Budget Implementation Act, 2018, No. 1 (S.C. 2018, c. 12)
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Assented to 2018-06-21
PART 3Amendments to the Excise Act, 2001 (Cannabis Taxation), the Excise Tax Act and Other Related Texts (continued)
2002, c. 22Excise Act, 2001 (continued)
74 (1) The portion of subsection 159(1) of the Act before paragraph (a) is replaced by the following:
Marginal note:Determination of fiscal months
159 (1) The fiscal months of a person other than a cannabis licensee shall be determined in accordance with the following rules:
(2) Section 159 of the Act is amended by adding the following after subsection (1):
Marginal note:Fiscal months — cannabis licensee
(1.01) For the purposes of this Act, the fiscal months of a cannabis licensee are calendar months.
75 Section 180 of the Act is replaced by the following:
Marginal note:No refund — exportation
180 Subject to this Act, the duty paid on any tobacco product, cannabis product or alcohol entered into the duty-paid market shall not be refunded on the exportation of the tobacco product, cannabis product or alcohol.
76 The Act is amended by adding the following after section 187:
Marginal note:Refund of duty — destroyed cannabis
187.1 The Minister may refund to a cannabis licensee the duty paid on a cannabis product that is re-worked or destroyed by the cannabis licensee in accordance with section 158.16 if the cannabis licensee applies for the refund within two years after the cannabis product is re-worked or destroyed.
77 (1) Paragraph 206(1)(d) of the Act is replaced by the following:
(d) every person that transports a tobacco product or cannabis product that is not stamped or non-duty-paid packaged alcohol.
(2) Section 206 of the Act is amended by adding the following after subsection (2):
Marginal note:Keeping records — cannabis licensee
(2.01) Every cannabis licensee shall keep records that will enable the determination of the amount of cannabis product produced, received, used, packaged, re-worked, sold or disposed of by the licensee.
78 Paragraph 211(6)(e) of the Act is amended by striking out “or” at the end of subparagraph (viii), by adding “or” at the end of subparagraph (ix) and by adding the following after subparagraph (ix):
(x) to an official solely for the administration or enforcement of the Cannabis Act;
79 (1) The portion of section 214 of the Act before paragraph (a) is replaced by the following:
Marginal note:Unlawful production, sale, etc.
214 Every person that contravenes any of sections 25, 25.2 to 25.4, 27 and 29, subsection 32.1(1) and sections 60, 62, 158.04 to 158.06 and 158.08 is guilty of an offence and liable
(2) The portion of section 214 of the Act before paragraph (a), as enacted by subsection (1), is replaced by the following:
Marginal note:Unlawful production, sale, etc.
214 Every person that contravenes any of sections 25, 25.2 to 25.4, 27 and 29, subsection 32.1(1) and sections 60, 62, 158.02, 158.04 to 158.06, 158.08 and 158.1 is guilty of an offence and liable
80 The Act is amended by adding the following after section 218:
Marginal note:Punishment — sections 158.11 and 158.12
218.1 (1) Every person that contravenes section 158.11 or 158.12 is guilty of an offence and liable
(a) on conviction on indictment, to a fine of not less than the amount determined under subsection (2) and not more than the amount determined under subsection (3) or to imprisonment for a term of not more than five years, or to both; or
(b) on summary conviction, to a fine of not less than the amount determined under subsection (2) and not more than the lesser of $500,000 and the amount determined under subsection (3) or to imprisonment for a term of not more than 18 months, or to both.
Marginal note:Minimum amount
(2) The amount determined under this subsection for an offence under subsection (1) is the greater of
(a) the amount determined by the formula
(A + B + C) × 200%
where
- A
- is the amount determined under section 1 of Schedule 7, as that section read at the time the offence was committed, in respect of the cannabis products to which the offence relates,
- B
- is
(i) if the offence occurred in a specified province, 300% of the amount determined for A, and
(ii) in any other case, 0, and
- C
- is
(i) if the offence occurred in a prescribed specified province, 200% of the amount determined for A, and
(ii) in any other case, 0, and
(b) $1,000 in the case of an indictable offence and $500 in the case of an offence punishable on summary conviction.
Marginal note:Maximum amount
(3) The amount determined under this subsection for an offence under subsection (1) is the greater of
(a) the amount determined by the formula
(A + B + C) × 300%
where
- A
- is the amount determined under section 1 of Schedule 7, as that section read at the time the offence was committed, in respect of the cannabis products to which the offence relates,
- B
- is
(i) if the offence occurred in a specified province, 300% of the amount determined for A, and
(ii) in any other case, 0, and
- C
- is
(i) if the offence occurred in a prescribed specified province, 200% of the amount determined for A, and
(ii) in any other case, 0, and
(b) $2,000 in the case of an indictable offence and $1,000 in the case of an offence punishable on summary conviction.
