Excise taxes, excise duties, air travellers security charge and fuel charge

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• Excise taxes
• Excise duties
• Air travellers security charge
• Fuel charge

Excise taxes

Excise taxes are imposed on:

• fuel-inefficient vehicles including station wagons, vans and sport utility vehicles
• air conditioners designed for use in automobiles, station wagons, vans, or trucks; and
• gasoline, diesel fuel, aviation gasoline, and aviation fuel

Schedule I of the Excise Tax Act sets out the excise tax rates for each of these goods.

Manufacturers who manufacture goods that are subject to excise tax are required to obtain a manufacturer's licence ("E" licence), unless they qualify as a small manufacturer. The total annual sales must not exceed $50,000 to qualify as a small manufacturer.

A person may qualify to obtain a wholesaler's licence ("W" licence), which allows them to purchase or import goods subject to excise tax for resale without paying the excise tax at that time of purchase. With a "W" licence, the excise tax is only collected and remitted when the goods are sold.

For goods manufactured and sold in Canada, the excise tax is payable either by a licensed manufacturer or a licensed wholesaler at the time the goods are delivered to the purchaser, unless the goods are sold under conditions where the excise tax is exempt. For goods that are imported into Canada, the excise tax is payable by the importer in accordance with the Customs Act.

Under certain circumstances, a person may claim a refund of the excise taxes paid.

For more information, go to Excise taxes and other levies technical information or call 1-866-330-3304.

Excise duties

Excise duties are charged on spirits, wine, beer, tobacco products, cannabis products and vaping products. The rates of excise duty on:

• spirits, wine, tobacco products, cannabis products and vaping products are set out in the Excise Act, 2001
• beer are set out in the Excise Act

When these goods are manufactured or produced in Canada, duty is generally payable at the time of:

• packaging for spirits, wine, tobacco products and beer
• delivery to a purchaser for cannabis products
• stamping for vaping products

Generally, when these goods are imported into Canada, duty is payable by the importer at the time of importation. The exception to this is for vaping products imported by a vaping product licensee for stamping in Canada.

All persons who manufacture or produce spirits, wine, beer, tobacco products, cannabis products, and vaping products in Canada must be licensed. Most licensees must provide security of at least $5,000.

For more information, go to Excise duties technical information. You may also contact your regional excise office. These offices are listed at Contact Information – Excise and Specialty Tax Directorate.

Air travellers security charge

The Air travellers security charge (ATSC) is applied on an air transportation service that includes a chargeable emplanement. A chargeable emplanement is an embarkation by an individual at a listed airport on an aircraft operated by an air carrier (with certain exceptions). The Schedule to the Air Travellers Security Charge Act identifies the listed airports where the ATSC would apply.

The ATSC is collected by registered air carriers (or their agents) when the airline ticket is purchased. If no consideration is paid, the ATSC is collected when the ticket is issued. If no consideration is paid and no ticket is issued, the ATSC is collected at the time of emplanement.

All air carriers that provide an air transportation service that includes a chargeable enplanement must register to collect the ATSC.

To register, you must fill out Form B248, Registration Form Under the Provisions of the Air Travellers Security Charge Act and send it to:

Canada Revenue Agency
Prince Edward Island Tax Centre
275 Pope Road
Summerside PE C1N 6A2

Registered air carriers are required to file Form B249, Air Travellers Security Charge Return, on a monthly basis, unless they have been authorized by the CRA to file their returns semi-annually. For information on how to file this return online, go to Digital services for businesses.

For more information on the ATSC, go to Air travellers security charge technical information.

Individuals in Canada or the United States with ATSC registration or account-related questions may contact the Prince Edward Island Tax Centre toll free at 1-877-432-5472. Individuals outside these countries may call 1-613-221-3073. Individuals in Canada or the United States with technical questions may contact the CRA toll free at 1-866-330-3304.

Fuel charge

The fuel charge is implemented by the Government of Canada 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 of the Act is administered by the CRA and provides for a charge on fuel (the fuel charge), which applies to 21 types of fuel^{Footnote 1} and to combustible waste. Schedule 1 of the Act also includes the list of provinces and territories where the federal fuel charge applies. These are known as listed provinces.
• Part 2 of the Act, administered by Environment and Climate Change Canada, provides an output-based pricing system for industrial facilities. For more information, go to Output-Based Pricing System.

Generally, the charge applies to fuel that is delivered, transferred, used, produced, imported in, or brought into listed provinces or to combustible waste when it is burned in a listed province for the purposes of producing heat or energy. The Act also provides for 12 registration types and, depending on the person's business activities, a person may be required or permitted to register for one or more registration types. Specific relief from the fuel charge may be possible through the use of an exemption certificate.

The reporting period of registered persons is either monthly or quarterly. A registered person must file a return with the CRA, even if there is no amount owing. A person that is not registered may also be required to report amounts owing depending on their business activities. The return must be filed by the end of the month following the reporting period.

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 and Specialty Tax Directorate.

Forms and publications

• Form L15, Application for Licence under the Provisions of the Excise Tax Act
• Form L1, Application for a Brewer's Licence
• Form L63A, Application for an Alcohol Licence or Registration
• Form L63T, Application for a Tobacco Licence, a Tobacco Dealer Licence, or a Duty Free Shop Licence
• Form L63W, Application for an Excise Warehouse Licence or a Special Excise Warehouse Licence
• Form L300, Cannabis Licence Application under the Excise Act, 2001
• Form L400, Fuel Charge Registration
• Form L400-1, Fuel Charge Registration Schedule
• Form L600, Vaping Product Licence Application
• Form L601, Registration for Vaping Stamping Regime