1st Session, 37th Parliament,
49-50 Elizabeth II, 2001

House of Commons of Canada

BILL C-13

An Act to amend the Excise Tax Act

      Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

SHORT TITLE

Short title

1. This Act may be cited as the Sales Tax and Excise Tax Amendments Act, 2001.

R.S., c. E-15

EXCISE TAX ACT

2. (1) Subsection 23(7) of the Excise Tax Act is amended by adding the word ``or'' at the end of paragraph (b) and by adding the following after paragraph (b):

    (c) the sale of a new motor vehicle designed for highway use, or a chassis therefor, to a person described in paragraph (h) of the definition ``manufacturer or producer'' in subsection 2(1) who is a manufacturer licensed for the purposes of this Part.

R.S., c. 15 (1st Supp.), s. 12(2)

(2) Paragraphs 23(7)(e) and (f) of the Act are repealed.

(3) Subsection (1) and subsection (2), to the extent that it repeals paragraph 23(7)(f) of the Act, are deemed to have come into force on January 1, 1994 and apply to sales made after 1993.

(4) Subsection (2), to the extent that it repeals paragraph 23(7)(e) of the Act, is deemed to have come into force on January 1, 1994 and applies in respect of motor vehicles, or chassis therefor, imported after 1993 by a person described in paragraph (g) of the definition ``manufacturer or producer'' in subsection 2(1) of the Act who is a manufacturer licensed for the purposes of Part III of the Act.

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

Waiver or cancellation of interest or penalty

88. The Minister may waive or cancel any amount otherwise payable to the Receiver General under this Act that is interest or a penalty calculated in the same manner as interest.

(2) Subsection (1) applies to amounts that, but for section 88 of the Act, as enacted by subsection (1), would become payable on or after the day on which this Act is assented to.

1993, c. 27, s. 44(1)

4. (1) The portion of subsection 179(2) of the Act after paragraph (c) is replaced by the following:

subsection (1) does not apply to a supply referred to in subparagraph (a)(i) and, except in the case of a supply of a service of shipping the property, any supply made by the registrant and referred to in that subparagraph is deemed to have been made outside Canada.

1993, c. 27, s. 44(1)

(2) The portion of subsection 179(3) of the Act after paragraph (c) is replaced by the following:

subsection (1) does not apply to a supply referred to in paragraph (a) and, except in the case of a supply of a service of shipping the property, any supply made by the registrant and referred to in that paragraph is deemed to have been made outside Canada.

(3) Section 179 of the Act is amended by adding the following after subsection (6):

Use of railway rolling stock

(7) For the purpose of clause (3)(c)(ii)(C), if the only use of railway rolling stock after physical possession of it is transferred as described in that clause and before it is next exported is for the purpose of transporting tangible personal property or passengers in the course of that exportation and that exportation occurs within sixty days after the day on which the transfer takes place, that use of the rolling stock is deemed to take place entirely outside Canada.

(4) Subsections (1) and (2) apply to supplies for which all of the consideration becomes due after February 28, 2000 or is paid after that day without having become due.

(5) Subsection (3) applies to railway rolling stock the physical possession of which is transferred by a registrant pursuant to a supply by way of sale by the registrant for which all of the consideration becomes due after February 28, 2000 or is paid after that day without having become due.

1993, c. 27, s. 78(1)

5. (1) Subsection 213.2(1) of the Act is replaced by the following:

Import certificate

213.2 (1) The Minister may, on the request of a registrant who imports goods, issue to the registrant, subject to such conditions as the Minister may specify, a written authorization (in this section referred to as an ``import certificate'') for the purpose of applying, on and after the effective date specified in the authorization, section 8.1 of Schedule VII in respect of goods of a particular class imported by the registrant, in which event the Minister shall assign to the registrant a number to be disclosed when the goods are accounted for under section 32 of the Customs Act.

(2) Subsection (1) is deemed to have come into force on February 1, 1992.

6. (1) Section 215 of the Act is amended by adding the following after subsection (2):

Value of goods re-imported after processing

(3) The value of goods that are being imported for the first time after having been processed (as defined in subsection 2(1) of the Value of Imported Goods (GST/HST) Regulations) outside Canada shall be determined for the purposes of this Division without regard to section 13 of those Regulations if

    (a) the value of the goods would, but for this subsection, be determined for the purposes of this Division under that section; and

    (b) they are the same goods, in their processed state, as other goods, or incorporate, as a result of their processing, other goods, that were last imported in circumstances in which no tax was payable under this Division because of section 8.1 or 11 of Schedule VII.

(2) Subsection (1) applies to goods imported after February 1992 except that, with respect to goods imported before January 1, 2001, the reference in subsection 215(3) of the Act, as enacted by subsection (1), to ``section 8.1 or 11'' shall be read as a reference to ``section 8.1''.

