E-15

An Act respecting excise taxes

1. This Act may be cited as the Excise Tax Act.

R.S., c. E-13, s. 1.

2. (1) The following definitions apply in this section, Parts I to VIII (other than section 121) and Schedules I to IV:

“accredited representative” [Repealed, 2002, c. 22, s. 366]

“Agency” means the Canada Revenue Agency continued by subsection 4(1) of the Canada Revenue Agency Act;

“Atlantic manufactured tobacco”[Repealed, 2001, c. 16, s. 16]

“bank” means a bank or an authorized foreign bank within the meaning of section 2 of the Bank Act;

“black stock”[Repealed, 2002, c. 22, s. 413]

“black stock cigarettes”[Repealed, 2002, c. 22, s. 413]

“black stock manufactured tobacco”[Repealed, 2001, c. 16, s. 16]

“cigar”[Repealed, 2002, c. 22, s. 366]

“cigarette” [Repealed, 2002, c. 22, s. 366]

“Commissioner” means the Commissioner of Revenue appointed under section 25 of the Canada Revenue Agency Act;

“cosmetics” means goods, whether possessing therapeutic or prophylactic properties or not, commonly or commercially known as toilet articles, preparations or cosmetics, that are intended for use or application for toilet purposes, or for use in connection with the care of the human body, including the hair, nails, eyes, teeth, or any other part or parts thereof, whether for cleansing, deodorizing, beautifying, preserving or restoring, and includes toilet soaps, shaving soaps and shaving creams, skin creams and lotions, shampoos, mouth washes, oral rinses, toothpastes, tooth powders, denture creams and adhesives, antiseptics, bleaches, depilatories, perfumes, scents and similar preparations;

“diesel fuel” includes any fuel oil that is suitable for use in internal combustion engines of the compression-ignition type, other than any such fuel oil that is intended for use and is actually used as heating oil;

“document” includes money, a security and a record;

“duty free shop” has the meaning assigned by subsection 2(1) of the Customs Act;

“foreign duty free shop” means a retail store that is located in a country other than Canada and that is authorized under the laws of that country to sell goods free of certain duties and taxes to individuals who are about to leave that country;

“foreign ships’ stores” means tobacco products taken on board a vessel or aircraft while the vessel or aircraft is outside Canada and that are intended for consumption by or sale to the passengers or crew while the passengers and crew are on board the vessel or aircraft;

“gasoline” means gasoline type fuels for use in internal combustion engines other than aircraft engines;

“health goods” means any material, substance, mixture, compound or preparation, of whatever composition or in whatever form, sold or represented for use in the diagnosis, treatment, mitigation or prevention of a disease, a disorder, an abnormal physical state or the symptoms thereof in human beings or animals or for use in restoring, correcting or modifying organic functions in human beings or animals;

“Indian”[Repealed, 2002, c. 22, s. 413]

“licensed tobacco manufacturer”[Repealed, 2001, c. 16, s. 16]

“manufactured tobacco”[Repealed, 2002, c. 22, s. 366]

“manufacturer or producer” includes

(a) the assignee, trustee in bankruptcy, liquidator, executor, liquidator of a succession or curator of any manufacturer or producer and, generally, any person who continues the business of a manufacturer or producer or disposes of his assets in any fiduciary capacity, including a bank exercising any powers conferred upon it by the Bank Act and a trustee for bondholders,

(b) any person, firm or corporation that owns, holds, claims or uses any patent, proprietary, sales or other right to goods being manufactured, whether by them, in their name or for or on their behalf by others, whether that person, firm or corporation sells, distributes, consigns or otherwise disposes of the goods or not,

(c) any department of the government of Canada or any province, any board, commission, railway, public utility, manufactory, company or agency owned, controlled or operated by the government of Canada or any province, or under the authority of the legislature or the lieutenant governor in council of any province, that manufactures or produces taxable goods,

(d) any person who sells, otherwise than in a retail store exclusively and directly to consumers, cosmetics that were not manufactured by him in Canada, other than a person who sells those cosmetics exclusively and directly to hairstylists, cosmeticians and other similar users for use in the provision of personal grooming services and not for resale,

(e) [Repealed, R.S., 1985, c. 12 (4th Supp.), s. 1]

(f) any person who, by himself or through another person acting for him, prepares goods for sale by assembling, blending, mixing, cutting to size, diluting, bottling, packaging or repackaging the goods or by applying coatings or finishes to the goods, other than a person who so prepares goods in a retail store for sale in that store exclusively and directly to consumers,

