Bill C-26

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	1st Session, 37th Parliament, 49-50 Elizabeth II, 2001
	House of Commons of Canada
	BILL C-26
	An Act to amend the Customs Act, the Customs Tariff, the Excise Act, the Excise Tax Act and the Income Tax Act in respect of tobacco
	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 Tobacco Tax Amendments Act, 2001.
R.S., c. 1 (2nd Supp.)	CUSTOMS ACT
1993, c. 25, s. 70(1)	*2. (1) Paragraph 24(1)(c) of the Customs Act* is replaced by the following:**
	(c) as a duty free shop for the sale of goods free of certain duties or taxes levied on goods under the Customs Tariff, the Excise Tax Act, the Excise Act, the Special Import Measures Act or any other law relating to customs, to persons who are about to leave Canada
	(2) Subsection (1) is deemed to have come into force on April 6, 2001.
1997, c. 36	CUSTOMS TARIFF
	*3. (1) Subsection 21(2) of the Customs Tariff* is replaced by the following:**
Duty on tobacco imported by traveller	(2) There shall be levied on traveller's tobacco, at the time of its importation, and paid in accordance with the Customs Act, a duty of
	(a) $0.05 per cigarette, in the case of cigarettes;
	(b) $0.035 per stick, in the case of tobacco sticks; and
	(c) $0.03 per gram, in the case of manufactured tobacco other than cigarettes and tobacco sticks.
Exception - excise duty-paid manufactured tobacco	(3) A duty shall not be levied under this section on manufactured tobacco imported by an individual for their personal use if it is stamped in accordance with the Excise Act and duty has been imposed on it under section 200 of that Act.
Definitions	(4) The definitions in this subsection apply in this section.
``goods subject to excise'' « marchandis es assujetties à l'accise »	``goods subject to excise'' means
	(a) beer or malt liquor, within the meaning of the Excise Act, of heading No. 22.03 or of tariff item No. 2202.90.10 or 2206.00.80 ;
	(b) spirits, within the meaning of the Excise Act, of an alcoholic strength by volume exceeding 22.9% volume, of tariff item No. 2204.21.32, 2204.29.32, 2205.10.30, 2205.90.30, 2206.00.22, 2206.00.72 or 2206.00.92;
	(c) spirits, within the meaning of the Excise Act, of heading No. 22.07 or 22.08, other than of tariff item No. 2207.20.11, 2207.20.90, 2208.90.30 or 2208.90.91;
	(d) cigars or manufactured tobacco of tariff item No. 2402.10.00, 2402.20.00, 2403.10.00, 2403.91.90, 2403.99.10 or 2403.99.90; or
	(e) goods referred to in any of paragraphs (a) to (d) that are classified with the container in which they are imported.
``traveller's tobacco'' « tabac du voyageur »	``traveller's tobacco'' means manufactured tobacco that is imported by a person at any time and
	(a) is classified under tariff item No. 9804.10.00, 9804.20.00, 9805.00.00 or 9807.00.00; or
	(b) would be classified under tariff item No. 9804.10.00 or 9804.20.00 but for the fact that the total value for duty as determined under section 46 of the Customs Act of all goods imported by the person at that time exceeds the maximum value specified in that tariff item.
	(2) Subsection (1) is deemed to have come into force on April 6, 2001, except that subsection 21(2) of the Act, as enacted by subsection (1), does not apply to tobacco imported before October 1, 2001.
	4. (1) Paragraph 83(a) of the Act is replaced by the following:
	(a) in the case of goods that would have been classified under tariff item No. 9804.10.00 or 9804.20.00, the value for duty of the goods shall be reduced by an amount equal to that maximum specified value and, in the case of alcoholic beverages and tobacco, the quantity of those goods shall, for the purposes of assessing duties other than a duty under subsection 21(2) , be reduced by the quantity of alcoholic beverages and tobacco up to the maximum quantities specified in tariff item No. 9804.10.00 or 9804.20.00, as the case may be;
	(2) Subsection (1) comes into force or is deemed to have come into force on October 1, 2001.
	5. (1) Section 92 of the Act is amended by adding the following after subsection (2):
