PART VII

AVIATION FUEL TAX REBATE

R.S., c. E-15

Excise Tax Act

1992, c. 29, s. 1

81. (1) The definition ``fuel tax rebate'' in subsection 68.4(1) of the Excise Tax Act is replaced by the following:

``fuel tax rebate''
« remise de taxe sur le combustible »

``fuel tax rebate'' means an amount payable under subsection (2), (3) or (3.1) ;

(2) Subsection 68.4(1) of the Act is amended by adding the following in alphabetical order:

``air carrier''
« transpor-
teur aérien »

``air carrier'' in a calendar year, means a person who is a carrier in the year and whose gross revenue for the year is derived primarily from the business of providing eligible air transportation services;

``aviation rebate limit''
« plafond de la remise aux transporteurs aériens »

``aviation rebate limit'' of a particular air carrier for a calendar year, means

      (a) where at every time in the year no other air carrier is related to the particular air carrier, $20,000,000, and

      (b) in any other case, the amount that the particular air carrier and all other persons (in this paragraph referred to as ``related air carriers'') each of which is an air carrier in the year and is related to the particular air carrier at any time in the year allocate, in an agreement in prescribed form filed with the Minister with the application described in paragraph (3.1)(b), to the particular air carrier for the year, provided that

        (i) if the total of the amounts so allocated for the year to the particular air carrier and all related air carriers is greater than $20,000,000, each amount so allocated is deemed to be nil, and

        (ii) if the particular air carrier and all related air carriers fail to file an agreement under this paragraph for the year, the Minister may allocate an amount to one or more of them for the year, which amount or the total of which amounts shall not exceed $20,000,000, and any amount so allocated by the Minister is deemed to have been so allocated by the particular air carrier and all related air carriers in such an agreement;

``eligible air transporta-
tion services''
« service de transport aérien admissible »

``eligible air transportation services'' means the carriage by aircraft of passengers or goods or both;

``ineligible use''
« fin inadmissi-
ble »

``ineligible use'' means any use other than the provision of eligible transportation services for commercial purposes or, where a rebate is paid under subsection (3.1), any use other than the provision of eligible air transportation services for commercial purposes, and for greater certainty the sale of fuel is an ineligible use;

(3) Section 68.4 of the Act is amended by adding the following after subsection (1):

Deemed not related

(1.1) For the purposes of this section, a corporation that is a Canadian-controlled private corporation within the meaning of subsection 125(7) of the Income Tax Act and another corporation to which it would otherwise be related at any time are deemed not to be related to each other at that time where the corporations are not associated with each other at that time within the meaning of subsection 127(1).

1992, c. 29, s. 1

(4) Subsection 68.4(4) of the Act is replaced by the following:

Aviation rebate

(3.1) Where a person who is an air carrier in a calendar year

    (a) has, in the year, purchased in Canada or imported aviation fuel for use by the person solely in the provision of eligible air transportation services, and

    (b) applies to the Minister, before the end of the sixth month following the end of the year in prescribed form for a fuel tax rebate in respect of that fuel,

the Minister shall, subject to this Part, pay a fuel tax rebate to the person equal to the lesser of four cents for each litre of that fuel and the person's aviation rebate limit for the year.

Limitation on rebates

(4) No fuel tax rebate shall be paid under this section

    (a) in respect of fuel used or to be used for an ineligible use ;

    (b) where subsection (2) or (3) applies, in respect of fuel that is purchased or imported by the carrier or trucker, as the case may be, before 1991 or after 1992;

    (c) where subsection (3.1) applies, in respect of fuel that is purchased or imported by the air carrier before 1996 or after 1999; or

    (d) to a person who is or has been bankrupt or to the trustee in bankruptcy of the person in respect of any fuel purchased or imported by the person or the trustee before the person is discharged from the bankruptcy.

1992, c. 29, s. 1

(5) Subsections 68.4(6) to (8) of the Act are replaced by the following:

Diverting fuel to ineligible uses

(6) Where a fuel tax rebate is paid to a person under this section in respect of fuel and the person uses the fuel for an ineligible use , the amount of the rebate paid is deemed to be a tax payable under Part III by the person at the time the fuel is so used .

Repayment of rebate

(7) Subject to subsections (8) and (9), a person to whom a fuel tax rebate was paid under subsection (2) or (3.1) may repay to the Receiver General all or part of the rebate.

Time for repayment

(8) A repayment made under subsection (7) in respect of a fuel tax rebate paid to a person in a taxation year of the person shall be made within the 90 day period that begins on any day on which the Minister sends to the person a notice of assessment of tax payable under Part I of the Income Tax Act by the person for the year, a notice of determination under subsection 152(1.1) of that Act in respect of the person for the year or a notification that no tax is payable under that Part by the person for the year.

(6) Paragraph 68.4(9)(c) of the Act is replaced by the following:

    (c) subsection 78(4) had required the tax to be paid on or before

      (i) in the case of a rebate under subsection (3.1), the later of January 1, 2000 and the last day of the month in which the person received the rebate, and

      (ii) in any other case , the last day of the month in which the person received the rebate; and

(7) Where a person has applied to the Minister of National Revenue under subsection 68.4(3.1) of the Act, as enacted by subsection (4), before the end of the sixth month after the end of the month in which this Act is assented to, the application is deemed to have been made on a timely basis.

R.S., c. 1 (5th Supp.)

