Regulations Amending the Fuel Charge Regulations: SOR/2019-265

Canada Gazette, Part II, Volume 153, Number 14

Registration

SOR/2019-265 June 25, 2019

GREENHOUSE GAS POLLUTION PRICING ACT

P.C. 2019-955 June 22, 2019

Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to sections 166 and 168 of the Greenhouse Gas Pollution Pricing Act footnote a, makes the annexed Regulations Amending the Fuel Charge Regulations.

Regulations Amending the Fuel Charge Regulations

Amendments

1 (1) Section 1 of the Fuel Charge Regulations footnote 1 is replaced by the following:

Definitions

1 The following definitions apply in these Regulations.

Act means the Greenhouse Gas Pollution Pricing Act. (Loi)

fuel charge system has the same meaning as in subsection 168(1) of the Act. (régime de redevance sur les combustibles)

(2) Section 1 of the Regulations is amended by adding the following in alphabetical order:

eligible greenhouse means a greenhouse all or substantially all of which is used for the growing of vegetables, fruits, bedding plants, flowers, ornamental plants, tree seedlings, medicinal plants or other plants. (serre admissible)

eligible greenhouse activity means the use of a qualifying greenhouse fuel to heat an eligible greenhouse or to supplement carbon dioxide in an eligible greenhouse in order to grow or produce plants. (activité de serre admissible)

export means export from Canada. (exportation)

greenhouse operator means a person that carries on a business of growing vegetables, fruits, bedding plants, flowers, ornamental plants, tree seedlings, medicinal plants or other plants in eligible greenhouses with a reasonable expectation of profit. (exploitant de serre)

main electrical network means a network for the distribution of electricity that is subject to the standards of the North American Electric Reliability Corporation. (réseau électrique principal)

qualifying greenhouse fuel means a type of fuel that is marketable natural gas or propane. (combustible de serre admissible)

qualifying power plant fuel means a type of fuel that is light fuel oil or marketable natural gas. (combustible de centrale électrique admissible)

remote community means a geographic area that is not serviced by a main electrical network and that is not serviced by a distribution system. (collectivité éloignée)

remote power plant means a power plant that

remote power plant operator means a person that operates a remote power plant. (exploitant de centrale électrique éloignée)

2 The Regulations are amended by adding the following after section 3:

PART 1.1

Adjustment Day

Adjustment day

3.1 For the purposes of the definition adjustment day in section 3 of the Act, the following days are prescribed:

July 1, 2019 — Yukon and Nunavut

3.2 Except if section 10 or 16 applies, for the purposes of the fuel charge system and of applying subsection 38(1) of the Act in respect of the adjustment day that is July 1, 2019, paragraph (a) of the description of B in that subsection is adapted as follows:

3 The Regulations are amended by adding the following after section 4:

PART 3

Rebates

Rebate — fuel exported by non-resident

5 (1) For the purposes of section 48 of the Act, if at a particular time a quantity of fuel is exported by a person that is not resident in Canada and not registered for the purposes of Part 1 of the Act and if the quantity of fuel was delivered at an earlier time to the person in a listed province by a registered distributor in respect of that type of fuel, the Minister must pay a rebate to the registered distributor in respect of the quantity of fuel, the listed province and the reporting period of the registered distributor that includes the particular time if

Amount of rebate

(2) For the purposes of section 48 of the Act, the amount of the rebate under subsection (1) is equal to the amount of the charge referred to in paragraph (1)(a).

Non-application

(3) The rebate under subsection (1) is not payable to the extent that the fuel is exported in a supply tank of a vehicle.

Non-application

(4) The rebate under subsection (1) is not payable if the type of fuel is gasoline, kerosene, light fuel oil or propane and the quantity of the fuel that is exported otherwise than in a supply tank of a vehicle does not exceed 1000 L.

