Excise Act, 2001 (S.C. 2002, c. 22)

Marginal note:Recovery by deduction or set-off

290 If a person is indebted to Her Majesty under this Act, the Minister may require the retention by way of deduction or set-off of any amount that the Minister may specify out of any amount that may be or become payable to that person by Her Majesty.

Marginal note:Acquisition of debtor’s property

291 For the purpose of collecting debts owed by a person to Her Majesty under this Act, the Minister may purchase or otherwise acquire any interest in the person’s property that the Minister is given a right to acquire in legal proceedings or under a court order or that is offered for sale or redemption, and may dispose of any interest so acquired in any manner that the Minister considers reasonable.

Marginal note:Money seized from debtor

• 292 (1) If the Minister has knowledge or suspects that a person is holding money that was seized by a police officer in the course of administering or enforcing the criminal law of Canada from another person who is liable to pay any duty, interest or other amount under this Act (in this section referred to as the “debtor”) and that is restorable to the debtor, the Minister may in writing require the person to turn over the money otherwise restorable to the debtor, in whole or in part, to the Receiver General on account of the debtor’s liability under this Act.

• Marginal note:Receipt of Minister

  (2) A receipt issued by the Minister for money turned over is a good and sufficient discharge of the requirement to restore the money to the debtor to the extent of the amount so turned over.

Marginal note:Seizure — failure to pay duty, etc.

• 293 (1) If a person fails to pay duty, interest or other amount as required under this Act, the Minister may in writing give 30 days notice to the person, addressed to their last known address, of the Minister’s intention to direct that the person’s things be seized and disposed of. If the person fails to make the payment before the expiry of the 30 days, the Minister may issue a certificate of the failure and direct that the person’s things be seized.

• Marginal note:Disposition

  (2) Things that have been seized under subsection (1) shall be kept for 10 days at the expense and risk of the owner. If the owner does not pay the amount due together with all expenses within the 10 days, the Minister may dispose of the things in a manner the Minister considers appropriate in the circumstances.

• Marginal note:Proceeds of disposition

  (3) Any surplus resulting from a disposition, after deduction of the amount owing and all expenses, shall be paid or returned to the owner of the things seized.

• Marginal note:Exemptions from seizure

  (4) Anything of any person in default that would be exempt from seizure under a writ of execution issued by a superior court of the province in which the seizure is made is exempt from seizure under this section.

Marginal note:Person leaving Canada or defaulting

• 294 (1) If the Minister suspects that a person has left or is about to leave Canada, the Minister may, before the day otherwise fixed for payment, by notice to the person served personally or sent by registered or certified mail addressed to their last known address, demand payment of any amount for which the person is liable under this Act or would be so liable if the time for payment had arrived, and the amount shall be paid without delay despite any other provision of this Act.

• Marginal note:Seizure

  (2) If a person fails to pay an amount required under subsection (1), the Minister may direct that things of the person be seized, and subsections 293(2) to (4) apply, with any modifications that the circumstances require.

Marginal note:Liability of directors

• 295 (1) If a corporation fails to pay any duty or interest as and when required under this Act, the directors of the corporation at the time it was required to pay the duty or interest are jointly and severally or solidarily liable, together with the corporation, to pay the duty or interest and any interest that is payable on the duty or interest under this Act.

• Marginal note:Limitations

  (2) A director of a corporation is not liable unless

  • (a) a certificate for the amount of the corporation’s liability has been registered in the Federal Court under section 288 and execution for that amount has been returned unsatisfied in whole or in part;

  • (b) the corporation has commenced liquidation or dissolution proceedings or has been dissolved and a claim for the amount of the corporation’s liability has been proved within six months after the earlier of the date of commencement of the proceedings and the date of dissolution; or

  • (c) the corporation has made an assignment or a bankruptcy order has been made against it under the Bankruptcy and Insolvency Act and a claim for the amount of the corporation’s liability has been proved within six months after the date of the assignment or bankruptcy order.

