Vol. 145, No. 4 — February 16, 2011
Registration
SOR/2011-7 February 4, 2011
EXCISE ACT, 2001
ARCHIVED — Regulations Respecting Prescribed Brands of Manufactured Tobacco and Prescribed Cigarettes
P.C. 2011-41 February 3, 2011
His Excellency the Governor General in Council, on the recommendation of the Minister of National Revenue, pursuant to paragraph 304(1)(o) of the Excise Act, 2001 (see footnote a), hereby makes the annexed Regulations Respecting Prescribed Brands of Manufactured Tobacco and Prescribed Cigarettes.
REGULATIONS RESPECTING PRESCRIBED BRANDS OF MANUFACTURED TOBACCO AND PRESCRIBED CIGARETTES
INTREPRETATION
1. In these Regulations, “Act” means the Excise Act, 2001.
PRESCRIBED BRANDS OF MANUFACTURED TOBACCO
2. The brands of manufactured tobacco set out in Schedule 1 are prescribed brands for the purposes of subsection 38(3) of the Act.
PRESCRIBED CIGARETTES
3. Cigarettes exported under a brand set out in Schedule 2 are prescribed cigarettes for the purposes of paragraph 38(4)(a) of the Act.
COMING INTO FORCE
4. These Regulations come into force on the day on which section 4 of the Regulations Amending the Stamping and Marking of Tobacco Products Regulations (2011) comes into force but if they are registered after that day, they come into force on the day on which they are registered.
SCHEDULE 1
(Section 2)
BRANDS OF MANUFACTURED TOBACCO
ABC
American Choice Full Flavour 100’s
American Choice Full Flavour King Size
American Choice Light 100’s
American Choice Light King Size
American Choice Menthol 100’s
American Choice Menthol King Size
American Choice Menthol Light 100’s
American Choice Menthol Light King Size
American Choice Non Filter King Size
American Choice Ultra Light 100’s
American Choice Ultra Light King Size
Bacha
Baja Full Flavour 100’s
Baja Full Flavour KS
Baja Lights 100’s
Baja Lights KS
Baja Menthol 100’s
Baja Menthol KS
Baja Menthol Light KS
Baja Menthol Lights 100’s
Baja Non Filter KS
Baja Ultra Light 100’s
Baja Ultra Light KS
Bronza Gold
Bronza Silver
Camron Bay Full Flavour 100’s
Camron Bay Full Flavour King Size
Camron Bay Light 100’s
Camron Bay Light King Size
Camron Bay Menthol 100’s
Camron Bay Menthol King Size
Camron Bay Menthol Light 100’s
Camron Bay Menthol Light King Size
Camron Bay Non Filter King Size
Camron Bay Ultra Light 100’s
Camron Bay Ultra Light King Size
Canadian Gold
Canadian Natural Fine Cut Tobacco
Capitol
Capitol Full Flavour
Capitol Lights
Caribou
Carolina
Catalina Full Flavour 100’s
Catalina Full Flavour King Size
Catalina Light 100’s
Catalina Light King Size
Catalina Menthol 100’s
Catalina Ultra Light 100’s
Champion
Chief
CIGS Full Flavour 100’s
CIGS Full Flavour King Size
CIGS Light 100’s
CIGS Light King Size
CIGS Menthol 100’s
CIGS Menthol King Size
CIGS Menthol Light 100’s
CIGS Menthol Light King Size
CIGS Ultra Light 100’s
CIGS Ultra Light King Size
Cijara
Coastal
Cobalt
Deer
Desert
Donia
Doral
Export ‘A’ Custom Cut
Export ‘A’ Preferred
Export ‘A’ Preferred Cut
Export ‘A’ Select
Export ‘A’ Select Cut
Export ‘A’ Special Cut
Flame
Future
Galbi
General Jack’s Full Flavour 100’s
General Jack’s Full Flavour KS
General Jack’s Lights 100’s
General Jack’s Lights KS
General Jack’s Menthol 100’s
General Jack’s Menthol KS
General Jack’s Menthol Lights 100’s
General Jack’s Menthol Lights KS
General Jack’s Non Filter KS
General Jack’s Ultra Lights 100’s
General Jack’s Ultra Lights KS
Gold Coast
GPC
GPC Approved
GPC Full Flavour
GPC Lights
GPC Ultra Lights
Great
Imperial Special Blend
Kent
King
Lucky Strike
MacDonald Export ‘A’ Custom Cut
MacDonald Export ‘A’ Preferred
MacDonald Export ‘A’ Preferred Cut
MacDonald Export ‘A’ Select
MacDonald Export ‘A’ Select Cut
MacDonald Export ‘A’ Special Cut
Max X King Size
Max X Light King Size
MAXX King Size
MAXX Light King Size
MAXX Light Regular Size
MAXX Regular Size
Median
Médina
Mercer
Mild Seven
Mohawk Full Flavour 100’s
Mohawk Full Flavour King Size
Mohawk Light 100’s
Mohawk Light King Size
Mohawk Menthol 100’s
Mohawk Menthol King Size
Mohawk Menthol Light 100’s
Mohawk Menthol Light King Size
Mohawk Menthol Ultra Light 100’s
Mohawk Menthol Ultra Light King Size
Mohawk Ultra Light 100’s
Mohawk Ultra Light King Size
Monarch
Monte Carlo
Montreal Blend
Moose
