Evidence of meeting #183 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was back.
A video is available from Parliament.
Director, Sales Tax Division, Tax Policy Branch, Department of Finance
It facilitates the obtentions of tax-free diesel fuel for those who have small generators to generate electricity. In that sense, it's a relieving measure. That said, it does not have a fiscal impact, since there was another relief available for end-users, but they have to obtain the diesel fuel with the tax embedded first before claiming a refund.
As a result, you're facilitating the distribution of tax-free fuel for the purpose of generating electricity, as currently provided under the law.
Conservative
Pierre Poilievre Conservative Carleton, ON
They'll get the rebate even if the fuel was not taxed in the first place, with the proposed legislation.
Director, Sales Tax Division, Tax Policy Branch, Department of Finance
With the proposed legislation, the vendor would be able to claim the rebate, and it is expected that they will sell the fuel on a tax-out basis to the end purchaser, rather than having the end purchaser obtaining the diesel fuel tax-in and having to claim the rebate to the CRA. It facilitates the....
Conservative
Pierre Poilievre Conservative Carleton, ON
It's just the point at which the rebate is secured, rather than a change in the eligibility of the rebate.
Director, Sales Tax Division, Tax Policy Branch, Department of Finance
That's correct.
Brandon—Souris, CPC
Just to follow up on that then, it's more like the retailer's paying the tax than the end-user, or am I reversed?
Director, Sales Tax Division, Tax Policy Branch, Department of Finance
I'm sorry. I missed the beginning of the question.
Brandon—Souris, CPC
Is it the bulk retailer, the distributor of the fuel who's now paying the tax? Under the new act, under these changes, will it be the retailer as opposed to the end-user, or do I have it reversed?
Director, Sales Tax Division, Tax Policy Branch, Department of Finance
The original payment of the tax remains at the production or the wholesale level, as under the Excise Tax Act.
This is the ability to claim the refund that is being shifted to some vendors who are not licensed with the CRA. Those vendors, because they are not licensed, were not able before to claim a refund for a tax on the diesel fuel used to generate electricity; only the end-users were able to do so. With the proposed measure in that bill, those vendors who are not licensed would be able to claim the refund, and as such, be on a level playing field with their competitors, who are licensed wholesalers. It's quite technical in nature.
Brandon—Souris, CPC
Yes, and there's no change, then, for licensed vendors.
Director, Sales Tax Division, Tax Policy Branch, Department of Finance
For licensed vendors there are no changes. They are still able to claim their refund and sell the diesel fuel without the tax being embedded.
November 1st, 2018 / 10:30 a.m.
Brandon—Souris, CPC
Is this for small users, small generators, or is it used by some of the industries as well?
Director, Sales Tax Division, Tax Policy Branch, Department of Finance
There is a threshold that has been put in the legislation, the 1,000-litre threshold, so we're talking about relatively—
Director, Sales Tax Division, Tax Policy Branch, Department of Finance
Small, yes, but....
Director, Sales Tax Division, Tax Policy Branch, Department of Finance
Yes.
Liberal
Liberal
Liberal
Michael McLeod Liberal Northwest Territories, NT
I have a quick question. I just want to know how the figure of 1,000 litres was arrived at.
Director, Sales Tax Division, Tax Policy Branch, Department of Finance
We consulted Canadians and industry on the thresholds. We needed a threshold to ensure there was no avoidance or unintended diversions of diesel to taxable purposes, so that's how the threshold was arrived at, with consultations with industry.
Liberal
Director, Sales Tax Division, Tax Policy Branch, Department of Finance
The second measure is found under clauses 63, 67 and 68 of the bill, and relates to the taxation of cannabis.
Let me tell you up front that, in respect of clauses 67 and 68, these are housekeeping amendments required for two provisions of the excise taxation framework for cannabis in order to ensure consistency between the English and the French versions of the legislation. The main measure is found under clause 63.
