Finance committee  I'm not sure I have the list. The legislation specifies the cases where the fuel charge applies, but it does not necessarily list the cases where it does not apply. I have a little trouble talking about what is not in the bill.

Finance committee  Yes. We have to know who can use them.

Finance committee  As an example, let me refer to the typical case of a registered distributor selling fuel to another registered distributor. In that context, the second distributor could show an exemption certificate so that the first distributor does not have to pay the fuel charge. The obligation to pay the charge would then be transferred to the second registered distributor.

Finance committee  On the exemption certificate, the CRA will likely publish a model with the information that is required. It is a piece of paper that the farmer is going to fill out. Essentially it works for every delivery of fuel the farmer will receive. He will have to present the certificate.

Finance committee  In terms of vehicles, what we try to do is to link to the Income Tax Act, because there are rules in the Income Tax Act that deal with vehicles—what is an automobile, what is not an automobile. The term “automobile” includes some pickup trucks. The way we see it is that the farmer will know, because under the Income Tax Act, you're not allowed the same deduction, the capital cost allowance, for an automobile versus a vehicle that is used for farming.

Finance committee  The fuel charge will only apply in listed provinces, and these listed provinces are the provinces that don't have a carbon pricing system in place that meets the federal standard.

Finance committee  Sure. I may go into a bit of details here—

Finance committee  —but these are detailed rules. In the case of a farmer, a registered distributor—the person who would normally pay the fuel charge—can deliver gasoline or light fuel oil. In the case of farmers, that is essentially diesel. They can deliver that to a farmer if the farmer certifies four things.

Finance committee  Can you clarify for me what rebate in Alberta you're referring to?

Finance committee  You're pointing to section 48, which is actually not the rebate that was discussed before. That is the money to be returned to the jurisdiction of origin. This is a different rebate. There's a full division about some.... There are a number of limited rebates that businesses that have paid the fuel charge might be entitled to receive in certain circumstances.

Finance committee  There's a rebate for fuel that is removed from the listed province. There's another rebate. I can explain that one to you too. It's that—

Finance committee  There's a rebate for fuel removed from the listed province. There's a rebate for fuel brought to a covered facility. There's a rebate for fuel used in a non-covered activity. There's a rebate for net fuel quantity; this deals with the special rules for the carriers. There's a rebate for an annual net fuel adjustment, which is a special rule for rail carriers.

Finance committee  I can't really talk about the system in Quebec because I'm not familiar with it. What I can say is that under this regime, the fuel distributors are the people who are going to pay the charge. The fuel will be paid, if it's delivered in a listed province—a listed province being a jurisdiction that will be listed in part 1 of schedule 1.There are rules for bringing in fuel to a listed province from another place in Canada, and in that case, the fuel charge under this system would apply, but there are also rules for relieving when the fuel is removed from a listed province to go somewhere else.

Finance committee  I'm going to answer this, but I'm pretty sure you're not going to like the answer. Essentially, the government believes that the plan is legally sound. I'm not at liberty and no one on this panel is at liberty to discuss whether there was legal advice provided. If it had been provided, it would be the subject of solicitor-client privilege.

Finance committee  The way this legislation was designed, there's a first part, the fuel charge part, and a second part, the output-based pricing system. The output-based pricing system is mainly an element that enables the making of regulations to implement the measures. In terms of the fuel charge, the government believes the rules that are spelled out here are enough to make the fuel charge operate, but this is a new scheme.