PART 4

Fishers

Prescribed listed provinces — fishers

6 For the purposes of subparagraph 17(2)(a)(iii.1) of the Act, the following listed provinces are prescribed:

PART 5

Greenhouse Operators

Charge — diversion by greenhouse operator

7 (1) For the purposes of section 26 of the Act, if at any time fuel that is qualifying greenhouse fuel is delivered in a listed province by a registered distributor in respect of that type of fuel to a particular person that is a greenhouse operator and an exemption certificate referred to in subsection 9(1) applies in respect of the delivery in accordance with section 36 of the Act, the particular person must pay a charge in respect of the fuel and the listed province in the amount determined under subsection (6) to the extent that, at a later time, the fuel is

When charge payable

(2) For the purposes of section 26 of the Act, the charge referred to in subsection (1) becomes payable at the later time referred to in that subsection.

Charge not payable

(3) For the purposes of section 27 of the Act, the charge referred to in subsection (1) is not payable if the particular person is not, at the later time referred to in that subsection, a greenhouse operator or if a charge is payable under section 37 of the Act in respect of the fuel.

Charge — ceasing to be a greenhouse operator

(4) For the purposes of section 26 of the Act, if at any time fuel that is qualifying greenhouse fuel is delivered in a listed province by a registered distributor in respect of that type of fuel to a particular person that is a greenhouse operator, if an exemption certificate referred to in subsection 9(1) applies in respect of the delivery in accordance with section 36 of the Act and if the particular person ceases, at a later time, to be a greenhouse operator, the particular person must pay a charge in respect of the fuel and the listed province in the amount determined under subsection (6) to the extent that, at the later time, the fuel is held in the listed province by the particular person. The charge becomes payable at the later time.

Charge not payable

(5) For the purposes of section 27 of the Act, the charge referred to in subsection (4) is not payable if

Amount of charge

(6) For the purposes of section 26 of the Act, the amount of the charge payable under subsection (1) or (4) in respect of the fuel and the listed province is equal to the amount determined by the formula:

A × B × 0.8

where

Exemption certificate — greenhouse operator

8 For the purposes of subparagraph 36(1)(b)(viii) of the Act, a greenhouse operator is a prescribed person and the prescribed circumstances are that the fuel is for use exclusively in eligible greenhouse activities.

Application — delivery to greenhouse operator

9 (1) For the purposes of subsection 40(3) of the Act, the amount of a charge in respect of fuel and a listed province payable under subsection 17(1) of the Act is to be determined in accordance with this section if

Amount of charge

(2) If subsection (1) applies, the amount of the charge payable in respect of the fuel and the listed province is equal to the amount determined by the formula:

A × B × 0.2

where

Amount of charge — adjustment day

10 For the purposes of the fuel charge system and of applying subsection 38(1) of the Act in respect of fuel that is a qualifying greenhouse fuel and that is held at the beginning of an adjustment day in a listed province by a person that is a greenhouse operator, the formula in that subsection and the descriptions in that formula are adapted as follows:

[A − (0.8 × B)] × (C − D)

where

Registration — delivery to greenhouse operator

11 For the purposes of paragraph 55(3)(c) of the Act, a person may apply under subsection 55(3) of the Act to be registered as a distributor in respect of a type of fuel that is a qualifying greenhouse fuel if the person carries on the business of selling, delivering or distributing fuel of that type and, in the ordinary course of that business, delivers fuel of that type in a listed province to a greenhouse operator.

PART 6

Remote Power Plant Operators

Charge not payable — remote power plant operator

12 For the purposes of subparagraph 17(2)(a)(iv) of the Act, a charge is not payable in respect of fuel that is a qualifying power plant fuel if the fuel is delivered by a registered distributor in respect of that type of fuel to a remote power plant operator and an exemption certificate applies in respect of the delivery in accordance with section 36 of the Act.

Charge — diversion by remote power plant operator

13 (1) For the purposes of section 26 of the Act, if at any time fuel that is a qualifying power plant fuel is delivered in a listed province by a registered distributor in respect of that type of fuel to a particular person that is a remote power plant operator and an exemption certificate applies in respect of the delivery in accordance with section 36 of the Act, the particular person must pay a charge in respect of the fuel and the listed province in the amount determined under section 40 of the Act to the extent that, at a later time, the fuel is

When charge payable

(2) For the purposes of section 26 of the Act, the charge referred to in subsection (1) becomes payable at the later time referred to in that subsection.