• Marginal note:Diligence

  (3) A director of a corporation is not liable for a failure under subsection (1) if the director exercised the degree of care, diligence and skill to prevent the failure that a reasonably prudent person would have exercised in comparable circumstances.

• Marginal note:Assessment

  (4) The Minister may assess any person for any amount of duty or interest payable by the person under this section and, if the Minister sends a notice of assessment, sections 188 to 205 apply with any modifications that the circumstances require.

• Marginal note:Time limit

  (5) An assessment of any amount payable by a person who is a director of a corporation shall not be made more than two years after the person ceased to be a director of the corporation.

• Marginal note:Amount recoverable

  (6) If execution referred to in paragraph (2)(a) has issued, the amount recoverable from a director is the amount remaining unsatisfied after execution.

• Marginal note:Preference

  (7) If a director of a corporation pays an amount in respect of the corporation’s liability that is proved in liquidation, dissolution or bankruptcy proceedings, the director is entitled to any preference to which Her Majesty would have been entitled had the amount not been so paid, and if a certificate that relates to the amount has been registered, the director is entitled to an assignment of the certificate to the extent of the director’s payment, which assignment the Minister is empowered to make.

• Marginal note:Contribution

  (8) A director who satisfies a claim under this section is entitled to contribution from the other directors who were liable for the claim.

Marginal note:Compliance by unincorporated bodies

• 296 (1) If any duty, interest or other amount is required to be paid or any other thing is required to be done under this Act by a person (in this section referred to as the “body”) that is not an individual, a corporation or a partnership, it shall be the joint and several or solidary liability and responsibility of

  • (a) every member of the body holding office as president, chairperson, treasurer, secretary or similar officer of the body,

  • (b) if there are no such officers of the body, every member of any committee having management of the affairs of the body, and

  • (c) if there are no such officers of the body and no such committee, every member of the body,

  to pay that amount of duty, interest or other amount or to comply with the requirement, and if the amount is paid or the requirement is fulfilled by an officer of the body, a member of such a committee or a member of the body, it shall be considered as compliance with the requirement.

• Marginal note:Assessment

  (2) The Minister may assess any person for any amount for which the person is liable under this section and, if the Minister sends a notice of assessment, sections 188 to 205 apply with any modifications that the circumstances require.

• Marginal note:Limitation

  (3) An assessment of a person shall not

  • (a) include any amount that the body was liable to pay before the person became jointly and severally or solidarily liable;

  • (b) include any amount that the body became liable to pay after the person ceased to be jointly and severally or solidarily liable; or

  • (c) be made more than two years after the person ceased to be jointly and severally or solidarily liable unless the person was grossly negligent in the carrying out of any duty or obligation imposed on the body by or under this Act or made, or participated in, assented to or acquiesced in the making of, a false statement or omission in a return, application, form, certificate, statement, invoice or answer made by the body.

Marginal note:Definitions

• 297 (0.1) The following definitions apply in this section.

  common-law partner

  common-law partner of an individual at any time means a person who is the common-law partner of the individual at that time for the purposes of the Income Tax Act. (conjoint de fait)

  common-law partnership

  common-law partnership means the relationship between two persons who are common-law partners of each other. (union de fait)

  transaction

  transaction includes an arrangement or event. (opération)

• Marginal note:Liability re transfers not at arm’s length

  (1) If at any time a person transfers property, either directly or indirectly, by a trust or any other means, to

  • (a) their spouse or common-law partner or an individual who has since become their spouse or common-law partner,

  • (b) an individual who was under 18 years of age, or

  • (c) another person with whom the transferor was not dealing at arm’s length,

  the transferee and transferor are jointly and severally or solidarily liable to pay an amount equal to the lesser of

  • (d) the amount determined by the formula

    A - B

    where

    A

    is the amount, if any, by which the fair market value of the property at that time exceeds the fair market value at that time of the consideration given by the transferee for the transfer of the property, and

    B

    is the amount, if any, by which the total of all amounts, if any, the transferee was assessed under subsection 325(2) of the Excise Tax Act or subsection 160(2) of the Income Tax Act in respect of the property exceeds the amount paid by the transferor in respect of the amounts so assessed, and

  • (e) the total of all amounts each of which is

    • (i) an amount that the transferor is liable to pay under this Act in respect of the reporting period in which the property was transferred or any preceding reporting period, or

    • (ii) interest for which the transferor is liable as of that time.