(g) any person who imports into Canada new motor vehicles designed for highway use, or chassis therefor,

(h) any person who sells, otherwise than predominantly to consumers, new motor vehicles designed for highway use, or chassis therefor,

(i) any person who sells goods enumerated in Schedule III.1, other than a person who sells those goods exclusively and directly to consumers, and

(j) any person who sells or leases prerecorded video cassettes that are new or have not been used in Canada, other than a person who sells or leases such goods exclusively and directly to consumers other than to consumers who lease such goods to other persons;

“Minister” means the Minister of National Revenue;

“mobile home” means a trailer unit not less than three metres wide by eight metres long, equipped with complete plumbing, electrical and heating facilities and designed to be towed on its own chassis to a building site for installation on a foundation and connection to service facilities at that site and to be used for residential, commercial, educational, institutional or industrial purposes, but does not include any free-standing appliances or furniture sold with the unit or any travel trailer, motor home, camping trailer or other vehicle or trailer for recreational use;

“modular building unit” means a building component or unit, the manufacture and assembly of which is completed or substantially completed before delivery to a construction site, that is designed for installation on a foundation and is composed of at least one room or area with finished walls, a finished floor and a finished ceiling, including installed plumbing, heating and electrical equipment appropriate to that room or area, and that, when installed on a foundation at the site, with or without other similarly manufactured and assembled components or units, forms a complete residential, commercial, educational, institutional or industrial building, but does not include any freestanding appliances or furniture sold with the unit;

“municipality” means

(a) an incorporated city, town, village, metropolitan authority, township, district, county or rural municipality or other incorporated municipal body however designated, or

(b) such other local authority as the Minister may determine to be a municipality for the purposes of this Act;

“operator” of a duty free shop means the person operating the duty free shop who is licensed as a wholesaler under Part VI and is deemed by subsection 55(2) to be a bona fide wholesaler or jobber;

“person” means an individual, partnership, corporation, trust, estate, or a body that is a society, union, club, association, commission or other organization of any kind whatever;

“prescribed” means

(a) in the case of a form, the information to be given on a form or the manner of filing a form, prescribed by the Minister, and

(b) in any other case, prescribed by regulation or determined in accordance with rules prescribed by regulation;

“record” includes an account, an agreement, a book, a chart or table, a diagram, a form, an image, an invoice, a letter, a map, a memorandum, a plan, a return, a statement, a telegram, a voucher, and any other thing containing information, whether in writing or in any other form;

“stamp” or “excise stamp” means a stamp prepared for the purposes of this Act pursuant to a direction of the Minister under section 60;

“telecommunication”[Repealed, 1993, c. 38, s. 86]

“this Act” means this Act except Part IX and Schedules V to X.

“tobacco stick” [Repealed, 2002, c. 22, s. 366]

(2) For the purposes of this Act, the expression "Her Majesty in right of a province" includes the governments of Yukon, the Northwest Territories and Nunavut and the expression "legislature of any province" includes the Council of the Northwest Territories and the Legislative Assembly of Yukon or Nunavut.

(2.1) For the purposes of this Act,

(a) related persons shall be deemed not to deal with each other at arm’s length; and

(b) it is a question of fact whether persons not related to each other were, at any particular time, dealing with each other at arm’s length.

(2.2) For the purposes of this Act, persons are related to each other if they are related persons within the meaning of subsections 251(2) to (6) of the Income Tax Act, except that

(a) references in those subsections to “corporation” shall be read as references to “corporation or partnership”; and

(b) references in those subsections to “shares” or “shareholders” shall, in respect of a partnership, be read as references to “rights” or “partners”, respectively.

(3) For the purposes of this Act, a person who is a manufacturer or producer within the meaning of paragraph (d), (i) or (j) of the definition of that term in subsection (1), other than a member of a class of small manufacturer or producer that is exempted by regulations made under subsection 54(2) from the requirement of subsection 54(1) to apply for a licence, and who imports into Canada

(a) cosmetics,

(b) [Repealed, R.S., 1985, c. 12 (4th Supp.), s. 1]

(c) goods enumerated in Schedule III.1, or

(d) prerecorded video cassettes that are new or have not been used in Canada

shall be deemed to be the manufacturer or producer in Canada thereof and not the importer thereof and the goods shall be deemed to be goods produced or manufactured in Canada and not imported goods.