81 Paragraph 230(1)(a) of the Act is replaced by the following:
(a) the commission of an offence under section 214 or subsection 216(1), 218(1), 218.1(1) or 231(1); or
82 Paragraph 231(1)(a) of the Act is replaced by the following:
(a) the commission of an offence under section 214 or subsection 216(1), 218(1) or 218.1(1); or
83 Subsection 232(1) of the Act is replaced by the following:
Marginal note:Part XII.2 of Criminal Code applicable
232 (1) Sections 462.3 and 462.32 to 462.5 of the Criminal Code apply, with any modifications that the circumstances require, in respect of proceedings for an offence under section 214, subsection 216(1), 218(1) or 218.1(1) or section 230 or 231.
84 The Act is amended by adding the following after section 233:
Marginal note:Contravention of section 158.13
233.1 Every cannabis licensee that contravenes section 158.13 is liable to a penalty equal to the amount determined by the formula
(A + B + C) × 200%
where
- A
- is the greater of
(a) the amount determined under section 1 of Schedule 7, as that section read at the time the contravention occurred, in respect of the cannabis products to which the contravention relates, and
(b) the amount obtained by multiplying the fair market value, at the time the contravention occurred, of the cannabis products to which the contravention relates by the percentage set out in section 4 of Schedule 7, as that section read at that time;
- B
- is
(a) if the offence occurred in a specified province, 300% of the amount determined for A, and
(b) in any other case, 0; and
- C
- is
(a) if the offence occurred in a prescribed specified province, 200% of the amount determined for paragraph (b) of the description of A, and
(b) in any other case, 0.
85 (1) Subsection 234(1) of the Act is replaced by the following:
Marginal note:Contravention of section 38, 40, 49, 61, 62.1, 99, 149, 151 or 158.15
234 (1) Every person that contravenes section 38, 40, 49, 61, 62.1, 99, 149, 151 or 158.15 is liable to a penalty of not more than $25,000.
(2) Section 234 of the Act is amended by adding the following after subsection (2):
Marginal note:Failure to comply
(3) Every person that fails to return or destroy stamps as directed by the Minister under paragraph 158.07(b) is liable to a penalty of not more than $25,000.
(3) Subsection 234(3) of the Act, as enacted by subsection (2), is replaced by the following:
Marginal note:Failure to comply
(3) Every person that fails to return or destroy stamps as directed by the Minister under paragraph 158.07(b), or that fails to re-work or destroy a cannabis product in the manner authorized by the Minister under section 158.16, is liable to a penalty of not more than $25,000.
86 The Act is amended by adding the following after section 234:
Marginal note:Contravention of section 158.02, 158.1, 158.11 or 158.12
234.1 Every person that contravenes section 158.02, that receives for sale cannabis products in contravention of section 158.1 or that sells or offers to sell cannabis products in contravention of section 158.11 or 158.12 is liable to a penalty equal to the amount determined by the formula
(A + B + C) × 200%
where
- A
- is the greater of
(a) the amount determined under section 1 of Schedule 7, as that section read at the time the contravention occurred, in respect of the cannabis products to which the contravention relates, and
(b) the amount obtained by multiplying the fair market value, at the time the contravention occurred, of the cannabis products to which the contravention relates by the percentage set out in section 4 of Schedule 7, as that section read at that time;
- B
- is
(a) if the offence occurred in a specified province, 300% of the amount determined for A, and
(b) in any other case, 0; and
- C
- is
(a) if the offence occurred in a prescribed specified province, 200% of the amount determined for paragraph (b) of the description of A, and
(b) in any other case, 0.
87 (1) Paragraph 238.1(1)(a) of the Act is replaced by the following:
(a) the person can demonstrate that the stamps were affixed to tobacco products, cannabis products or their containers in the manner prescribed for the purposes of the definition stamped in section 2 and that duty, other than special duty, has been paid on the tobacco products or cannabis products; or
(2) Subsection 238.1(2) of the Act is replaced by the following:
Marginal note:Amount of the penalty
(2) The amount of the penalty for each excise stamp that cannot be accounted for is equal to
(a) in the case of a tobacco excise stamp, the duty that would be imposed on a tobacco product for which the stamp was issued under subsection 25.1(1); or
(b) in the case of a cannabis excise stamp, five times the total of the following amounts:
(i) the dollar amount set out in paragraph 1(a) of Schedule 7,
(ii) if the stamp is in respect of a specified province, three times the dollar amount set out in paragraph 1(a) of Schedule 7, and
(iii) if the stamp is in respect of a prescribed specified province, $5.00.
88 (1) The portion of section 239 of the Act before paragraph (a) is replaced by the following:
Marginal note:Other diversions
239 Unless section 237 applies, every person is liable to a penalty equal to 200% of the duty that was imposed on packaged alcohol, a tobacco product or a cannabis product if
(2) Paragraph 239(a) of the French version of the Act is replaced by the following:
a) elle a acquis l’alcool emballé ou le produit et les droits n’étaient pas exigibles en raison du but dans lequel elle les a acquis ou de leur destination;
89 Section 264 of the Act is replaced by the following:
Marginal note:Certain things not to be returned
264 Despite any other provision of this Act, any alcohol, specially denatured alcohol, restricted formulation, raw leaf tobacco, excise stamp, tobacco product or cannabis product that is seized under section 260 must not be returned to the person from whom it was seized or any other person unless it was seized in error.