  However, nothing in this subsection limits the liability of the transferor under any other provision of this Act.

• Marginal note:Fair market value of undivided interest

  (2) For the purposes of this section, the fair market value at any time of an undivided interest in a property, expressed as a proportionate interest in the property, is, subject to subsection (5), deemed to be equal to the same proportion of the fair market value of the property at that time.

• Marginal note:Assessment

  (3) The Minister may at any time assess a transferee in respect of any amount payable by reason of this section, and, if the Minister sends a notice of assessment, sections 188 to 205 apply with any modifications that the circumstances require.

• Marginal note:Rules applicable

  (4) If a transferor and transferee have, by reason of subsection (1), become jointly and severally or solidarily liable in respect of all or part of the liability of the transferor under this Act, the following rules apply:

  • (a) a payment by the transferee on account of the transferee’s liability shall, to the extent of the payment, discharge the joint liability; and

  • (b) a payment by the transferor on account of the transferor’s liability only discharges the transferee’s liability to the extent that the payment operates to reduce the transferor’s liability to an amount less than the amount in respect of which the transferee was, under subsection (1), made jointly and severally or solidarily liable.

• Marginal note:Special transfers to spouse or common-law partner

  (5) Despite subsection (1), if at any time an individual transfers property to their spouse or common-law partner under a decree, order or judgment of a competent tribunal or under a written separation agreement and, at that time, the individual and their spouse or common-law partner were separated and living apart as a result of a breakdown of their marriage or common-law partnership, for the purposes of paragraph (1)(d), the fair market value at that time of the property so transferred is deemed to be nil. However, nothing in this subsection limits the liability of the individual under any other provision of this Act.

• Marginal note:Anti-avoidance rules

  (6) For the purposes of this section, if a person transfers property to another person as part of a transaction or series of transactions, the following rules apply:

  • (a) the transferor is deemed to not be dealing at arm’s length with the transferee at the time of the transfer of the property if

    • (i) the transferor and the transferee do not deal at arm’s length at any time during the period beginning immediately prior to the transaction or series of transactions and ending immediately after the transaction or series of transactions, and

    • (ii) it is reasonable to conclude that one of the purposes of undertaking or arranging the transaction or series of transactions is to avoid joint and several, or solidary, liability of the transferee and the transferor under this section for an amount payable under this Act;

  • (b) an amount that the transferor is liable to pay under this Act (including, for greater certainty, an amount that the transferor is liable to pay under this section, regardless of whether the Minister has made an assessment under subsection (3) in respect of that amount) is deemed to have become payable in the reporting period of the transferor in which the property was transferred, if it is reasonable to conclude that one of the purposes of the transfer of the property is to avoid the payment of a future amount payable under this Act by the transferor or transferee; and

  • (c) the amount determined for A in paragraph (1)(d) is deemed to be the greater of

    • (i) the amount otherwise determined for A in paragraph (1)(d) without reference to this paragraph, and

    • (ii) the amount determined by the formula

      A − B

      where

      A

      is the fair market value of the property at the time of the transfer, and

      B

      is the fair market value, at its lowest at any time during the period beginning immediately prior to the transaction or series of transactions and ending immediately after the transaction or series of transactions, of the consideration given by the transferee for the transfer of the property (other than any part of the consideration that is in a form that is cancelled or extinguished during that period and for which no property that is neither cancelled nor extinguished during that period is substituted) provided that the consideration is held by the transferor at that time.

Evidence and Procedure

Marginal note:Venue

298 A prosecution for an offence under this Act may be instituted, heard and determined in the place where the offence was committed or the subject-matter of the prosecution arose, where the accused was apprehended or where the accused happens to be, or is carrying on business.