7. (1) Section 217 of the Act is amended by striking out the word ``or'' at the end of paragraph (b.3) and by adding the following after paragraph (c):

    (d) a supply of property that is a zero-rated supply only because it is included in section 1.1 of Part V of Schedule VI, if the recipient is not acquiring the property for consumption, use or supply exclusively in the course of commercial activities of the recipient and

      (i) an authorization of the recipient to use the certificate referred to in that section is not in effect at the time the supply is made, or

      (ii) the recipient does not export the property in the circumstances described in paragraphs 1(b) to (d) of that Part; or

    (e) a supply of property that is a zero-rated supply only because it is included in section 1.2 of Part V of Schedule VI, if the recipient is not acquiring the property for consumption, use or supply exclusively in the course of commercial activities of the recipient and

      (i) an authorization of the recipient to use the certificate referred to in that section is not in effect at the time the supply is made, or

      (ii) the recipient is not acquiring the property for use or supply as domestic inventory or as added property (as those expressions are defined in subsection 273.1(1)).

(2) Subsection (1) applies to supplies made after 2000.

8. (1) Subsection 218.1(1) of the Act is amended by striking out the word ``and'' at the end of paragraph (b), by adding the word ``and'' at the end of paragraph (c) and by adding the following after paragraph (c):

    (d) every person who is the recipient of a supply that is included in paragraph 217(d) or (e) and that is made in a particular participating province

(2) Section 218.1 of the Act is amended by adding the following after subsection (1):

Delivery in a province

(1.1) Section 3 of Part II of Schedule IX applies for the purpose of paragraph (1)(c).

(3) Subsection (1) applies to supplies made after 2000.

(4) Subsection (2) applies to supplies made after October 4, 2000.

9. (1) Subsection 221(2) of the Act is amended by striking out the word ``or'' at the end of paragraph (b) and by adding the following after paragraph (b):

    (b.1) the supplier and the recipient have made an election under section 2 of Part I of Schedule V in respect of the supply; or

1993, c. 27, s. 85(1)

(2) Subsection 221(3.1) of the Act is repealed.

(3) Subsection (1) applies to supplies made after October 4, 2000.

(4) Subsection (2) applies to supplies made after 2000.

1993, c. 27, s. 86(1)

10. (1) The portion of subsection 221.1(2) of the Act before paragraph (a) is replaced by the following:

Export certificate

(2) The Minister may, on the application of a person who is registered under Subdivision d, authorize the person to use, beginning on a particular day in a fiscal year of the person and subject to such conditions as the Minister may from time to time specify, a certificate (in this section referred to as an ``export certificate'') for the purpose of section 1.1 of Part V of Schedule VI, if it can reasonably be expected

1993, c. 27, s. 86(1)

(2) Subsection 221.1(4) of the Act is replaced by the following:

Notice of authorization

(4) If the Minister authorizes a registrant to use an export certificate, the Minister shall notify the registrant in writing of the authorization, its effective date and its expiry date and the number assigned by the Minister that identifies the registrant or the authorization and that must be disclosed by the registrant when providing the certificate for the purpose of section 1.1 of Part V of Schedule VI.

(3) Subsection (1) is deemed to have come into force on January 1, 2001.

(4) Subsection (2) applies to any authorization granted to a person after 2000, whether on the first application of the person or on the renewal of an authorization previously granted.

11. (1) The Act is amended by adding the following after section 236.1:

Adjustment if invalid use of export certificate

236.2 (1) If a registrant has received a supply of property (other than a supply that is included in any provision of Schedule VI other than section 1.1 of Part V of that Schedule) from a supplier to whom the registrant has provided an export certificate (within the meaning of section 221.1) for the purpose of that supply and an authorization of the registrant to use the certificate was not in effect at the time the supply was made or the registrant does not export the property in the circumstances described in paragraphs 1(b) to (d) of that Part, the registrant shall, in determining the net tax for the reporting period of the registrant that includes the earliest day on which tax in respect of the supply became payable or would have become payable if the supply were not a zero-rated supply, add an amount equal to interest, at the rate prescribed for the purposes of paragraph 280(1)(b) plus 4% per year compounded daily, on the total amount of tax in respect of the supply that was payable or would have been payable if the supply were not a zero-rated supply, computed for the period beginning on that earliest day and ending on the day on or before which the return under section 238 for that reporting period is required to be filed.

