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Her Excellency the Governor General recommends to the House of
Commons the appropriation of public revenue under the circumstances,
in the manner and for the purposes set out in a measure entitled ``An Act
respecting the taxation of spirits, wine and tobacco and the treatment
of ships' stores''.
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This enactment introduces a modern framework for the taxation of
spirits, wine and tobacco. It re-enacts existing provisions in the Excise
Act and the Excise Tax Act relating to the excise levies on these products,
together with technical improvements, and incorporates a range of new
provisions. The key features of the enactment include the following:
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(a) the continued imposition of a production levy on spirits, tobacco
products and raw leaf tobacco and the replacement of the existing
excise levy on sales of wine with a production levy at an equivalent
rate;
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(b) the replacement of the excise duty and excise tax on tobacco
products other than cigars with a single excise duty;
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(c) the introduction of excise warehouses to allow for the deferral of
the payment of the production levy on domestic and imported spirits
and wine to the time of sale to the retailer;
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(d) more comprehensive licensing requirements and new registra
tion requirements for persons carrying on activities in relation to
goods subject to duty;
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(e) explicit recognition of limited exemptions for certain goods
produced by individuals for their personal use;
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(f) tight new controls on the possession and distribution of goods on
which duty has not been paid;
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(g) modern provisions concerning the use of spirits and wine for
non-beverage purposes and the use of specially denatured alcohol;
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(h) updated administrative provisions, including new remittance,
assessment and appeal provisions that are similar to those under the
Goods and Services Tax/Harmonized Sales Tax legislation;
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(i) updated enforcement provisions, including new offence, penalty
and collection provisions; and
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(j) transitional provisions applicable to spirits, wine and tobacco
products produced before the enactment comes into force.
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This enactment also implements changes to the ships' stores
provisions, which were announced by the government on September
27, 2001. These changes broaden the enabling legislation for ships'
stores regulations and implement a temporary fuel tax rebate program
for certain ships that, as a result of amendments to the Ships' Stores
Regulations effective June 1, 2002, will no longer qualify for ships'
stores relief.
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Furthermore, this enactment implements the tobacco tax increases
announced by the government on November 1, 2001.
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Finally, the replacement of the existing provisions in the Excise Act
and the Excise Tax Act relating to the excise levies on spirits, wine and
tobacco necessitates consequential amendments to those Acts as well
as other Acts, including the Budget Implementation Act, 2000, the
Canada Customs and Revenue Agency Act, the Criminal Code, the
Customs Act, the Customs and Excise Offshore Application Act, the
Customs Tariff, the Export Act, the Importation of Intoxicating Liquors
Act, the Special Economic Measures Act and the Tax Court of Canada
Act.
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