Vol. 139, No. 49 — December 3, 2005

Regulations Amending the Brewery Regulations

Statutory authority

Excise Act

Sponsoring agency

Canada Customs and Revenue Agency

REGULATORY IMPACT
ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Description

The purpose of the Regulations Amending the Brewery Regulations is to modify the requirements for excise duty payments by brewers licensed under the Excise Act. These changes will extend the payment due date to the last day of the month following the month in which the beer was produced and will apply to production for all months of the year. Licensed brewers will continue to file one production return for each calendar month.

Section 5 of the Brewery Regulations requires brewers to pay excise duty on beer they produce by the second to last business day of the month following the month in which the beer was produced, except for the months of March and April. For the month of March, brewers are required to pay the excise duty by the second to last business day of that month for the production period ending two days prior to that day. For production from one day prior to the second to last business day of March to the last day of April, brewers are required to pay the excise duty by the second to last business day of May.

The result of these changes will be that brewers' excise duty payment periods will coincide with their production reporting periods. This will simplify and reduce the administrative burden for both the brewers and the Canada Revenue Agency (CRA). Section 37 of the Excise Act will continue to require that licensed brewers' monthly production returns be filed by the tenth working day of the following month.

Alternative

The alternative to amending the Brewery Regulations would be to maintain the current requirements. Such an alternative is considered to be unacceptable, because the current requirements are confusing and more burdensome for both the brewing industry and the CRA.

Benefits and costs

The simplification of the excise payment requirements for brewers will result in some cost savings to both the CRA and the brewing industry, and less confusion for both. It will also eliminate the cash-flow burden that brewers have because of the requirement to make two excise duty payments in the month of March.

There will be no decrease in the reported annual revenue as the federal government now accounts for revenues on an accrual basis. Upon implementation, there will be a one-time negative cash flow in the last month of the fiscal year that will be offset by a corresponding positive cash flow in the first month of the subsequent fiscal year.

Consultation

The CRA consulted with the Department of Finance regarding the cash flow impacts as a result of the proposed changes. The Department of Finance expressed no objection to the changes.

The Brewers Association of Canada, whose members account for 98% of domestic beer production, indicated its support for these changes. Because of the positive and clear benefits to all brewers, consultations with the brewing industry were limited to this Association.

Compliance and enforcement

The CRA is responsible for compliance issues related to the brewing industry, including verifying monthly production returns and excise duty payments. These activities will continue and will be made easier with these regulatory changes.

Contact

Mr. Ron Hagmann, CGA, Acting Manager, Excise Duty Operations—Alcohol, Excise Duties and Taxes Division, Excise and GST/HST Rulings Directorate, Policy and Planning Branch, Place de Ville, 20th Floor, 320 Queen Street, Ottawa, Ontario K1A 0L5, (613) 954-4208 (telephone), (613) 954-2226 (fax).

PROPOSED REGULATORY TEXT

Notice is hereby given that the Governor in Council, pursuant to subsection 174(1) of the Excise Act, proposes to make the annexed Regulations Amending the Brewery Regulations.

Interested persons may make representations with respect to the proposed Regulations within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Mr. Phil McLester, Policy and Planning Branch, Canada Customs and Revenue Agency, 20th Floor, Tower A, Place de Ville, 320 Queen Street, Ottawa, Ontario K1A 0L5.

Persons making representations should identify any of those representations the disclosure of which should be refused under the Access to Information Act, in particular under sections 19 and 20 of that Act, and should indicate the reasons why and the period during which the representations should not be disclosed. They should also identify any representations for which there is consent to disclosure for the purposes of that Act.

Ottawa, November 28, 2005

DIANE LABELLE 
Acting Assistant Clerk of the Privy Council 

REGULATIONS AMENDING THE BREWERY REGULATIONS

AMENDMENTS

1. The definition "business day" in section 2 of the Brewery Regulations (see footnote 1) is repealed.

2. Section 5 of the Regulations is replaced by the following:

5. The duty imposed under the Act in respect of beer produced during a month shall be paid not later than the last day of the month following the month during which the beer was produced.

COMING INTO FORCE

3. These Regulations come into force on the day on which they are registered.

[49-1-o]

Footnote 1

C.R.C., c. 565

NOTICE:
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