90 Subsection 266(2) of the Act is amended by striking out “and” at the end of paragraph (c), by adding “and” at the end of paragraph (d) and by adding the following after paragraph (d):
(e) a seized cannabis product only to a cannabis licensee.
91 (1) Subsection 304(1) of the Act is amended by adding the following after paragraph (c):
(c.1) respecting the types of security that are acceptable for the purposes of subsection 158.03(3), and the manner by which the amount of the security is to be determined;
(2) Paragraph 304(1)(f) of the Act is replaced by the following:
(f) respecting the information to be provided on tobacco products, packaged alcohol and cannabis products and on containers of tobacco products, packaged alcohol and cannabis products;
(3) Paragraph 304(1)(n) of the Act is replaced by the following:
(n) respecting the sale under section 266 of alcohol, tobacco products, raw leaf tobacco, specially denatured alcohol, restricted formulations or cannabis products seized under section 260;
92 The Act is amended by adding the following after section 304:
Marginal note:Definition of coordinated cannabis duty system
304.1 (1) In this section, coordinated cannabis duty system means the system providing for the payment, collection and remittance of duty imposed under any of sections 158.2 and 158.22 and subsections 158.25(2) and 158.26(2) and any provisions relating to duty imposed under those provisions or to refunds in respect of any such duty.
Marginal note:Coordinated cannabis duty system regulations — transition
(2) The Governor in Council may make regulations, in relation to the joining of a province to the coordinated cannabis duty system,
(a) prescribing transitional measures, including
(i) a tax on the inventory of cannabis products held by a cannabis licensee or any other person, and
(ii) a duty or tax on cannabis products that are delivered prior to the province joining that system; and
(b) generally to effect the implementation of that system in relation to the province.
Marginal note:Coordinated cannabis duty system regulations — rate variation
(3) The Governor in Council may make regulations
(a) prescribing rules in respect of whether, how and when a change in the rate of duty for a specified province applies (in this section any such change in the rate of duty is referred to as a “rate variation”), including rules deeming, in specified circumstances and for specified purposes, the status of anything to be different than what it would otherwise be, including when duty is imposed or payable and when duty is required to be reported and accounted for;
(b) if a manner of determining an amount of duty is to be prescribed in relation to the coordinated cannabis duty system,
(i) specifying the circumstances or conditions under which a change in the manner applies, and
(ii) prescribing transitional measures in respect of a change in the manner, including
(A) a tax on the inventory of cannabis products held by a cannabis licensee or any other person, and
(B) a duty or tax on cannabis products that are delivered prior to the change; and
(c) prescribing amounts and rates to be used to determine any refund that relates to, or is affected by, the coordinated cannabis duty system, excluding amounts that would otherwise be included in determining any such refund, and specifying circumstances under which any such refund shall not be paid or made.
Marginal note:Coordinated cannabis duty system regulations — general
(4) For the purpose of facilitating the implementation, application, administration and enforcement of the coordinated cannabis duty system or a rate variation or the joining of a province to the coordinated cannabis duty system, the Governor in Council may make regulations
(a) prescribing rules in respect of whether, how and when that system applies and rules in respect of other aspects relating to the application of that system in relation to a specified province, including rules deeming, in specified circumstances and for specified purposes, the status of anything to be different than what it would otherwise be, including when duty is imposed or payable and when duty is required to be reported and accounted for;
(b) prescribing rules related to the movement of cannabis products between provinces, including a duty, tax or refund in respect of such movement;
(c) providing for refunds relating to the application of that system in relation to a specified province;
(d) adapting any provision of this Act or of the regulations made under this Act to the coordinated cannabis duty system or modifying any provision of this Act or those regulations to adapt it to the coordinated cannabis duty system;
(e) defining, for the purposes of this Act or the regulations made under this Act, or any provision of this Act or those regulations, in its application to the coordinated cannabis duty system, words or expressions used in this Act or those regulations including words or expressions defined in a provision of this Act or those regulations;
(f) providing that a provision of this Act or of the regulations made under this Act, or a part of such a provision, does not apply to the coordinated cannabis duty system;
(g) prescribing compliance measures, including penalties and anti-avoidance rules; and
(h) generally in respect of the application of that system in relation to a province.
Marginal note:Conflict
(5) If a regulation made under this Act in respect of the coordinated cannabis duty system states that it applies despite any provision of this Act, in the event of a conflict between the regulation and this Act, the regulation prevails to the extent of the conflict.
Marginal note:Definition of cannabis duty system
304.2 (1) In this section, cannabis duty system means the system providing for the payment, collection and remittance of duty imposed under Part 4.1 and any provisions relating to duty imposed under that Part or to refunds in respect of any such duty.
Marginal note:Transitional cannabis duty system regulations
(2) For the purpose of facilitating the implementation, application, administration or enforcement of the cannabis duty system, the Governor in Council may make regulations adapting any provision of this Act or of the regulations made under this Act to take into account the making of regulations under the Cannabis Act or amendments to those regulations.
Marginal note:Retroactive effect
(3) Despite subsection 304(2), regulations made under subsection (2) may, if they so provide, be retroactive and have effect with respect to any period before they are made.
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