Excise and GST/HST News - No. 105

December 2018

Cannabis excise duty

As mentioned in the Excise and GST/HST News No. 104, Bill C 74, The Budget Implementation Act, 2018, No. 1, received royal assent on June 21, 2018. This act implemented a number of measures including amendments to the Excise Act, 2001 relating to cannabis excise duty. The amendments provide for a new federal excise duty framework on most legally available cannabis products. The Government of Canada subsequently announced the coming into force date of October 17, 2018, for the legalization of non‑medical cannabis.

As of October 17, 2018, a cannabis licence under the Excise Act, 2001 is required to cultivate, produce or package cannabis products. Please refer to Excise Duty Notice EDN52, Obtaining and Renewing a Cannabis Licence for information. Entities who have not been issued a cannabis license by the Canada Revenue Agency (CRA) as of October 17, 2018 who possess non-duty paid cannabis products will not be compliant with the Excise Act, 2001, and could be subject to enforcement action, including seizure and destruction of all cannabis products.

Licenced cultivators, producers, or packagers of cannabis or cannabis products must file a return by completing Form B300, Cannabis Duty and Information Return for each calendar month. Cannabis licensees should send the completed return to the CRA no later than the last day of the month that follows the calendar month to which the return relates. For example, persons accounting for cannabis excise duty starting in October 2018 must file their return for October by November 30, 2018. Even if there is nothing to report for a calendar month, licensees must send the completed return by the deadline.

Excise Act, 2001 draft regulatory and legislative proposals

On September 17, 2018, the Department of Finance released for consultation a set of draft regulatory and legislative proposals under the Excise Act, 2001 that would provide for the additional cannabis duty rates for each province or territory that has signed a Coordinated Cannabis Taxation Agreement with the Government of Canada, and in certain provinces, an adjustment to the additional cannabis duty rate.

These rates were effective October 17, 2018, when non‑medical cannabis became available for legal retail sale. Please refer to Excise Duty Notice EDN55, Calculation of Cannabis Duty and Additional Cannabis Duty on Cannabis Products for more detailed information.

Canadians were invited to provide comments by October 17, 2018, on additional regulatory proposals that would provide:

  • exemptions for certain entities to allow the possession in a jurisdiction of cannabis products stamped for a different jurisdiction, under certain conditions;
  • the ability for third parties to possess cannabis excise stamps for specific purposes; and
  • exemptions from the proposed excise duty for certain cannabis-based products that are not intended for human consumption.

More information

Cultivators, producers and packagers of cannabis products should refer to the following technical information and forms the CRA has recently published for cannabis duty licensees:

Excise Duty Notices:

Forms:

To remain up to date with the new excise duty technical publications go to the CRA electronic mailing lists web page and subscribe to the Excise Technical Publications mailing list.

For general information regarding the cannabis excise duties on cannabis products please go to canada.ca/cannabis-excise. To make a general enquiry on the application of excise duty on cannabis products call 1-866-330-3304 or send an email to cannabis@cra-arc.gc.ca. Please do not include any confidential information in your email.

Bill C-86 − Budget Implementation Act, 2018, No. 2

On November 6, 2018, Bill C-86, the Budget Implementation Act, 2018, No. 2, received second reading.  Bill C-86 includes most of the draft legislative proposals released on July 27, 2018 relating to outstanding measures announced in the 2018 federal budget as well as various other previously announced GST/HST legislative proposals and other measures relating to the Excise Tax Act, the Air Travellers Security Charge Act and the Excise Act, 2001.

These measures include:

Carbon emission allowances

Proposed measures previously announced on June 27, 2018, relate to the manner in which GST/HST is to be paid and reported in respect of taxable supplies of carbon emission allowances made in Canada, such as those traded in cap-and-trade systems. Information on these measures was published in Excise and GST/HST News, No. 104.

Investment limited partnerships

Proposed measures include legislative and regulatory changes which were announced on September 8, 2017 and in the 2018 federal budget. More information is published in Excise and GST/HST News, No. 104.

Excise duty on cannabis

Proposed measures include an amendment to the definition of dutiable amount in the Excise Duties on Cannabis Regulations and minor amendments to two penalty provisions to ensure consistency between the English and French versions of the Excise Act, 2001.

GST/HST printed book rebate for certain public service bodies

Proposed amendments include changes that pertain to the rules governing the printed book rebate available to certain public service bodies. The proposed amendments are intended to clarify that a specified person would generally be ineligible for a printed book rebate when the person intends to transfer ownership of the printed book or other specified property as part of a single supply of another property or service.

Reassessment period – requirement for information and compliance orders

Proposed measures relate to the Excise Tax Act, Excise Act, 2001 and the Air Travellers Security Charge Act. These measures propose to introduce a "stop-the-clock" rule for requirements for information served to taxpayers and for compliance orders and would extend the reassessment period of a taxpayer by the period of time during which the requirement or compliance order is contested.

Unlicensed diesel wholesalers – excise tax rebate

Proposed measures would allow a vendor to claim an excise tax rebate on diesel fuel sold for the generation of electricity (subject to certain restrictions), provided the quantity of the diesel fuel is at least 1,000 litres. Currently it is only the purchaser that can claim such a rebate.

