Excise Act, 2001 (S.C. 2002, c. 22)

Marginal note:Exception — provincial ownership

115 If, at any time, the government of a province or a liquor authority that is a wine licensee or a licensed user owns bulk wine for a purpose not related to its licence, section 113 applies as though that ownership by the government or the liquor authority did not exist at that time.

Marginal note:Wine imported by licensed user

116 A licensed user who imports bulk wine is responsible for it.

Marginal note:Blended wine — joint and several or solidary responsibility

• 117 (1) If bulk wine is blended with other bulk wine, or if bulk wine is blended with bulk spirits and the resulting product is wine, every person who is a person responsible for any of the wine or who is a licensed user responsible for any of the bulk spirits is jointly and severally or solidarily responsible for the resulting blended wine.

• Marginal note:Responsibility for spirits ceases

  (2) The spirits licensee or licensed user who was responsible for the bulk spirits before they were blended with bulk wine as described in subsection (1) ceases to be responsible for the spirits as of the time of blending.

Marginal note:Responsibility for wine ceases

117.1 If bulk spirits are produced from bulk wine, the wine licensee or licensed user who was responsible for the wine before it was used to produce the spirits ceases to be responsible for the wine at the time the spirits are produced.

Marginal note:Person not responsible

118 A person who is responsible for bulk wine ceases to be responsible for it if it is

• (a) taken for use and the duty on it is paid;

• (b) taken for use in an approved formulation;

• (c) taken for use for a purpose described in section 145 or subsection 146(1);

• (d) exported in accordance with this Act; or

• (e) lost, if the loss is recorded in a manner authorized by the Minister.

Marginal note:Notification of change of ownership

119 If a wine licensee or licensed user (in this section referred to as the “purchaser”) purchases bulk wine from a person who is not a wine licensee or licensed user, the purchaser shall, except in respect of bulk wine that is to be imported,

• (a) at the time of the purchase, obtain from the vendor the name and address of the wine licensee who is responsible for the wine immediately before it is sold to the purchaser; and

• (b) without delay, notify in writing that licensee of the purchase.

Marginal note:Removal of special container

120 If an unmarked special container of wine is removed by a wine licensee from their excise warehouse in accordance with section 156, the licensee is responsible for the wine unless the wine is owned by another wine licensee or a licensed user, in which case the other wine licensee or the licensed user is responsible for it.

Marginal note:Removal of wine

121 If wine is removed by a wine licensee from their excise warehouse in accordance with section 157, the licensee is responsible for the wine unless it is owned by another wine licensee or a licensed user, in which case the other wine licensee or the licensed user is responsible for it.

Imposition and Payment of Duty on Alcohol

Marginal note:Imposition — domestic spirits

• 122 (1) Duty is imposed on spirits produced in Canada at the rate set out in section 1 of Schedule 4.

• Marginal note:Time of imposition

  (2) The duty is imposed at the time the spirits are produced.

Marginal note:Imposition — low alcoholic strength spirits

123 If spirits do not contain more than 7% of absolute ethyl alcohol by volume at the time that they are packaged,

• (a) the duty imposed on the spirits under section 122 or levied under section 21.1 of the Customs Tariff is relieved; and

• (b) duty is imposed on the spirits at the rate set out in section 2 of Schedule 4.

Marginal note:Definitions

• 123.1 (1) The following definitions apply in this section.

  inflationary adjusted year

  inflationary adjusted year means 2018 and every year after that year. (année inflationniste)

  reference year

  reference year means a 12-month period that begins on April 1 of a year and ends on March 31 of the following year. (année de référence)

• Marginal note:Annual adjustments

  (2) Each rate of duty set out in Schedule 4 applicable in respect of a litre of absolute ethyl alcohol or in respect of a litre of spirits is to be adjusted on April 1 of an inflationary adjusted year so that the rate is equal to the greater of