MVP Full Flavour 100’s
MVP Full Flavour King Size
MVP Light 100’s
MVP Light King Size
MVP Menthol 100’s
MVP Menthol King Size
MVP Menthol Light 100’s
MVP Menthol Light King Size
MVP Non Filter King Size
MVP Ultra Light 100’s
MVP Ultra Light King Size
Native Sun Full Flavour 100’s
Native Sun Full Flavour King Size
Native Sun Light 100’s
Native Sun Light King Size
Native Sun Menthol 100’s
Native Sun Menthol King Size
Native Sun Menthol Light 100’s
Native Sun Menthol Light King Size
Native Sun Non Filter King Size
Native Sun Ultra Light 100’s
Native Sun Ultra Light King Size
Opal Full Flavour 120’s
Optiva Full Flavour 100’s
Optiva Full Flavour King Size
Optiva Lights 100’s
Optiva Lights King Size
Optiva Menthol 100’s
Optiva Menthol King Size
Optiva Menthol Lights 100’s
Optiva Menthol Lights King Size
Optiva Non Filter King Size
Optiva Ultra Lights 100’s
Optiva Ultra Lights King Size
Orchard
Orleans
Palm
Piano
Price Full Flavour 100’s
Price Full Flavour King Size
Price Light 100’s
Price Light King Size
Price Menthol 100’s
Price Menthol King Size
Price Menthol Light 100’s
Price Menthol Light King Size
Price Menthol Ultra Light 100’s
Price Menthol Ultra Light King Size
Price Ultra Light 100’s
Price Ultra Light King Size
Private Supreme King Size
Private Supreme Light King Size
Private Supreme Light Regular Size
Private Supreme Regular Size
Queen
Racing
Raïs Menthol
Raja
Real Supreme King Size
Real Supreme Light King Size
Real Supreme Light Regular Size
Real Supreme Regular Size
Regular
Remington
Revelation
Rocky
Savage
Scenic 101
Senator Full Flavour 100’s
Senator Full Flavour King Size
Senator Light 100’s Senator Light King Size
Senator Menthol 100’s
Senator Menthol King Size
Senator Menthol Light 100’s
Senator Menthol Light King Size
Senator Non Filter King Size
Senator Ultra Light 100’s
Senator Ultra Light King Size
Seneca Full Flavour
Seneca Full Flavour 100’s
Seneca Lights
Seneca Lights 100’s
Seneca Menthol Full Flavour
Seneca Menthol Full Flavour 100’s
Seneca Menthol Lights
Seneca Menthol Lights 100’s
Seneca Ultra Lights
Seneca Ultra Lights 100’s
Square
State
Sunset
Tail
Tassili
Temple
Thunder
Tip
Trail
Tribe Full Flavour 100’s
Tribe Full Flavour King Size
Tribe Light 100’s
Tribe Light King Size
Tribe Menthol 100’s
Tribe Menthol King Size
Tribe Menthol Light 100’s
Tribe Menthol Light King Size
Tribe Menthol Ultra Light 100’s
Tribe Menthol Ultra Light King Size
Tribe Ultra Light 100’s
Tribe Ultra Light King Size
Trophy
Tuna
Vermont
Versace Deluxe Ultra Lights 100’s
Versace Deluxe Ultra Lights King Size
Versace Full Flavour 100’s
Versace Full Flavour King Size
Versace Lights 100’s
Versace Lights King Size
Versace Menthol 100’s
Versace Menthol King Size
Versace Menthol Lights 100’s
Versace Menthol Lights King Size
Versace Non Filter King Size
Versace Ultra Lights 100’s
Versace Ultra Lights King Size
Viceroy
Virginia
Walou
Watt
Wave
Westport Full Flavour 100’s
Westport Full Flavour King Size
Westport Lights 100’s
Westport Lights King Size
Westport Menthol 100’s
Westport Menthol King Size
Westport Menthol Lights 100’s
Westport Menthol Lights King Size
Westport Non Filter King Size
Westport Ultra Lights 100’s
Westport Ultra Lights King Size
Whisky
Wildcat
XYZ
Yankee Blend Fine Cut Tobacco
Zenith
Zodiac
SCHEDULE 2
(Section 3)
BRANDS OF CIGARETTES
Canadian Gold
Zig Zag
REGULATORY IMPACT
ANALYSIS STATEMENT
(This statement is not part of the Regulations.)
Issue and objectives
The Excise Act, 2001 (the Act) governs federal taxation of tobacco and imposes excise duty on domestically manufactured and imported tobacco products for consumption in Canada. Tobacco products manufactured in Canada or imported into Canada are “stamped” to indicate that federal excise duty has been paid. However, the Act provides that manufactured tobacco and cigars that are not intended for entry into the Canadian duty-paid market are not required to be stamped, but instead require “tobacco markings.” Depending on the circumstances, the tobacco marking will specify that the product is not for sale in Canada or not duty-paid. The specific wording, format and application of stamps and tobacco markings are outlined in the current Stamping and Marking of Tobacco Products Regulations (the Regulations).