Non-applica- tion to Canadian manufactured tobacco	(3) This section does not apply to any tax imposed under Part III of the Excise Tax Act, or any duty imposed under the Excise Act, in respect of manufactured tobacco that is manufactured or produced in Canada.
	(2) Subsection (1) is deemed to have come into force on April 6, 2001, except that subsection 92(3) of the Act, as enacted by subsection (1), does not apply to manufactured tobacco entered into a bonding warehouse before that day.
	6. (1) Note 4 to Chapter 98 of the List of Tariff Provisions set out in the schedule to the Act is replaced by the following:
	4. For the purpose of this Chapter, ``duties'' means duties or taxes levied or imposed on imported goods under Part 2 of the Act (other than subsection 21(2)) , the Excise Act, the Excise Tax Act, the Special Import Measures Act or any other Act of Parliament relating to customs.
	(2) Subsection (1) comes into force or is deemed to have come into force on October 1, 2001.
R.S., c. E-14	EXCISE ACT
1993, c. 25, s. 32(1); 1999, c. 17, par. 144(1)(c) (E)	*7. (1) The portion of the definition ``cigar stamp'' in section 6 of the Excise Act* before paragraph (a) is replaced by the following:**
``cigar stamp'' « estampille de cigares »	``cigar stamp'' means any stamp required by this Act and the ministerial regulations to be affixed to a cigar, or a package, carton, box, crate or other container containing cigars, entered for consumption or imported into Canada, to indicate
1994, c. 37, s. 2; 1999, c. 17, par. 144(1)(c) (E)	(2) The portion of the definition ``tobacco stamp'' in section 6 of the Act before paragraph (a) is replaced by the following:
``tobacco stamp'' « estampille de tabac »	``tobacco stamp'' means any stamp required by this Act and the ministerial regulations to be impressed on, printed on, marked on, indented into or affixed to a cigarette, or a package, carton, box, crate or other container containing manufactured tobacco, entered for consumption or imported into Canada, or to be affixed to Canadian raw leaf tobacco entered for consumption, to indicate
	(3) Section 6 of the Act is amended by adding the following in alphabetical order:
``foreign duty free shop'' « boutique hors taxes à l'étranger »	``foreign duty free shop'' has the meaning assigned by subsection 2(1) of the Excise Tax Act;
``foreign ships' stores'' « provisions de bord à l'étranger »	``foreign ships' stores'' has the meaning assigned by subsection 2(1) of the Excise Tax Act;
	(4) Subsection (3) is deemed to have come into force on April 6, 2001.
	8. (1) The Act is amended by adding the following after section 52:
Limitation on entry of tobacco into bonding warehouse	52.1 Manufactured tobacco shall not be entered into a bonding warehouse if it is intended to be removed for
	(a) delivery to a duty free shop licensed as such under the Customs Act;
	(b) export for delivery to a foreign duty free shop;
	(c) export for delivery as foreign ships' stores;
	(d) entry into a bonded warehouse, licensed as such under the Customs Tariff; or
	(e) delivery as ships' stores in accordance with the regulations made under the Customs Tariff and the Excise Tax Act.
	(2) Subsection (1) is deemed to have come into force on April 6, 2001.
R.S., c. 7 (2nd Supp.), s. 63(1); 1993, c. 25, s. 37; 1995, c. 41, s. 109; 1999, c. 17, par. 144(1)(n) (E)	9. (1) Section 58 of the Act is replaced by the following:
Transfer of goods other than cigars and manufactured tobacco in bond	58. (1) Goods, other than cigars and manufactured tobacco , warehoused under this Act may, without payment of duty, be transferred or removed from one bonding warehouse to another in bond, exported in bond or released from bond to accredited representatives for their personal or official use, if the transfer, removal, exportation or release is in accordance with the regulations and the ministerial regulations.
Removal to customs bonded warehouse or duty free shop	(2) Goods subject to excise, other than cigars and manufactured tobacco, may, without payment of duty, be removed from a bonding warehouse
	(a) to a bonded warehouse, licensed as such under the Customs Tariff, if the goods are