(4) For the purposes of this Act, goods imported into Canada by a person who is a manufacturer or producer within the meaning of paragraph (f) of the definition of that term in subsection (1), other than a member of a class of small manufacturer or producer that is exempted by virtue of regulations made under subsection 54(2) from the requirement of subsection 54(1) to apply for a licence, that are prepared, as described in that paragraph, by or on behalf of that person in Canada for sale shall be deemed to be goods produced or manufactured in Canada and not imported goods.

(4.1) For the purposes of this Act, a person who is a manufacturer or producer within the meaning of paragraph (g) of the definition of that term in subsection (1), other than a member of a class of small manufacturer or producer that is exempted by virtue of regulations made under subsection 54(2) from the requirement of subsection 54(1) to apply for a licence, and who imports new motor vehicles designed for highway use, or chassis therefor, into Canada shall be deemed to be the manufacturer or producer in Canada thereof and not the importer thereof and the vehicles or chassis shall be deemed to be goods produced or manufactured in Canada and not imported goods.

(4.2) For the purposes of this Act, new motor vehicles designed for highway use, and chassis therefor, imported into Canada that are sold by a person who is a manufacturer or producer within the meaning of paragraph (h) of the definition of that term in subsection (1), other than a member of a class of small manufacturer or producer that is exempted by virtue of regulations made under subsection 54(2) from the requirement of subsection 54(1) to apply for a licence, shall be deemed to be goods produced or manufactured in Canada and not imported goods.

(5) For the purposes of this Act, a licensed wholesaler who gives away without charge, as free samples, replacement goods or parts or otherwise, goods on which taxes have not been paid under this Act is deemed to have retained the goods for his own use, unless

(a) he gives them away as free replacement goods or parts under a written warranty of the manufacturer of the goods to be replaced or of the goods into which the parts are to be incorporated; and

(b) the amount, if any, charged for the warranty is included in the sale price charged by the manufacturer for the goods to be replaced or the goods into which the parts are to be incorporated or, if those goods are imported goods, in the duty paid value thereof.

(5.1) For the purposes of this Act, a determination under paragraph (b) of the definition “municipality” in subsection (1) shall, if it so provides, be retroactive and be deemed to have come into force on a day prior to the day on which it is made, which prior day shall not be more than four years before the day on which the determination is made.

(6) Any reference in a regulation or order made before 1991 under an Act of Parliament to a refund, remission or other relief from or in respect of a tax, duty, excise or levy under

(a) the Excise Tax Act,

(b) the laws relating to customs or customs duties, or

(c) the laws relating to excise or duties of excise

shall, except where the regulation or order otherwise expressly provides, be deemed not to include a reference to a refund, remission or other relief from the tax imposed under Part IX.

(7) [Repealed, 2001, c. 16, s. 16]

R.S., 1985, c. E-15, s. 2; R.S., 1985, c. 15 (1st Supp.), s. 1, c. 7 (2nd Supp.), s. 1, c. 12 (4th Supp.), s. 1; 1990, c. 45, s. 1; 1993, c. 25, s. 54, c. 28, s. 78, c. 38, s. 86; 1994, c. 29, s. 1; 1998, c. 19, s. 275; 1999, c. 17, s. 145, c. 28, s. 158, c. 31, s. 247(F); 2000, c. 30, s. 2; 2001, c. 16, s. 16, c. 17, s. 233; 2002, c. 7, s. 166, c. 22, ss. 366, 413; 2005, c. 38, s. 99.

3. In this Part,

“exchange” means a group of persons formed for the purpose of exchanging reciprocal contracts of indemnity or inter-insurance with each other through the same attorney;

“insurer” means any corporation incorporated for the purpose of carrying on the business of insurance, any association of persons formed on the plan known as Lloyds whereby each associate underwriter becomes liable for a stated, limited or proportionate part of the whole amount insured under a contract of insurance, and any exchange;

“net premiums” means the gross premiums paid or payable under a contract of insurance, less dividends received or receivable in respect of the contract and less premiums returned on cancellation of the contract.

“Superintendent”[Repealed, 1999, c. 17, s. 146]

R.S., 1985, c. E-15, s. 3; R.S., 1985, c. 18 (3rd Supp.), s. 35; 1999, c. 17, s. 146.

