with all the rules and obligations that apply to registered users of combustible waste. A registered user of combustible waste that burns combustible waste in a listed province for the purpose of producing heat or energy must pay a charge under section 25.

For more information on registered users of combustible waste, refer to Fuel Charge Notice FCN7.

Exemption certificates

An exemption certificate is a document that is provided by certain persons, including registered emitters, to a registered distributor to enable the registered distributor to deliver fuel in a listed province without the application of the charge at the time of delivery.

A registered distributor can deliver fuel to a person that is registered as an emitter without a charge being applied at the time of delivery if the registered emitter provides an exemption certificate to the registered distributor in accordance with section 36. The exemption certificate must include a declaration that the person is a registered emitter and that the fuel is for use at its covered facility.

To use an exemption certificate, registered emitters may obtain and complete Form L401, Fuel Charge Exemption Certificate. For the purpose of the fuel charge, an exemption certificate does not have an expiry date.

The exemption certificate must be signed and provided to the registered distributor that delivers the fuel, and it can be used for subsequent deliveries made by the same registered distributor to the same registered emitter as long as the conditions for the exemption continue to be met. The registered distributor must retain a copy of the exemption certificate.   

Section 37 sets out the consequences of making a false declaration on an exemption certificate. Where a particular person delivers fuel in a listed province to another person that provides an exemption certificate and makes a false declaration, the other person becomes liable to pay the charge otherwise payable, a penalty of 25% of the amount of the charge and any other additional penalties and interest that may be applicable. Paragraph 37(1)(c) further provides that if the particular person knows, or ought to know, that the declaration is, at that particular time, false, both the particular person and the other person are jointly and severally, or solidarily, liable for the payment of the charge in respect of the fuel and the listed province, the penalty mentioned above and any related interest and penalties.

Filing and reporting

The reporting period of a registered emitter is a calendar month. A registered emitter must file a return monthly with the CRA, even if there is no amount owing. The return must be filed by the end of the month following the reporting period.

Forms to complete

The quantity of fuel subject to a charge must be reported by fuel type and listed province. A registered emitter must file Form B400, Fuel Charge Return – Registrant, for each reporting period, as well as Form B400-3, Fuel Charge Return Schedule – Registered Emitter.

More than one type of registration

If the registered emitter holds more than one type of registration, it must report fuel by type and listed province for each type of registration. This means the registered emitter must file Form B400 for each registration type and once for each reporting period, as well as

Section 104 provides that a registered emitter must keep its records for 6 years after the end of the year to which they relate.

A registered emitter must determine and pay the net charge, in the case of fuel, by type and for each listed province for a reporting period for which a return and accompanying return schedule(s) must be filed.

Calculating the charge payable by a registered emitter in respect of fuel and a listed province

A registered emitter must pay a charge under sections 19, 21 and 22 in respect of a type of fuel and a listed province on the quantity of fuel in respect of which the charge becomes payable.

Therefore, the charge payable is calculated using the following formula, which is set out in subsection 40(1):

A × B
Where  
A is the quantity of fuel in respect of which the charge becomes payable
B is the rate in respect of fuel of that type for the listed province applicable at the time the charge becomes payable

Example – Charge payable calculation 

In August 2019, a registered emitter removes 1,000 litres of light fuel oil (diesel) from its covered facility located in a listed province. The light fuel oil had previously been delivered to the registered emitter by a registered distributor in respect of that type of fuel, and the registered emitter had provided an exemption certificate to the registered distributor. The registered emitter must therefore pay a charge in respect of the light fuel oil when it is removed from its covered facility, as explained in the “Diversion of fuel from a covered facility or intended for use at a covered facility” section above.

The applicable rate for light fuel oil is $0.0537 per litre for the listed province.

The charge is calculated using the formula A × B

where

A  is 1,000 litres (the quantity of fuel diverted from the facility)
B  is $0.0537 per litre (the rate for light fuel oil (diesel) in the listed province in 2019)

The charge payable by the registered emitter for the diversion of the light fuel oil (diesel) in respect of that listed province for its reporting period is $53.70 (1,000 litres × $0.0537 per litre).

