Excise Act, 2001 (S.C. 2002, c. 22)

Marginal note:Imposition

• 56 (1) A special duty is imposed on a tobacco product that is manufactured in Canada and exported

  • (a) if the export is in accordance with paragraph 50(4)(a) by the tobacco licensee who manufactured it, at the rates set out in section 3 of Schedule 3; or

  • (b) in any other case, at the rates set out in section 4 of Schedule 3.

• Marginal note:When and by whom duty is payable

  (2) Subject to sections 57 and 58, the special duty is payable, at the time the tobacco product is exported, by

  • (a) if paragraph (1)(a) applies, the tobacco licensee who manufactured it; or

  • (b) if paragraph (1)(b) applies, the person who exported it.

Marginal note:Duty relieved — deliveries to a foreign duty free shop and as foreign ships’ stores

57 The special duty imposed under section 56 is relieved on a tobacco product that is exported by the tobacco licensee who manufactured it for delivery to a foreign duty free shop or as foreign ships’ stores.

Marginal note:Duty relieved — prescribed tobacco product

• 58 (1) The special duty imposed under section 56 is relieved on a tobacco product of a particular brand if

  • (a) the tobacco product of that brand is specified by the Minister;

  • (b) during the three-year period before the year in which the tobacco product of that brand is exported, the tobacco product of that brand was not sold in Canada, other than in a duty free shop, except in quantities not significantly greater than the minimum quantities sufficient for the purposes of registering the trademark for that brand; and

  • (c) during any year before the three-year period referred to in paragraph (b), sales in Canada of the product of that brand never exceeded

    • (i) 0.5% of total sales in Canada of similar products, or

    • (ii) if another percentage that is less than 0.5% is prescribed for the purposes of this subsection, that percentage of total sales in Canada of similar products.

• Marginal note:Duty relieved — prescribed cigarettes

  (2) The special duty imposed under section 56 is relieved on cigarettes of a particular type or formulation manufactured in Canada and exported under a brand that is also applied to cigarettes of a different type or formulation that are manufactured and sold in Canada if

  • (a) cigarettes of the particular type or formulation exported under that brand are cigarettes specified by the Minister; and

  • (b) cigarettes of the particular type or formulation have never been sold in Canada under that brand or any other brand.

• Marginal note:Distinguishing different cigarettes

  (3) For the purpose of subsection (2), a cigarette of a particular type or formulation sold under a brand may be considered to be different from another cigarette sold under that brand if it is reasonable to consider them to be different having regard to their physical characteristics before and during consumption.

PART 3.1Cigarette Inventory Tax

Marginal note:Definitions

58.1 The following definitions apply in this Part.

adjustment day

adjustment day means

• (a) March 23, 2017;

• (a.1) February 28, 2018;

• (a.2) April 20, 2021;

• (a.3) April 17, 2024; or

• (b) in the case of an inflationary adjusted year, April 1 of that year. (date d’ajustement)

inflationary adjusted year

inflationary adjusted year has the same meaning as in subsection 43.1(1). (année inflationniste)

loose tobacco

loose tobacco[Repealed, 2014, c. 20, s. 69]

separate retail establishment

separate retail establishment of a person means a shop or store of the person

• (a) that is geographically separate from other places of business of the person;

• (b) at which, in the ordinary course of the person’s business, the person regularly sells, otherwise than through vending machines, tobacco products to consumers, within the meaning of section 123 of the Excise Tax Act, attending at the shop or store; and

• (c) in respect of which separate records are maintained. (établissement de détail distinct)

taxed cigarettes

taxed cigarettes of a person means cigarettes in respect of which duty has been imposed under section 42 or 53 at the rate applicable on the day before an adjustment day, and that, at the beginning of the adjustment day,

• (a) were owned by that person for sale in the ordinary course of a business of the person;

• (b) were not held in a vending machine; and

• (c) were not relieved from that duty under this Act. (cigarettes imposées)

taxed tobacco

taxed tobacco[Repealed, 2014, c. 20, s. 69]

unit

unit[Repealed, 2014, c. 20, s. 69]

Marginal note:Imposition of tax — 2017 increase

• 58.2 (1) Subject to section 58.3, every person shall pay to Her Majesty a tax on all taxed cigarettes of the person held at the beginning of March 23, 2017 at the rate of $0.00265 per cigarette.

• Marginal note:Imposition of tax — 2018 increase

  (1.1) Subject to section 58.3, every person shall pay to Her Majesty a tax on all taxed cigarettes of the person held at the beginning of February 28, 2018 at the rate of $0.011468 per cigarette.

• Marginal note:Imposition of tax — 2021 increase

  (1.2) Subject to section 58.3, every person shall pay to Her Majesty a tax on all taxed cigarettes of the person held at the beginning of April 20, 2021 at the rate of $0.02 per cigarette.

• Marginal note:Imposition of tax — 2024 increase

  (1.3) Subject to section 58.3, every person shall pay to His Majesty a tax on all taxed cigarettes of the person held at the beginning of April 17, 2024 at the rate of $0.02 per cigarette.

