Skip to main content

Bill C-24

If you have any questions or comments regarding the accessibility of this publication, please contact us at



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 to amend the Excise Tax Act, a related Act, the Bankruptcy and Insolvency Act, the Budget Implementation Act, 1997, the Budget Implementation Act, 1998, the Budget Implementation Act, 1999, the Canada Pension Plan, the Companies' Creditors Arrangement Act, the Cultural Property Export and Import Act, the Customs Act, the Customs Tariff, the Employment Insurance Act, the Excise Act, the Income Tax Act, the Tax Court of Canada Act and the Unemployment Insurance Act''.


This enactment mainly implements proposed measures relating to the Goods and Services Tax and Harmonized Sales Tax (GST/HST) announced since March 20, 1997, including the sales tax initiatives proposed in the February 24, 1998 Budget. In addition, this enactment contains measures relating to other taxes and tariffs. In the area of tobacco taxes, this enactment implements the proposal, announced on November 5, 1999, to increase the excise taxes on certain tobacco products and to make permanent the existing surtax on tobacco manufacturers' profits. As well, it includes the measure to lower the tobacco export tax exemption, as proposed in the February 16, 1999 Budget.

In the area of First Nations taxes, this enactment makes three technical corrections to provisions of the Budget Implementation Acts of 1997, 1998 and 1999, which provided authority for certain First Nations to impose sales taxes on specific products. The amendments clarify the definitions of ``alcoholic beverage'' and ``alcohol'' for this purpose and ensure that the GST/HST ``small supplier rules'' apply in the context of these taxes.

This enactment also incorporates the repeal of the tax regime for split-run periodicals, as announced by the government on July 29, 1998. With respect to customs tariffs, it contains the measures proposed by the government on June 10, 1999 to increase the duty and tax exemption for returning residents who have been out of the country for at least seven days and to increase the quantity of wine that travellers may, in certain circumstances, bring into Canada on a duty and tax-free basis.

The GST/HST measures contained in this enactment are principally aimed at improving the operation of the tax in the affected areas and ensuring that the legislation accords with the policy intent. In some cases, adjustments have been made to the legislation as originally proposed in response to representations from the tax and business communities.

The principal GST/HST measures included in this enactment are as follows:

(1) Health and Education: provides a rebate of tax in respect of the cost of specially-equipped motor vehicles for persons with disabilities; exempts respite care services for individuals who have limited capacity for self-supervision and self-care due to an infirmity or disability; maintains the exemption for speech therapy services; ensures that osteopathic services are exempt; removes the requirement for psychologists to be registered in the Canadian Register of Health Service Providers in Psychology in order to provide exempt services; permits eyeglasses and contact lenses that are intended to be sold on a tax-free basis under prescription at the retail level to be sold on a tax-free basis at the pre-retail level as well; ensures that the existing exemption for second language training applies equally where the training is provided by vocational schools and individual contractors.

(2) Charities: allows charities operating bottle return depots and refunding bottle deposits to claim a reimbursement for the tax component of the amount refunded by the charity; refines the streamlined accounting method by which charities engaged in commercial activities determine their net GST/HST remittances; restores the specific exemption for the supply by charities of food, beverages and short-term accomodation where these are provided in the course of relieving poverty, suffering or distress of individuals; allows charities, including those that employ or provide employment-related assistance to individuals with disabilities, to avoid exemption in particular instances where they would prefer to charge tax so that they and their registered business customers are in a position to fully recover the tax paid on their purchases.

(3) Public Service Bodies: refines the rules relating to the administration of the rebates for hospital and school authorities, universities, public colleges and municipalities; in the HST participating province of Newfoundland and Labrador, entitles bodies that are hospital or school authorities, universities, public colleges or certain organizations treated like municipalities, and that qualify as charities or substantially government-funded non-profit organizations, to claim a 50% rebate of the non-recoverable provincial component of the HST incurred in respect of certain of their inputs.

(4) Provincial Gaming Authorities: clarifies the special rules for determining the net GST/HST that must be remitted by provincial gaming authorities.

(5) Provincial Crown Agents: provides that the same capital property rules that apply to public service bodies such as municipalities also apply to provincial Crown agents that agree to pay the GST/HST and recover it by way of input tax credits or rebates in the same manner as do other registrants.

(6) Oil, Gas and Electricity Industries: provides several relieving measures aimed at simplifying compliance with the GST/HST in the energy sector and ensuring that exports and sales to unregistered non-residents do not bear unrecoverable tax.