Sharing information for criminal matters

Proposed measures would facilitate the sharing of information for criminal matters by:

  • allowing the legal tools available under the Mutual Legal Assistance in Criminal Matters Act to be used with respect to the sharing of criminal tax information under Canada's tax treaties, Tax Information Exchange Agreements and the Convention on Mutual Administrative Assistance in Tax Matters;
  • enabling the sharing of tax information under mutual legal assistance agreements in respect of acts that, if committed in Canada, would constitute offences listed in the Criminal Code; and
  • enabling confidential information under Part IX of the Excise Tax Act and the Excise Act, 2001 to be disclosed to Canadian police officers in respect of offences listed in the Criminal Code.

Draft tax legislation − GST/HST holding corporation rules

Draft legislative proposals relating to GST/HST holding corporation rules were released by the Department of Finance on July 27, 2018. Proposed changes relate to the rules that allow holding corporations to claim input tax credits in respect of the GST/HST paid or payable on certain inputs that could reasonably be regarded as being in relation to the shares or indebtedness of a related corporation if the related corporation meets a property test. This test requires all or substantially all of the property of the related corporation to have been property acquired, imported or brought into a participating province for consumption, use or supply in the course of its commercial activities.

Generally, it is proposed that the property test would be amended, to instead require that all or substantially all of the property of the related corporation be property manufactured, produced, acquired, imported or brought into a participating province for consumption, use or supply in the course of its commercial activities. This amendment would also apply to the “takeover fees rule” in subsection 186(2) of the Excise Tax Act. The amendment would apply prior to July 28, 2018 as well as after July 27, 2018.

Also, it is proposed that effective July 28, 2018, more specific requirements would be used for determining whether a holding corporation may be eligible for an input tax credit in respect of the GST/HST paid or payable for a particular input based on the purpose for which the input was acquired.

These proposed amendments were not included in Bill C-86.

Greenhouse Gas Pollution Pricing Act

The Budget Implementation Act, 2018, No. 1, which received royal assent on June 21, 2018, contains the Greenhouse Gas Pollution Pricing Act that outlines the federal carbon pollution pricing system. As part of the Government of Canada’s initiative to implement a federal greenhouse gas emissions pricing structure, and taking into consideration provincial greenhouse gas emissions pricing systems, the Government has developed a federal carbon pollution pricing system composed of a fuel charge that applies on fossil fuels and an output‑based pricing system for industrial facilities.

On October 23, 2018, the Department of Finance Canada announced the next steps in the Government of Canada’s climate change plan including draft regulations amending Part 1 of Schedule 1 and Schedule 2 to the Greenhouse Gas Pollution Pricing Act and draft amendments to the Fuel Charge Regulations. 

The federal system will apply in provinces and territories where a carbon pricing mechanism has not been put into place or where the pricing mechanism does not meet the federal standard. As proposed, the CRA will be responsible for administering and enforcing the fuel charge component of the federal system beginning April 2019 in Manitoba, New Brunswick, Ontario and Saskatchewan, and July 2019 in Yukon and Nunavut.

Persons that have business activities in a listed province, such as producers, distributors, emitters, importers or certain users of fuel and combustible waste, as well as persons that are air, marine, rail or road carriers, may have to apply for registration with the CRA for the purposes of the fuel charge. Unless otherwise specified, the CRA recommends that applications for registration be submitted prior to the implementation of the fuel charge on April 1, 2019 for the proposed listed provinces of Manitoba, New Brunswick, Ontario and Saskatchewan and July 1, 2019 for the proposed listed provinces of Nunavut and Yukon.

Detailed information notices regarding the fuel charge will be published shortly.

New online filing option for the GST/HST new housing rebate for owner-built homes

Have you recently built or substantially renovated your home? If so, you may be eligible for a GST/HST new housing rebate. The new housing rebate for owner-built homes allows an individual to recover some of the GST/HST paid to construct or substantially renovate their home. Effective October 22, 2018, you are able to file an application for this rebate online using your CRA My Account. This option will be available on the main page of your My Account profile under Related Services.

For complete details and information on all eligibility requirements for the GST/HST new housing rebate for owner-built homes, refer to Guide RC4028, GST/HST New Housing Rebate, or go to GST/HST rebates. For more information go to My Account.

New email notifications from the CRA

In June 2018 the CRA launched an improved email notification service for businesses. This service sends email notifications when there is mail to view in My Business Account and when important changes are made to your account information.

When you sign up for email notifications from the CRA, we will send you an email to confirm your registration. After that, we will send you an email when:

  • you have new mail to view in My Business Account;
  • your address is changed;
  • your banking information for direct deposit is changed; or
  • mail sent to you by the CRA has been returned, meaning you need to update your mailing address.

To register for this service, go to My Business Account, select “Manage notification preferences”, and add your email address. If you were registered for our old “Online mail” service, you were automatically registered to receive email notifications from the CRA. If you would like to stop receiving these notifications, log into My Business Account and remove your email address.