Income Tax Act

82. (1) Subparagraph 12(1)(x.1)(ii) of the Income Tax Act is replaced by the following:

      (ii) the amount determined by the formula

10(A - B) - C

      where

      A is the total of all fuel tax rebates under subsections 68.4(2) and (3.1) of that Act received in the year by the taxpayer,

      B is the total of all amounts, in respect of fuel tax rebates under section 68.4 of that Act received in the year by the taxpayer, repaid by the taxpayer under subsection 68.4(7) of that Act, and

      C is the total of all amounts, in respect of fuel tax rebates under section 68.4 of that Act received in the year, deducted under subsection 111(10) in computing the taxpayer's non-capital losses for other taxation years;

(2) Subsection (1) applies to the 1997 and subsequent taxation years.

83. (1) Paragraph 87(2)(uu) of the Act is replaced by the following:

Fuel tax rebates

    (uu) for the purposes of paragraph 12(1)(x.1), the description of D.1 in the definition ``non-capital loss'' in subsection 111(8), and subsections 111(10) and (11), the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation.

(2) Subsection (1) applies to the 1997 and subsequent taxation years.

84. (1) The portion of subsection 111(10) of the Act before paragraph (b) is replaced by the following:

Fuel tax rebate loss abatement

(10) Where in a particular taxation year a taxpayer received an amount (in this subsection referred to as a ``rebate'') as a fuel tax rebate under subsection 68.4(2) or (3.1) of the Excise Tax Act, in computing the taxpayer's non-capital loss for a taxation year (in this subsection referred to as the ``loss year'') that is one of the 7 taxation years preceding the particular year, there shall be deducted the lesser of

    (a) the amount determined by the formula

10(A - B) - C

    where

    A is the total of all rebates received by the taxpayer in the particular year,

    B is the total of all amounts, in respect of rebates received by the taxpayer in the particular year, repaid by the taxpayer under subsection 68.4(7) of that Act, and

    C is the total of all amounts, in respect of rebates received in the particular year, deducted under this subsection in computing the taxpayer's non-capital losses for other taxation years; and

(2) The portion of subsection 111(11) of the Act before paragraph (b) is replaced by the following:

Fuel tax rebate - partnerships

(11) Where a taxpayer was a member of a partnership at any time in a fiscal period of the partnership during which it received a fuel tax rebate under subsection 68.4(2), (3) or (3.1) of the Excise Tax Act, the taxpayer is deemed

    (a) to have received at that time as a rebate under subsection 68.4(2), (3) or (3.1) , as the case may be, of that Act an amount equal to that proportion of the amount of the rebate received by the partnership that the member's share of the partnership's income or loss for that fiscal period is of the whole of that income or loss, determined without reference to any rebate under section 68.4 of that Act; and

(3) Subsections (1) and (2) apply to the 1997 and subsequent taxation years.

85. (1) Subparagraph 161(7)(a)(viii) of the Act is replaced by the following:

      (viii) any amount deducted , in respect of a repayment under subsection 68.4(7) of the Excise Tax Act made in a subsequent taxation year, in computing the amount determined under subparagraph 12(1)(x.1)(ii) ,

(2) Subsection (1) applies to the 1997 and subsequent taxation years.

86. (1) Paragraph 164(5)(a) of the Act is replaced by the following:

    (a) the deduction of an amount, in respect of a repayment under subsection 68.4(7) of the Excise Tax Act made in a subsequent taxation year, in computing the amount determined under subparagraph 12(1)(x.1)(ii) ,

(2) Paragraph 164(5.1)(a) of the Act is replaced by the following:

    (a) the deduction of an amount, in respect of a repayment under subsection 68.4(7) of the Excise Tax Act made in a subsequent taxation year, in computing the amount determined under subparagraph 12(1)(x.1)(ii),

(3) Subsections (1) and (2) apply to the 1997 and subsequent taxation years.

PART VIII

FUEL MEASUREMENT

R.S., c. E-15

Excise Tax Act

87. (1) The Excise Tax Act is amended by adding the following after section 23:

Definitions

23.01 (1) The definitions in this subsection apply in this section.

``fuel''
« combusti-
ble »

``fuel'' means gasoline, diesel fuel and aviation fuel.

``temperature compensated method''
« méthode fondée sur la compensation de la température »

``temperature compensated method'' means the method involving the measurement of the volume of fuel in litres that are corrected to the reference temperature of 15 degrees Celsius in accordance with the requirements imposed by or under the Weights and Measures Act.

``uncompensa -
ted method''
« méthode tradition-
nelle »

``uncompensated method'' means the method involving the measurement of the volume of fuel in litres that are not corrected to a reference temperature.

Measure-
ment of fuel volume

(2) For the purposes of determining the tax imposed under subsection 23(1) in respect of fuel, the volume of the fuel shall be measured in accordance with

    (a) the temperature compensated method, where that method is used by the manufacturer or producer of the fuel for the purpose of establishing the amount of fuel delivered and charged to the purchaser, or by the importer of the fuel to establish the amount of fuel imported; or

    (b) the uncompensated method, where that method is used by the manufacturer or producer of the fuel for the purpose of establishing the amount of fuel delivered and charged to the purchaser, or by the importer of the fuel to establish the amount of fuel imported.

Measure-
ment of fuel volume - licensed wholesalers

(3) For the purposes of determining the tax imposed under subsection 23(4) in respect of fuel sold by a licensed wholesaler, the volume of the fuel shall be measured in accordance with

    (a) the temperature compensated method, where that method is used by the licensed wholesaler for the purpose of establishing the amount of fuel delivered and charged to the purchaser; or

    (b) the uncompensated method, where that method is used by the licensed wholesaler for the purpose of establishing the amount of fuel delivered and charged to the purchaser.

(2) Subsection (1) is deemed to have come into force on February 19, 1997.

(3) For the purposes of the provisions of the Customs Act and the Excise Tax Act that provide for the payment of, or liability to pay, any interest, subsection (1) is deemed to have come into force as if this Act had been assented to on February 19, 1997.