4. (1) Every person resident in Canada by whom or on whose behalf a contract of insurance, other than a contract of reinsurance, is entered into or renewed against a risk ordinarily within Canada at the time the contract is entered into or renewed,

(a) with

(i) any insurer not incorporated under the laws of Canada or of any province or not formed in Canada, or

(ii) any exchange having its chief place of business outside Canada or having a principal attorney-in-fact whose chief place of business is outside Canada,

that at the time the contract is entered into or renewed is not authorized under the laws of Canada or of any province to transact the business of insurance, or

(b) with any insurer that at the time the contract is entered into or renewed is authorized under the laws of Canada or of any province to transact the business of insurance, if the contract is entered into or renewed through a broker or agent outside Canada,

shall, on or before April 30 in each year, pay to the Minister, in addition to any other tax payable under any other law, a tax of ten per cent on the net premiums paid or payable during the immediately preceding calendar year in respect of that insurance.

(2) Subsection (1) does not apply to

(a) any contract of life insurance, personal accident insurance, sickness insurance or insurance against marine risks, or any contract of insurance against nuclear risks to the extent that the insurance against nuclear risks is not, in the opinion of the Commissioner, available within Canada; or

(b) any other contract of insurance entered into after February 19, 1973 to the extent that the insurance is not, in the opinion of the Commissioner, available within Canada.

(3) For the purposes of this section, every corporation carrying on business in Canada shall be deemed to be a person resident in Canada.

(4) Where a contract of insurance is entered into or renewed through more than one broker or agent, or where payment of the premium or any part of the premium thereon is effected through more than one broker or agent, the contract shall, for the purposes of this Part, be deemed to have been entered into or renewed, as the case may be, through the broker or agent directly retained or instructed by the insured and not through any other broker or agent.

R.S., 1985, c. E-15, s. 4; 1999, c. 17, s. 147.

5. (1) Every person to whom section 4 applies shall, on or before April 30 in each year, make a return in writing to the Minister stating, with respect to each contract of insurance entered into or renewed by him or on his behalf during the immediately preceding calendar year and on which the net premiums are taxable under section 4,

(a) the name of the insurer;

(b) the amount of the insurance;

(c) the net premiums paid or payable during the immediately preceding calendar year; and

(d) if the contract was entered into or renewed as described in paragraph 4(1)(b), the name and address of the broker or agent outside Canada through whom the contract was entered into or renewed.

(2) Every person who, acting as a broker or agent, obtains, effects or places or assists in obtaining, effecting or placing any contract of insurance entered into or renewed as described in paragraph 4(1)(a), and on which the net premiums are taxable under section 4, shall, on or before March 15 in each year, make a return in writing to the Minister stating, with respect to each contract so entered into or renewed during the immediately preceding calendar year, the name and address of the person resident in Canada by whom or on whose behalf the contract was entered into or renewed and the net premiums paid or payable during that year.

(3) Every insurer that enters into or renews a contract of insurance as described in paragraph 4(1)(b), and on which the net premiums are taxable under section 4, shall, on or before March 15 in each year, make a return in writing to the Minister stating, with respect to each contract so entered into or renewed during the immediately preceding calendar year,

(a) the name and address of each person resident in Canada with whom or on whose behalf the contract was entered into or renewed;

(b) the net premiums paid or payable during the immediately preceding calendar year; and

(c) the name and address of the broker or agent outside Canada through whom the contract was entered into or renewed.

R.S., 1985, c. E-15, s. 5; R.S., 1985, c. 7 (2nd Supp.), s. 2.

6. The Commissioner or any officer or employee of the Agency appointed by the Commissioner may visit the office of any insurer, broker or agent and examine their books and records for the purpose of verifying any return required by this Part, and the Commissioner and that officer or employee have a right of access to those books and records at all reasonable hours.

R.S., 1985, c. E-15, s. 6; 1992, c. 1, s. 64; 1999, c. 17, s. 148.

7. (1) Every person who refuses or neglects to make a return as required by subsection 5(1) is liable to a penalty of five per cent of the amount of tax unpaid at the expiration of the time for filing the return.

(2) Every person who refuses or neglects to make a return as required by subsection 5(2) or (3) is liable to a penalty of ten dollars for each day of default or fifty dollars, whichever is the lesser.

R.S., 1985, c. E-15, s. 7; R.S., 1985, c. 7 (2nd Supp.), s. 3; 2003, c. 15, s. 94.