For more information, go to Email notifications from the CRA - Businesses.

Prescribed rates of interest

The prescribed annual rate of interest in effect from January 1, 2019 to March 31, 2019, on overdue amounts payable to the Minister is 6%. The prescribed annual rate of interest on amounts owed by the Minister (such as, rebates or refunds) is 2% for corporate taxpayers and 4% for non-corporate taxpayers. These rates are applicable to income tax, excise tax, the softwood lumber products export charge, GST/HST, the air travellers security charge (ATSC) and excise duty on wine, spirits, tobacco and cannabis.

The prescribed annual rate of interest respecting excise duty on beer, on overdue amounts payable for the indicated period, is set at 4%. Refund interest rates are not applicable for amounts owed by the Minister (such as, rebates or refunds) for excise duty that is in relation to beer.

Prescribed annual rates of interest for GST/HST, excise tax, softwood lumber products export charge, ATSC excise duty (wine, spirits, tobacco, cannabis), income tax
PERIOD January 1, 2019 to
March 31, 2019
October 1, 2018 to
December 31, 2018
July 1, 2018 to
September 30, 2018
April 1, 2018 to
June 30, 2018
Refund Interest
Corporate Taxpayers
2% 2% 2% 2%
Refund Interest
Non-Corporate Taxpayers
4% 4% 4% 4%
Arrears and Instalment Interest  6% 6% 6% 6%
Prescribed annual rates of interest for excise duty on beer
PERIOD January 1, 2019 to
March 31, 2019
October 1, 2018 to
December 31, 2018
July 1, 2018 to
September 30, 2018
April 1, 2018 to
June 30, 2018
Arrears Interest Excise duty - beer 4% 4% 4% 4%

Prescribed interest rates for previous years are available on Canada.ca at Prescribed interest rates.

What’s new in publications

The following is a list of new or revised excise and GST/HST forms and publications.

Excise forms

Excise duty circulars

Excise duty memoranda

Excise duty notices

GST/HST guides

GST/HST info sheets

GST/HST memoranda

GST/HST notices

GST/HST forms

All GST/HST, excise duty and excise taxes and special levies publications can be found on the CRA website. Go to the Technical information – GST/HST, Excise taxes and other levies and Excise duty and webpages.

To receive email notification as soon as a document is published on the CRA website, go to electronic mailing lists and subscribe to the RSS feed for all new CRA publications and forms, or subscribe to any number of mailing lists for different types of publications.

Contact us

More information

Forms and publications

  • All GST/HST technical publications and GST/HST related forms are available on the Canada.ca website. Go to GST/HST related forms and publications.
  • To access all other forms and publications on the Canada.ca website go to Forms and publications.
  • To order forms and publications by telephone, call 1-800-959-5525.

To make a GST/HST enquiry by telephone:

  • for GST/HST general enquiries, call Business Enquiries at 1-800-959-5525;
  • for GST/HST technical enquiries, call GST/HST Rulings at 1-800-959-8287.

If you are located in Quebec, call Revenu Québec at 1-800-567-4692 or visit their website at revenuquebec.ca.

If you are a selected listed financial institution (whether or not you are located in Quebec) and require information on the GST/HST or the QST, go to GST/HST and QST - Financial institutions, including selected listed financial institutions or

  • for general GST/HST or QST enquiries, call Business Enquiries at 1-800-959-5525;
  • for technical GST/HST or QST enquiries, call GST/HST Rulings SLFI at 1-855-666-5166.

Account enquiries

For general information and to make enquiries regarding your account you can:

  • view answers to common enquiries, or submit a written enquiry using the online “Enquiries service” on “My Business Account”;
  • view account information online at E-services for Businesses; or
  • call Business Enquiries at 1-800-959-5525.

For online access to your GST/HST, air travellers security charge, excise tax and duty accounts (such as viewing up-to-date account balances and transactions, transferring payments and more), go to:

For enquiries regarding the status of specific GST/HST domestic rebate claims, call Business Enquiries at 1-800-959-5525.

Help

For technical support using our online services:

  • business accounts, call 1-800-959-5525
  • teletypewriter users, call 1-800-665-0354
  • calls outside of Canada and the United States, call collect at 1-613-940-8497

Please have the screen number (bottom right) and, if applicable, the error number and message received on hand when calling.

The Excise and GST/HST News is published quarterly and highlights recent developments in the administration of the GST/HST, First Nations goods and services tax (FNGST) and First Nations tax (FNT), air travellers security charge (ATSC) as well as excise taxes and duties. If you would like to receive a link to each new edition of the Excise and GST/HST News as it is published, subscribe to the electronic mailing list.

This publication is provided for information purposes only and does not replace the law, either enacted or proposed. Please note that any commentary in this newsletter regarding proposed measures should not be taken as a statement by the CRA that such measures will in fact be enacted into law in their current form. Comments or suggestions about the newsletter should be sent to the Editor, Excise and GST/HST News, Legislative Policy and Regulatory Affairs Branch, CRA, Ottawa, ON K1A 0L5.

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