Calculating the net charge

Under section 71, every person that is required to file a return must, in the return, determine the net charge for the reporting period of the person for which the return is required to be filed.

After calculating the charge(s) payable and the rebate(s)Footnote 2, if applicable, in respect of fuel and the listed province(s), the registered emitter must determine the net charge for the reporting period for which the return is required to be filed.

The net charge of a registered emitter for a particular reporting period is calculated using the following formula, which is set out in section 71:

A + B
Where  
A

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

C – D

where

C

is the total of all amounts, each of which is a charge in respect of fuel, other than a charge under subsection 20(3), or combustible waste and the listed province that becomes payable by the person in the particular reporting period

 

D

is the total of all amounts, each of which is an amount of a rebateFootnote 2, other than a rebate for a payment in error under section 49 or a net charge rebate under subsection 71(4), in respect of the listed province payable by the CRA for a reporting period and that is claimed by the person in the return that is required to be filed under section 69 for the particular reporting period

B

is 0 at this timeFootnote 3

If the net charge for a reporting period of a registered emitter is a positive amount, the registered emitter must pay that amount to the Receiver General no later than the day on or before which the return for the reporting period is required to be filed (that is, by the end of the month following the reporting period for which the net charge becomes payable). For example, fuel diverted from a covered facility during the month of April must be reported and the charge paid by the end of May.

Interest and/or penalties may apply to late payments. For information on payment methods, go to Payments to the Canada Revenue Agency.

If the net charge for a reporting period of a registered emitter is a negative amount, the registered emitter may claim the amount of that net charge as a net charge rebate in the return filed under section 69 for that reporting period. The rebate is payable to the registered emitter by the CRA.

Example – Net charge calculation 

In 2019, a company is a responsible person for Covered Facility A and Covered Facility B. Both facilities are located in the same listed province. The company is registered as an emitter with the CRA.

During a reporting period, 10,000 litres of light fuel oil is moved from Covered Facility A to Covered Facility B.

Trucks operating with light fuel oil from Covered Facility A leave the premises of the covered facility to buy material off-site in a listed province. The trucks use 500 litres of light fuel oil outside the covered facility during the reporting period.

The registered emitter also imports 15,000 litres of gasoline from the United States and brings it into its facility for use at its covered facilities.

Because the fuel is removed from a covered facility of the registered emitter in a listed province and is brought to another covered facility of the registered emitter in the listed province, a charge is not applicable on the 10,000 litres of light fuel oil.

A charge is payable on the 500 litres of light fuel oil used in the trucks during the reporting period as the trucks left the premises of the covered facility.

A charge is payable on the 15,000 litres of gasoline at the time of importation in a listed province, under section 19, as explained in the section “Importing fuel at a location in a listed province or bringing fuel into a listed province” above. However, a registered emitter could claim a rebate for that same amount, as explained in the section “Fuel brought to a covered facility” below.

As described in the section “Calculating the net charge” above, the registered emitter’s net charge for the reporting period is calculated using the formula A + B

where

A  is C − D

where

C  is $689.85 [(500 litres of light fuel oil × $0.0537 per litre) + (15,000 litres of gasoline × $0.0442 per litre) = $26.85 + $663]
D  is $663

B  is $0

Therefore,

A  is $26.85 ($689.85 − $663)

B  is $0

The registered emitter’s net charge for that reporting period is $26.85 ($26.85 + $0).

Special rules

Fuel brought into a listed province on behalf of a registered emitter

Under section 10, when another person transports fuel into a listed province on behalf of a registered emitter, the registered emitter, and not the person transporting the fuel, is considered to have brought the fuel into the listed province.

Similar rules apply when fuel is removed from a listed province.

Fuel in transit through a listed province

Under section 11, fuel in transit through a listed province is deemed not to have been brought into the listed province if the following conditions are met:

  • a quantity of fuel is brought into a listed province from a place in Canada in the course of the transportation of the fuel to a place outside the listed province;
  • the fuel is transported without being stored in the listed province (otherwise than in a manner that is solely incidental to the transportation); and
  • the person bringing the fuel into the listed province is registered otherwise than only as a road carrier in respect of that type of fuel (including if that person is registered as an emitter).

