The federal government imposed a carbon tax on Saskatchewan, Manitoba, Ontario, and New Brunswick as April 1, 2019. And come January 1st, 2020, Alberta will also find itself on that list of provinces having to comply with the federal plan. The plan includes a confusing slew of rules on registrations and exemptions. We can help you figure out the maze of rules. If you have business activities in these provinces, you may have to register.
A new registry has been created by the government to monitor the distribution, importation, and use of fuel in provinces subject to this new tax. This registry will also be used to administer tax relief to sectors exempted from this new tax, such as agriculture.
Looking to offset these additional costs?
The federal government has announced that small businesses in Ontario, New Brunswick, Manitoba, and Saskatchewan can now apply for funding for energy-saving projects. Eventually, Alberta businesses will be able to apply for funding at a later date to be announced by the government. Businesses will be eligible to receive up to 25% of the cost of projects that will make their businesses more productive and competitive as they reduce energy use, save money, and cut greenhouse gas pollution. Projects such as building retrofits, improved industrial processes, fuel switching, and the production of renewable energy will qualify for funding. Learn more here.
- You are required to be registered as a road carrier if you use fuel in a listed province unless you are already registered as a distributor, an air carrier, or a marine carrier. You have to register only if you have interprovincial activities (between one listed province and another). You do not need to register if you operate only in one province.
- You also have to register as a distributor of fuel, importer of fuel, user of combustible waste, air carrier or marine carrier. See the complete list here.
Fuel carried in a supply tank of a vehicle across provinces/borders do not count as importing / exporting fuel.
- You might be interested in registering voluntarily if you are a user of fuel as an input (e.g.: if you produce plastics).
- You might also need to register voluntarily if you’re hoping to pass on a fuel tax exemption (e.g.: for farming activities)
How to register
To register, fill out the following form: Register for the fuel charge program
You will also need to fill out a “Fuel Charge Registration Schedule”, indicating your registration type and the type of fuel you use:
Even if you have activities in more than one listed province, only one registration application is needed.
You can submit your fuel charge registration forms electronically using the "Submit documents" function in My business account or by mail to the following address:
Sudbury Tax Centre
Fuel Charge Program
Post Office Box 20000, Station A
Sudbury ON P3A 5C1
Deadline for registration
If your registration is mandatory, for the purpose of the fuel charge, you must apply for registration before:
- April 1, 2019 if your business activities are in Manitoba, New Brunswick, Ontario, or Saskatchewan
- Note: July 1, 2019 if your business activities are in Nunavut, or Yukon
- January 1, 2020 if your business has activities in Alberta
Failure to register in time can result in a $2,000 penalty. If your registration is voluntary, you may register at any time.
Reporting and filing requirements for road carriers
- The reporting period of a registered road carrier is a calendar quarter beginning on the first day of January, April, July and October.
- For example, a person that is only registered as a road carrier must pay the net charge for the quarterly reporting period of April to June by the end of July.
- A registered road carrier must file a return with the CRA, even if there is no amount owing.
- A registered road carrier must file:
- Form B400, Fuel Charge Return – Registrant, once for each reporting period,
- As well as Form B400-12, Fuel Charge Return Schedule – Registered Road Carrier.
Fuel charge exemptions
If you are a farmer, fisher, or greenhouse operator, you may be able to benefit from partial or full relief of the fuel charge at the time of delivery if you provide an exemption certificate to your distributor. This certificate permits the delivery of the fuel without having the fuel charge applied at that time.
You can be eligible for an exemption if you are:
- A farmer and all of the following conditions are met:
- the fuel is delivered directly to your farm
- the fuel is for use exclusively in the operation of eligible farming machinery or of an auxiliary component of eligible farming machinery (this does not include any vehicles licensed for use on public roadways, such as pickup trucks)
- all or substantially all of the fuel is for use in the course of eligible farming activities
- Farm fuel purchased at cardlock locations will also be exempt from the federal carbon tax as of April 1, 2019.
- the CRA listened to your concerns on this issue and now farm fuels purchased at cardlock facilities will also be exempt from the carbon tax
- A fisher and all of the following conditions are met:
- the fuel is for use exclusively in the operation of an eligible fishing vessel
- all or substantially all of the fuel is for use in the course of eligible fishing activities
- A greenhouse operator can obtain a partial exemption (80%) (see details)
How to fill out an exemption certificate
If you are eligible for an exemption, you must fill out one of the following form to obtain a certificate:
- Form L402, Fuel Charge Exemption Certificate for Farmers
- Form L403, Fuel Charge Exemption Certificate for Fishers
- Form L404, Fuel Charge Exemption Certificate for Greenhouse Operators
- Form L405, Fuel Charge Exemption Certificate for Remote Power Plant Operators
- Form L401, Fuel Charge Exemption Certificate (if you are a registered distributor, a registered emitter, a registered user of fuel, a registered specified air carrier, a registered specified marine carrier, or a registered specified rail carrier)
Note: Farmers will have to provide their fuel distributor with the Fuel Charge Exemption Certificate for Farmers (L402 form) to obtain this exemption. If farmers have already completed a declaration form for dyed bulk-delivered fuel, they do not need to complete another form for dyed Cardlock fuel. It is our understanding that one declaration form will apply to both bulk-delivered and Cardlock farm fuel.
In order to obtain an exemption, you must ensure that your distributor has registered (please see section on “How to register")