  • (a) the rate determined by the formula

    A × B

    where

    A

    is the rate of duty applicable to the litre of absolute ethyl alcohol or the litre of spirits, as the case may be, on March 31 of the inflationary adjusted year, and

    B

    is the amount, rounded to the nearest one-thousandth, or, if the amount is equidistant from two consecutive one-thousandths, rounded to the higher one-thousandth, determined by the formula

    C/D

    where

    C

    is the Consumer Price Index for the 12-month period ending on September 30 of the particular year preceding the inflationary adjusted year, and

    D

    is the Consumer Price Index for the 12-month period ending on September 30 of the year preceding the particular year, and

  • (b) the rate of duty referred to in the description of A in paragraph (a).

• Marginal note:Adjustment — 2023

  (2.1) In respect of the inflationary adjusted year that is 2023, the description of B in paragraph (2)(a) is deemed to be equal to 1.02.

• Marginal note:Adjustment — 2024

  (2.2) In respect of the inflationary adjusted year that is 2024, the description of B in paragraph (2)(a) is deemed to be equal to 1.02.

• Marginal note:Adjustment — 2025

  (2.3) In respect of the inflationary adjusted year that is 2025, if the amount determined for B in paragraph (2)(a) without reference to this subsection is greater than 1.02, the description of B in that paragraph is deemed to be equal to 1.02.

• Marginal note:Rounding

  (3) The adjusted rate determined under subsection (2) is to be rounded to the nearest one-thousandth or, if the adjusted rate is equidistant from two consecutive one-thousandths, to the higher one-thousandth.

• Marginal note:Consumer Price Index

  (4) In this section, the Consumer Price Index for any 12-month period is the result arrived at by

  • (a) aggregating the Consumer Price Index for Canada, as published by Statistics Canada under the authority of the Statistics Act, for each month in that period;

  • (b) dividing the aggregate obtained under paragraph (a) by 12; and

  • (c) rounding the result obtained under paragraph (b) to the nearest one-thousandth or, if the result obtained is equidistant from two consecutive one-thousandths, to the higher one-thousandth.

• Marginal note:Application of adjusted rate

  (5) If duties on spirits are imposed in a reference year but become payable in another reference year that begins in an inflationary adjusted year, those duties are determined at the rate of duty as adjusted under subsection (2) on the first day of the other reference year.

Marginal note:Duty payable when packaged

• 124 (1) Subject to sections 126 and 127, the duty imposed on spirits is payable at the time the spirits are packaged unless, immediately after packaging, they are entered into an excise warehouse.

• Marginal note:Payable by responsible person

  (2) Duty is payable by the person who is responsible for the spirits immediately before they are packaged.

• Marginal note:Spirits licensee ceases to be liable for duty

  (3) If an excise warehouse licensee becomes liable under section 140 for duty on the spirits, the person required under subsection (2) to pay the duty ceases to be liable to pay it.

Marginal note:Duty payable when removed from warehouse

125 If packaged spirits are removed from an excise warehouse for entry into the duty-paid market, duty is payable on the spirits at the time of their removal and is payable by the excise warehouse licensee of the warehouse.

Marginal note:Duty payable on bulk spirits taken for use

126 Subject to sections 144 to 146, if bulk spirits are taken for use, duty is payable at the time the spirits are taken for use by the person who is responsible for the spirits at that time.

Marginal note:Duty payable on unaccounted bulk spirits

• 127 (1) Duty is payable by the person who is responsible for bulk spirits on any portion of the spirits that cannot be accounted for by the person as being in the possession of a spirits licensee, a licensed user or an alcohol registrant.

• Marginal note:When duty payable

  (2) The duty is payable at the time the spirits cannot be accounted for.

• Marginal note:Exception

  (3) Subsection (1) does not apply in circumstances where the person is convicted of an offence under section 218 or is liable to pay a penalty under section 241.

Marginal note:Duty payable on packaged spirits taken for use

128 Subject to sections 144 to 146, if non-duty-paid packaged spirits that are in the possession of an excise warehouse licensee or a licensed user are taken for use, duty is payable at the time the spirits are taken for use and is payable by the licensee or user.