Similar rules apply under section 12 for imported fuel that is in transit through a listed province.

Fuels in a mixture

Under section 16, a mixture of 2 or more fuels is deemed to be fuel of the type that is present in the highest proportion in the mixture. Therefore, the rate to be used when calculating the amount of the charge payable in respect of a mixture is the rate for the type of fuel present in the highest proportion in the mixture.

Biogasoline, biodiesel and biomethane

When biogasoline contained in gasoline, biodiesel contained in light fuel oil, or biomethane contained in natural gas exceeds a certain threshold, the number of litres in the case of gasoline or light fuel oil, or cubic metres in the case of marketable natural gas (MNG) or non-marketable natural gas (NMNG), is adjusted through the following formulas. 

Gasoline that contains more than 10% biogasoline

Under subsection 8(5), the quantity of gasoline is calculated using the following formula:

A × (100% − B) ÷ 95%
Where  
A is the number of litres that the gasoline occupies at 15°C
B is the proportion of biogasoline in the product

Example – Biogasoline 

A registered emitter has 100 litres of gasoline that contains 12% biogasoline.

The quantity of gasoline that is subject to the charge is calculated using the formula A × (100% − B) ÷ 95%

where

A  is 100 litres (the number of litres that the gasoline occupies at 15°C)
B  is 12% (the proportion of biogasoline)

Therefore, 100 litres × (100% − 12%) ÷ 95% equals 93 litres of gasoline.

Because the gasoline contains 12% biogasoline, only 93 of the 100 litres are subject to the charge.

Light fuel oil that contains more than 5% biodiesel

Under subsection 8(6), the quantity of light fuel oil is calculated using the formula:

A × (100% − B) ÷ 98%
Where  
A is the number of litres that the light fuel oil occupies at 15°C
B is the proportion of biodiesel in the product

Example 1 – Biodiesel 

A registered emitter has 100 litres of light fuel oil that contains 2% biodiesel.

The formula does not apply because the proportion of biodiesel contained in the quantity of light fuel oil does not exceed 5%. Therefore, the full quantity of 100 litres will be used in the calculation of the charge payable.


Example 2 – Biodiesel


A registered emitter has 100 litres of light fuel oil that contains 6% biodiesel.

The quantity of light fuel oil that is subject to the charge is calculated using the formula A × (100% − B) ÷ 98%

where

A  is 100 litres (the number of litres that the light fuel oil occupies at 15°C)
B  is 6% (the proportion of biodiesel)

Therefore, 100 litres × (100% − 6%) ÷ 98% equals 96 litres of light fuel oil.

Because the light fuel oil contains 6% biodiesel, only 96 of the 100 litres are subject to the charge.

Natural gas that contains biomethane

Under subsection 8(7), the quantity of MNG or NMNG is calculated using the formula:

A × (100% − B)
Where  
A is the number of cubic metres that the MNG or NMNG occupies at 15°C and 101.325 kPa
B is the proportion of biomethane in the product

Example – Biomethane 

A registered emitter has 100 cubic metres of MNG that contains 2% biomethane.

The quantity of MNG that is subject to the charge is calculated using the formula A × (100% − B)

where

A  is 100 cubic metres (the number of cubic metres that the MNG or NMNG occupies at 15°C and 101.325 kPa)
B  is 2% (the proportion of biomethane)

Therefore, 100 cubic metres × (100% − 2%) equals 98 cubic metres of MNG.

Because the MNG contains 2% biomethane, only 98 of the 100 cubic metres are subject to the charge.

Claiming a rebate

A registered emitter may claim a rebate under section 43, 44 or 49, as explained below.

Under section 51, a rebate will not be paid to a person at any time unless the person has filed all returns of which the CRA has knowledge and that are required to be filed on or before that time by the person under the Excise Tax Act, the Income Tax Act, the Excise Act, 2001, and the Air Travellers Security Charge Act.