• Marginal note:Imposition of tax — inflationary adjusted years

  (2) Subject to section 58.3, every person shall pay to Her Majesty a tax on all taxed cigarettes of the person held at the beginning of April 1 of an inflationary adjusted year at a rate per cigarette equal to

  • (a) in the case of cigarettes in respect of which duty has been imposed under section 42, the amount determined by the formula

    (A – B)/5

    where

    A

    is the rate of duty applicable under section 1 of Schedule 1 for each five cigarettes on April 1 of the inflationary adjusted year, and

    B

    is the rate of duty applicable under section 1 of Schedule 1 for each five cigarettes on March 31 of the inflationary adjusted year; and

  • (b) in the case of cigarettes in respect of which duty has been imposed under section 53, the amount determined by the formula

    C – D

    where

    C

    is the rate of duty applicable under paragraph 1(a) of Schedule 3 per cigarette on April 1 of the inflationary adjusted year, and

    D

    is the rate of duty applicable under paragraph 1(a) of Schedule 3 per cigarette on March 31 of the inflationary adjusted year.

• Marginal note:Rounding

  (3) The amount determined under paragraph (2)(a) or (b) is to be rounded to the nearest one-hundred-thousandth or, if the amount is equidistant from two consecutive one-hundred-thousandths, to the higher one-hundred-thousandth.

Marginal note:Exemption for small retail inventory

58.3 Tax under this Part in respect of the inventory of all taxed cigarettes of a person that is held at the beginning of an adjustment day at a separate retail establishment of the person is not payable if that retail establishment holds inventory of 30,000 or fewer cigarettes.

Marginal note:Taking of inventory

58.4 Every person liable to pay tax under this Part shall, for the purposes of this Part, determine that person’s inventory of all taxed cigarettes held at the beginning of an adjustment day.

Marginal note:Returns

• 58.5 (1) Every person liable to pay tax under this Part shall file a return with the Minister in the prescribed form and manner on or before,

  • (a) in the case of the tax imposed under subsection 58.2(1), May 31, 2017;

  • (a.1) in the case of the tax imposed under subsection 58.2(1.1), April 30, 2018;

  • (a.2) in the case of the tax imposed under subsection 58.2(1.2), June 30, 2021;

  • (a.3) in the case of the tax imposed under subsection 58.2(1.3), June 30, 2024; or

  • (b) in the case of the tax imposed under subsection 58.2(2) in respect of an inflationary adjusted year, May 31 of the inflationary adjusted year.

• Marginal note:Separate returns

  (2) A person authorized under subsection 239(2) of the Excise Tax Act to file separate returns in respect of a separate branch or division may file separate returns under this Part in respect of that branch or division.

Marginal note:Payment

• 58.6 (1) Every person shall pay to the Receiver General the total tax payable by the person under this Part on or before

  • (a) in the case of the tax imposed under subsection 58.2(1), May 31, 2017;

  • (a.1) in the case of the tax imposed under subsection 58.2(1.1), April 30, 2018;

  • (a.2) in the case of the tax imposed under subsection 58.2(1.2), June 30, 2021;

  • (a.3) in the case of the tax imposed under subsection 58.2(1.3), June 30, 2024; or

  • (b) in the case of the tax imposed under subsection 58.2(2) in respect of an inflationary adjusted year, May 31 of the inflationary adjusted year.

• Marginal note:Minimum interest

  (2) No interest in respect of an amount payable by a person under this Part is payable if, at the time the person pays the amount, the total of that interest otherwise payable is less than $25.

• Marginal note:Extension

  (3) The Minister may at any time extend in writing the time for filing a return, or paying the tax payable, under this Part and, where the Minister so extends the time,

  • (a) the return shall be filed or tax payable shall be paid within the time as so extended; and

  • (b) interest is payable under section 170 as if the time had not been extended.

PART 4Alcohol

General

Marginal note:Application — Importation of Intoxicating Liquors Act

59 For greater certainty, the Importation of Intoxicating Liquors Act continues to apply to the importation, sending, taking and transportation of intoxicating liquor into a province.

Marginal note:Importations involving a provincial authority

59.1 If alcohol is imported under circumstances in which subsection 3(1) of the Importation of Intoxicating Liquors Act applies, the alcohol is deemed, for the purposes of this Act and subsection 21.2(3) of the Customs Tariff, to have been imported by the person who would have been the importer in the absence of that subsection 3(1) and not by Her Majesty in right of a province or a liquor authority.

Marginal note:Prohibition — production and packaging of spirits

• 60 (1) No person shall, except in accordance with a spirits licence issued to the person, produce or package spirits.

• Marginal note:Exception

  (2) Subsection (1) does not apply to

  • (a) the packaging of spirits from a marked special container by a purchaser at a bottle-your-own premises; or

  • (b) the production of spirits for the purpose or as a consequence of the analysis of the composition of a substance containing absolute ethyl alcohol.

Marginal note:Prohibition — possession of still

61 No person shall possess a still or other equipment suitable for the production of spirits with the intent of producing spirits unless the person

• (a) is a spirits licensee;

• (b) has a pending application for a spirits licence; or

• (c) possesses the still or equipment solely for the purpose of producing spirits for the purpose or as a consequence of the analysis of the composition of a substance containing absolute ethyl alcohol.