Marginal note:Duty payable on unaccounted packaged spirits

• 129 (1) Duty is payable on non-duty-paid packaged spirits that have been received by an excise warehouse licensee or a licensed user but cannot be accounted for by the licensee or user

  • (a) as being in the excise warehouse of the licensee or the specified premises of the user;

  • (b) as having been removed, used or destroyed in accordance with this Act; or

  • (c) as having been lost in prescribed circumstances, if the licensee or user fulfills any prescribed conditions.

• Marginal note:When duty payable

  (2) Duty is payable by the licensee or user at the time the spirits cannot be accounted for.

Marginal note:Fortifying wine

• 130 (1) A licensed user who is also a wine licensee may use bulk spirits to fortify wine to an alcoholic strength not in excess of 22.9% absolute ethyl alcohol by volume.

• Marginal note:Duty relieved on spirits

  (2) The duty imposed under section 122 or levied under section 21.1 of the Customs Tariff on the spirits that were used to fortify the wine is relieved.

Marginal note:Blending wine with spirits

131 A licensed user who is also a spirits licensee may blend bulk wine with spirits if the resulting product is spirits.

Marginal note:Producing spirits from wine

131.1 A licensed user who is also a spirits licensee may use bulk wine to produce spirits.

Marginal note:Deemed production of spirits — blending wine

• 131.2 (1) If wine is blended with bulk spirits and the resulting product is spirits,

  • (a) the duty imposed under section 122 or levied under section 21.1 of the Customs Tariff on the spirits that were blended with the wine is relieved; and

  • (b) the resulting spirits are deemed to be produced at the time of the blending.

• Marginal note:Deemed production of spirits — other blending

  (2) If a material or substance, other than spirits or wine, containing absolute ethyl alcohol is blended with bulk spirits or wine and the resulting product is spirits,

  • (a) the duty imposed under section 122 or levied under section 21.1 of the Customs Tariff on the spirits that were blended with the material or substance is relieved; and

  • (b) the resulting spirits are deemed to be produced at the time of the blending.

Marginal note:Duty relieved — DA and SDA

132 If a spirits licensee denatures bulk spirits into denatured alcohol or specially denatured alcohol, the duty imposed on the spirits under section 122 or levied under section 21.1 of the Customs Tariff is relieved.

Marginal note:Imposition of special duty

• 133 (1) In addition to the duty levied under section 21.1 or 21.2 of the Customs Tariff, a special duty is imposed on imported spirits delivered to or imported by a licensed user at the rate set out in Schedule 5.

• Marginal note:Bulk spirits

  (2) If a spirits licensee imports bulk spirits that are delivered to a licensed user, the special duty is payable at the time the spirits are delivered to the licensed user and is payable

  • (a) by the spirits licensee who is responsible for the spirits at that time;

  • (b) if the licensed user is responsible for the spirits at that time and there was a spirits licensee who was responsible immediately before that time, by that spirits licensee; or

  • (c) if the licensed user is responsible for the spirits at that time and there was not a spirits licensee who was responsible immediately before that time, by the spirits licensee who delivered the spirits.

• Marginal note:Packaged spirits

  (3) If imported packaged spirits or imported spirits that have been packaged in Canada are removed from an excise warehouse for delivery to a licensed user, the special duty is payable by the excise warehouse licensee at the time the spirits are removed from the excise warehouse.

• Marginal note:Spirits imported by licensed user

  (4) If bulk or packaged spirits are imported by a licensed user, the special duty

  • (a) is payable by the licensed user at the time the spirits are imported; and

  • (b) shall be paid and collected under the Customs Act, and interest and penalties shall be imposed, calculated, paid and collected under that Act, as if the duty were a duty levied on the spirits under section 20 of the Customs Tariff, and, for those purposes, the Customs Act applies with any modifications that the circumstances require.