Subsection 38(1) of the Act requires that “tobacco markings” be applied to certain unstamped tobacco products. However, under subsections 38(3) and (4) of the Act, certain brands of manufactured tobacco and cigarettes are conditionally relieved from the tobacco marking requirements. For the exemption to apply, the brands of manufactured tobacco and cigarettes must be prescribed by regulation. In addition, the manufactured tobacco cannot be commonly sold in Canada and, in the case of cigarettes, the particular formulation must never have been sold in Canada.
Sections 8 and 9, together with Schedules 9 and 10, of the Regulations identify the brands of manufactured tobacco and cigarettes that are prescribed for purposes of subsections 38(3) and (4) of the Act. Therefore, these brands of manufactured tobacco and cigarettes may qualify for relief from the tobacco marking requirements. Since these provisions serve a different purpose from the other provisions of the Regulations (which elaborate on the format of tobacco stamps, tobacco markings and other prescribed information requirements), their incorporation in the Regulations has led to confusion.
As part of a restructuring of the Regulations, sections 8 and 9, as well as Schedules 9 and 10, have been transferred to a new regulation entitled Regulations Respecting Prescribed Brands of Manufactured Tobacco and Prescribed Cigarettes that is dedicated entirely to brands of manufactured tobacco and cigarettes that may be relieved from the marking requirements to
(a) make it clear that they serve a different purpose; and
(b) minimize complications that might arise when making legislative or regulatory changes to either the stamping, tobacco marking and other information requirements or the prescribed brands of manufactured tobacco and prescribed cigarettes provisions.
Description and rationale
Under the Act, manufactured tobacco and cigars that are not intended for entry into the Canadian duty-paid market require “tobacco markings.” The Regulations set out the requirements for tobacco markings such as those required on containers of manufactured tobacco that are intended for export. Depending on the circumstances, the tobacco marking will specify that the product is not for sale in Canada or not duty-paid.
However, brands of manufactured tobacco that are not commonly sold in Canada or brands of certain cigarettes of a particular formulation that have never been sold in Canada may qualify for relief from the tobacco marking requirements provided they are prescribed by regulation.
In addition to being subject to the marking requirements, tobacco products that are manufactured in Canada and exported are also subject to a special duty. However, certain brands of tobacco products and cigarettes may be conditionally relieved from this special duty if they are prescribed in the Regulations Relieving Special Duty on Certain Tobacco Products.
Relief under the tobacco marking regime works concurrently with the relief from special duty. Consequently, the prescribed brands identified in the current Stamping and Marking of Tobacco Products Regulations exactly match the prescribed brands identified in the Regulations Relieving Special Duty on Certain Tobacco Products such that these products may be exported without tobacco markings and without payment of special duty. This outcome enables these products to be sold in foreign markets on a competitive basis.
Tobacco manufacturers in Canada who make certain unstamped tobacco products specifically for export do so with the intention that these products will be relieved of the marking requirements and special duty. Therefore, these manufacturers must ensure that these products meet the conditions that would qualify them for relief. It would be beneficial to these manufacturers if, similar to the specific regulation listing brands of tobacco products and cigarettes that are prescribed for purposes of relief from special duty, there existed a specific regulation they could refer to that clearly distinguishes prescribed brands of manufactured tobacco and cigarettes for purposes of relief from the tobacco marking requirements.
To this end, as part of a restructuring of the Stamping and Marking of Tobacco Products Regulations, sections 8 and 9 as well as Schedules 9 and 10 have been transferred to a new regulation entitled Regulations Respecting Prescribed Brands of Manufactured Tobacco and Prescribed Cigarettes, with only a minor wording change. Consistent with the wording of subsection 38(3) of the Act, it is proposed that the reference to “tobacco products” be replaced with “manufactured tobacco.” This regulatory proposal will not introduce any changes to the list of prescribed brands.
Since these provisions already exist and are simply being transferred to a new regulation, there are no costs or savings with respect to this proposal. However, transferring these provisions to a new regulation highlights the specific application of the Regulations, thereby facilitating their administration.
Consultation
Since these provisions are simply being transferred from the Stamping and Marking of Tobacco Products Regulations to the newly created Regulations, no consultation was conducted. There will be no change to the way these provisions are currently administered by the Canada Revenue Agency (CRA). The CRA will notify affected persons and stakeholders of the transfer of these provisions to the new Regulations.
Contact
Mr. Phil McLester
Director
Excise Duties and Taxes Division
320 Queen Street
Place de Ville, Tower A, 20th Floor
Ottawa, Ontario
K1A 0L5
Telephone: 613-954-0111
Fax: 613-954-2226
Email: Phil.McLester@cra-arc.gc.ca
Footnote a
S.C. 2002, c. 22