(7) Non-residents and Cross-border Transactions: extends the GST/HST visitor rebate in respect of short-term accommodation to campsite rentals; extends existing relieving provisions for foreign conventions and domestic conventions attended by non-residents by allowing a 50% rebate for the tax on the food and beverage component of the convention fee; removes GST/HST from air navigation services supplied by NAV CANADA in relation to international flights; provides consistent treatment between tax-free international transportation services and various separate charges that relate to such transportation; eliminates the requirement that payment for certain air travel from the United States to Canada be tendered outside Canada in order for the transportation service to be tax-free; provides that the supply of services related to a passenger transportation service is treated as having been made in a particular province if the supply of the passenger transportation service is made in that province; ensures that the tax relief on exports by common carriers is not provided if the goods are not ultimately exported; ensures that tax does not apply to imported replacement goods supplied for no extra charge by an unregistered non-resident warrantor; ensures that there is no unrecoverable tax on services supplied by a Canadian dealer to a non-resident warrantor.

(8) Business Arrangements: clarifies the treatment of exchanges between members of barter clubs; relieves more small independent contractors of direct selling organizations from having to register for GST/HST purposes; allows eligible Canadian partnerships to elect not to account for otherwise fully recoverable tax on certain transactions among members of a closely related group; simplifies the GST/ HST treatment of promotional allowances and reflects changes consequential to the introduction of the HST; corrects a problem of double taxation in leasing situations typically affecting doctors, dentists and other exempt suppliers; clarifies and aligns more closely the GSTHST provisions relating to meal and entertainment expenses with the treatment of these expenses under the Income Tax Act.

(9) Financial Sector: provides a level playing-field for credit card companies by repealing bad debt relief for retailers' related financing companies; clarifies the treatment of sales of accounts receivable; clarifies that management or administrative services provided to investment vehicles such as pension plans and segregated funds are subject to tax; provides a rebate to trusts governed by multi-employer pension plans of a portion of tax incurred on expenses relating to the plans; clarifies the application of the tax when a surety fulfils the obligations of a defaulting contractor by completing a construction project; ensures that precious metal refiners are entitled to the appropriate recovery of tax on purchases.

(10) Real Property: corrects a problem of double taxation in circumstances involving the sale of a new residence situated on leased land; ensures that condominium fees and related parking fees for single detached condominium units receive the same exempt treatment as do multiple-unit condominium fees; ensures that the appropriate amount of tax applies to a new residential complex such as an apartment building when the complex is built on leased land.

(11) HST-related Rules: makes several amendments consequential on the introduction of the HST, including additional rules to address the transition from the retail sales taxes in the participating provinces; modifies previously existing GST provisions necessary to reflect the 15% HST rate; refines the simplified method by which financial institutions operating in the participating provinces calculate their net tax remittances.

In the area of the administration and enforcement of the tax system, this enactment contains amendments to the Excise Tax Act, Bankruptcy and Insolvency Act, Canada Pension Plan, Companies' Creditors Arrangement Act, Cultural Property Export and Import Act, Customs Act, Employment Insurance Act (and the former Unemployment Insurance Act), Income Tax Act and the Tax Court of Canada Act. Many of these amendments are intended to update the provisions of the various Acts relative to current administrative practices, harmonize certain of the GST/HST, income tax and customs provisions and ensure the efficiency and effectiveness of the assessment, appeals and collections processes. Specific measures include: permitting the Minister of National Revenue to accept late-filed applications for certain GST/HST rebates that are payable to individuals and are administered under the income tax system; removing the obligation for a supplier to disclose on an invoice the amount of tax payable on certain transactions when it is the recipient who is required to report and remit the tax; clarifying the allowable use by the Canada Customs and Revenue Agency of third-party information; clarifying the Crown's ability to advance alternative arguments in support of an assessment on an appeal; ensuring that certain enforcement provisions dealing with third parties apply equally where the third party happens to be the Crown in right of a province and ensuring that employment insurance premiums and Canada Pension Plan contributions that are required to be remitted by an employer are fully recoverable by the Crown in the case of the bankruptcy of the employer.

Finally, this enactment contains a number of amendments that update cross-references, including references to the Canada Customs and Revenue Agency, correct editorial errors, remove inconsistencies between the French and English versions of the legislation and correct ambiguities or obvious anomalies in existing provisions of the GST/HST legislation and the Excise Act.


The Explanatory Notes relating to this enactment issued by the Minister of Finance provide a detailed explanation of these amendments.