Fuel removed from a listed province

Under subsection 43(1), a rebate must be paid to a person that is a registered emitter and that removes a quantity of fuel from a listed province at a particular time if, at an earlier time in a particular reporting period:

  • the person brought the quantity of fuel into the listed province from a place in Canada or imported the fuel at a location in the listed province and a charge under section 19 was payable by the person in respect of the fuel and the listed province, and that charge was taken into account in the determination of the net charge for the particular reporting period of the person;
  • the person removed the quantity of fuel from a covered facility of the person in the listed province and a charge under subsection 22(1) or (2):
    • became payable by the person at the earlier time in respect of the quantity of fuel and the listed province; and
    • is taken into account in the determination of the net charge for the particular reporting period of the person; or
  • the quantity of fuel was held by the person at, or the quantity of fuel was in transit to, a facility or property of the person in the listed province that ceased, at the earlier time, to be a covered facility of the person and a charge under subsection 22(6) or (7):
    • became payable by the person at the earlier time in respect of the quantity of fuel and the listed province; and
    • is taken into account in the determination of the net charge for the particular reporting period of the person.

Subsection 43(2) provides that the amount of the rebate under subsection (1) is equal to the amount of the charge referred to in whichever of paragraphs 43(1)(a) to (c) applies.

The rebate under section 43 is not to be paid in respect of a particular reporting period unless an application for a rebate is filed as part of Form B400-3 with the CRA:

  • no later than the day on or before which the return under section 69 (Form B400) is required to be filed for the last reporting period of the person that ends within 2 years after the end of the particular reporting period; and
  • with Form B400 and any related schedule in respect of the reporting period in which the amount of the rebate is taken into account in determining the net charge for the reporting period.

Fuel brought to a covered facility

Under subsection 44(1), a rebate must be paid to a person that is a registered emitter and that brings a quantity of fuel to a covered facility of the person in a listed province at a particular time for use at a covered facility of the person if, at an earlier time in a particular reporting period:

  • the person brought the quantity of fuel into the listed province from a place in Canada or imported the fuel at a location in the listed province and a charge under section 19 was payable by the person in respect of the quantity of fuel and the listed province at the time the fuel was imported or brought in and, if that charge was payable under section 19, it was taken into account in the determination of the net charge for the particular reporting period of the person;
  • the person removed the quantity of fuel from a covered facility of the person in the listed province and a charge under subsection 22(1) or (2) was payable by the person at the earlier time in respect of the quantity of fuel and the listed province and that charge was taken into account in the determination of the net charge for the particular reporting period of the person; or
  • the quantity of fuel was held by the person at, or the quantity of fuel was in transit to, a facility or property of the person in the listed province that ceased, at the earlier time, to be a covered facility of the person and a charge under subsection 22(6) or (7):
    • became payable by the person at the earlier time in respect of the quantity of fuel and the listed province; and
    • is taken into account in the determination of the net charge for the particular reporting period of the person.

Subsection 44(2) provides that the amount of the rebate under subsection 44(1) is equal to the amount of the charge referred to in whichever of paragraphs 44(1)(a) to (c) applies.

The rebate under section 44 is not to be paid in respect of a particular reporting period unless an application for a rebate is filed as part of Form B400-3 with the CRA:

  • no later than the day on or before which the return under section 69 is required to be filed for the last reporting period of the person that ends within 2 years after the end of the particular reporting period; and
  • with Form B400 and any related schedule in respect of the reporting period in which the amount of the rebate is taken into account in determining the net charge for the reporting period.

Payment in excess of the amount payable

Under section 49, a person may claim a rebate if it paid an amount in excess of the amount of the charge that was payable. The rebate is available whether the amount was paid by mistake or otherwise. The amount of the rebate is equal to the amount of the excess.

The rebate payable under section 49 for an amount paid in excess of the amount payable is not to be paid to a person to the extent that:

  • the amount was assessed; or
  • the amount was taken into account as an amount required to be paid for a reporting period for which the CRA has assessed the person.

This rebate is not to be included in the calculation of the net charge. Instead, a registered emitter that intends to claim this rebate must submit an amended Form B400 and any related schedule to the CRA.

Any amended return must be filed with the CRA within 2 years of the earlier of:

  • the day that the amount was taken into account in determining the net charge for a reporting period of the registered emitter; and
  • the day that the amount was paid to the Receiver General.

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 registrant, go to Contact Information – Excise Duties, Excise Taxes, Fuel Charge and Air Travellers Security Charge.

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