Adjustment if deemed revocation of export certificate

(2) If a registrant's authorization to use an export certificate (within the meaning of section 221.1) is deemed to have been revoked under subsection 221.1(6) effective immediately after the last day of a fiscal year of the registrant, the registrant shall, in determining the net tax for the first reporting period of the registrant following that year, add the amount determined by the formula

A x B/12

where

A is the total of

      (a) the product obtained when the rate set out in subsection 165(1) is multiplied by the total of all amounts each of which is consideration paid or payable by the registrant for a supply made in a non-participating province of an item of inventory acquired by the registrant in the year that is a zero-rated supply only because it is included in section 1.1 of Part V of Schedule VI, other than a supply in respect of which the registrant is required under subsection (1) to add an amount in determining net tax for any reporting period, and

      (b) the product obtained when the total of the rates set out in subsections 165(1) and (2) is multiplied by the total of all amounts each of which is consideration paid or payable by the registrant for a supply made in a participating province of an item of inventory acquired by the registrant in the year that is a zero-rated supply only because it is included in section 1.1 of Part V of Schedule VI, other than a supply in respect of which the registrant is required under subsection (1) to add an amount in determining net tax for any reporting period, and

B is the total of 4% and the rate of interest prescribed for the purposes of paragraph 280(1)(b) (expressed as a percentage per year) that is in effect on the last day of that first reporting period following the year.

Adjustment if invalid use of export distribution centre certificate

236.3 (1) If a registrant has received a supply of property (other than a supply that is included in any provision of Schedule VI other than section 1.2 of Part V of that Schedule) from a supplier to whom the registrant has provided an export distribution centre certificate (within the meaning of section 273.1) for the purpose of that supply and an authorization of the registrant to use the certificate was not in effect at the time the supply was made or the property was not acquired by the registrant for use or supply as domestic inventory or as added property (as those expressions are defined in subsection 273.1(1)) in the course of commercial activities of the registrant, the registrant shall, in determining the net tax for the reporting period of the registrant that includes the earliest day on which tax in respect of the supply became payable or would have become payable if the supply were not a zero-rated supply, add an amount equal to interest, at the rate prescribed for the purposes of paragraph 280(1)(b) plus 4% per year compounded daily, on the total amount of tax in respect of the supply that was payable or that would have been payable in respect of the supply if the supply were not a zero-rated supply, computed for the period beginning on that earliest day and ending on the day on or before which the return under section 238 for that reporting period is required to be filed.

Adjustment if export distribution centre conditions not met

(2) If an authorization granted to a registrant under subsection 273.1(7) is in effect at any time in a fiscal year of the registrant and the export revenue percentage of the registrant (as defined in subsection 273.1(1)) for that year is less than 90% or the circumstances described in paragraph 273.1(11)(a) or (b) exist with respect to the year, the registrant shall, in determining the net tax for the first reporting period of the registrant following the year, add the amount determined by the formula

A x B/12

where

A is the total of

      (a) the product obtained when the rate set out in subsection 165(1) is multiplied by the total of all amounts each of which is consideration paid or payable by the registrant for a supply made in a non-participating province of property acquired by the registrant in the year that is a zero-rated supply only because it is included in section 1.2 of Part V of Schedule VI, other than a supply in respect of which the registrant is required under subsection (1) to add an amount in determining net tax for any reporting period,

      (b) the product obtained when the total of the rates set out in subsections 165(1) and (2) is multiplied by the total of all amounts each of which is consideration paid or payable by the registrant for a supply made in a participating province of property acquired by the registrant in the year that is a zero-rated supply only because it is included in section 1.2 of Part V of Schedule VI, other than a supply in respect of which the registrant is required under subsection (1) to add an amount in determining net tax for any reporting period, and

      (c) the product obtained when the rate set out in subsection 165(1) is multiplied by the total of all amounts each of which is the value that is or would be, but for subsection 215(2), deemed under subsection 215(1) to be the value, for the purposes of Division III, of a good that was imported by the registrant in the year and in respect of which, by reason only of section 11 of Schedule VII, tax under that Division did not apply, and

B is the total of 4% and the rate of interest prescribed for the purposes of paragraph 280(1)(b) (expressed as a percentage per year) that is in effect on the last day of that first reporting period following the year.

(2) Subsection (1) is deemed to have come into force on January 1, 2001 and applies to supplies made after 2000.

1990, c. 45, s. 12(1)

12. (1) The definition ``single unit residential complex'' in subsection 254(1) of the Act is replaced by the following:

``single unit residential complex''
« immeuble d'habitation à logement unique »

``single unit residential complex'' includes

      (a) a multiple unit residential complex that does not contain more than two residential units, and

      (b) any other multiple unit residential complex if it is described by paragraph (c) of the definition ``residential complex'' in subsection 123(1) and contains one or more residential units that are for supply as rooms in a hotel, motel, inn, boarding house, lodging house or similar premises and that would be excluded from being part of the residential complex if the complex were a residential complex not described by that paragraph.

(2) Subsection (1) is deemed to have come into force on June 1, 1997 and applies for the purpose of determining any rebate of a person under section 254 of the Act in respect of a residential complex ownership of which is transferred to the person after May 1997.