	(i) designated for delivery as ships' stores,
	(ii) for sale to accredited representatives for their personal or official use , or
	(iii) for export; or
	(b) to a duty free shop, licensed as such under the Customs Act, if the goods are for sale to persons who are about to leave Canada.
Delivery and sale to be in accordance with regulations	(3) Goods removed under subsection (2) shall be delivered and sold in accordance with any ministerial regulations that apply.
Definitions	58.1 (1) The definitions in this subsection apply in this section.
``foreign brand tobacco'' « tabac de marque étrangère »	``foreign brand tobacco'' means tobacco in respect of which the excise tax imposed under section 23.13 of the Excise Tax Act is not payable because of section 23.3 of that Act.
``manufacture d tobacco'' « tabac fabriqué »	``manufactured tobacco'' does not include partially manufactured tobacco or foreign brand tobacco.
``partially manufactured tobacco'' « tabac partiellement fabriqué »	``partially manufactured tobacco'' means a tobacco product made by a tobacco manufacturer that is cut filler or cut rag or that is manufactured less fully than cut filler or cut rag.
Categories of manufactured tobacco	(2) For the purposes of subsection (4), each of the following constitutes a category of manufactured tobacco:
	(a) cigarettes;
	(b) tobacco sticks; and
	(c) manufactured tobacco other than cigarettes and tobacco sticks.
Removal of manufactured tobacco in bond	(3) Manufactured tobacco may, without payment of duty, be removed from a bonding warehouse only if
	(a) it is
	(i) removed by its manufacturer and exported in bond in accordance with subsection (4) and not for delivery to a foreign duty free shop or as foreign ships' stores,
	(ii) removed by its manufacturer and entered into another bonding warehouse in bond, or
	(iii) released to accredited representatives for their personal or official use; and
	(b) the removal and exportation, entry or release, as the case may be, are in accordance with the regulations and the ministerial regulations.
Maximum quantity permitted to be exported in bond	(4) A tobacco manufacturer shall not remove a particular quantity of a category of manufactured tobacco from the manufacturer's bonding warehouse for export in bond at any time in a calendar year if the total quantity of that category of manufactured tobacco exported by the manufacturer in the year up to and including that time, plus the particular quantity, exceeds 1.5% of the total quantity of manufactured tobacco of that category manufactured by the manufacturer in the preceding calendar year.
Quantities to be excluded for the purpose of subsection (4)	(5) The total quantities referred to in subsection (4) shall not include any quantity of manufactured tobacco that was exported by the manufacturer for delivery to a foreign duty free shop or as foreign ships' stores.
Removal of cigars in bond	(6) Cigars may, without payment of duty, be removed from a bonding warehouse only if
	(a) they are
	(i) removed by their manufacturer and
	(A) exported in bond,
	(B) entered into another bonding warehouse in bond,
	(C) entered into a bonded warehouse, licensed as such under the Customs Tariff, if the person entering the cigars into the bonded warehouse certifies to the manufacturer that they are for delivery as ships' stores in accordance with the regulations made under the Customs Tariff and the Excise Tax Act,
	(D) transferred to a duty free shop, licensed as such under the Customs Act, if the operator of the duty free shop certifies to the manufacturer that the cigars are for sale to persons who are about to leave Canada, or
	(E) delivered as ships' stores in accordance with the regulations made under the Customs Tariff and the Excise Tax Act, or
	(ii) released to accredited representatives for their personal or official use; and
	(b) the removal and export, entry, transfer, sale, delivery or release, as the case may be, are in accordance with the regulations and the ministerial regulations.

Bill C-26

BILL C-26

SHORT TITLE

CUSTOMS ACT

CUSTOMS TARIFF

EXCISE ACT