Charge not payable

(3) For the purposes of section 27 of the Act, the charge referred to in subsection (1) is not payable if the particular person is not, at the later time referred to in that subsection, a remote power plant operator or if a charge is payable under section 37 of the Act in respect of the fuel.

Charge — ceasing to be a remote power plant operator

(4) For the purposes of section 26 of the Act, if at any time fuel that is a qualifying power plant fuel is delivered in a listed province by a registered distributor in respect of that type of fuel to a particular person that is a remote power plant operator, if an exemption certificate applies in respect of the delivery in accordance with section 36 of the Act and if the particular person ceases, at a later time, to be a remote power plant operator, the particular person must pay a charge in respect of the fuel and the listed province in the amount determined under section 40 of the Act to the extent that, at the later time, the fuel is held in the listed province by the particular person. The charge becomes payable at the later time.

Charge not payable

(5) For the purposes of section 27 of the Act, the charge referred to in subsection (4) is not payable if

Charge not payable — remote power plant operator

14 For the purposes of section 27 of the Act, no charge is payable under subsection 18(1) of the Act in respect of fuel used by a person if the person is a remote power plant operator, the fuel is a qualifying power plant fuel and the fuel is used at the location of a remote power plant in the operation of the remote power plant.

Exemption certificate — remote power plant operator

15 For the purposes of subparagraph 36(1)(b)(viii) of the Act, a remote power plant operator is a prescribed person and the prescribed circumstances are that the fuel is for use exclusively at the location of a remote power plant in the operation of the remote power plant.

Amount of charge — adjustment day

16 For the purposes of the fuel charge system and of applying subsection 38(1) of the Act in respect of fuel that is a qualifying power plant fuel and that is held at the beginning of an adjustment day in a listed province by a person that is a remote power plant operator, the formula in that subsection and the descriptions in that formula are adapted as follows:

(A − B) × (C − D)

where

Registration — delivery to remote power plant operator

17 For the purposes of paragraph 55(3)(c) of the Act, a person may apply under subsection 55(3) of the Act to be registered as a distributor in respect of a type of fuel that is a qualifying power plant fuel if the person carries on the business of selling, delivering or distributing fuel of that type and, in the ordinary course of that business, delivers fuel of that type in a listed province to a remote power plant operator.

PART 7

Farmers

Travel between farms and cardlock facilities

18 For the purposes of paragraph (c) of the definition eligible farming activity in section 3 of the Act, a prescribed activity is the operation of eligible farming machinery for the purposes of travelling between a farm and a cardlock facility to obtain qualifying farming fuel.

Exemption certificate — delivery at cardlock facilities

19 For the purposes of subparagraph 36(1)(b)(viii) of the Act, a farmer is a prescribed person and the prescribed circumstances are that the location at which the fuel is delivered is a cardlock facility, that the fuel is for use exclusively in the operation of eligible farming machinery or of an auxiliary component of eligible farming machinery and that all or substantially all of the fuel is for use in the course of eligible farming activities.

Registration — delivery to farmer at cardlock

20 For the purposes of paragraph 55(3)(c) of the Act, a person may apply under subsection 55(3) of the Act to be registered as a distributor in respect of a type of fuel that is a qualifying farming fuel if the person carries on the business of selling, delivering or distributing fuel of that type and, in the ordinary course of that business, delivers fuel of that type in a listed province to a farmer at a cardlock facility.

PART 8

Annual Net Fuel Adjustment — Rail Carriers

Definition of specified year

21 For the purposes of sections 33, 35, 40, 47 and 52 of the Act, as adapted by section 22, specified year means a period of 12 months beginning on April 1st.

Adaptation — timing of adjustment

22 For the purposes of the fuel charge system,

4 The Regulations are amended by adding the following after section 4:

PART 9

Covered Facilities

Person responsible for a facility

23 For the purposes of this Part, a person responsible for a facility is a person referred to in paragraph 24(c) in respect of the facility.

Prescribed covered facility

24 For the purposes of paragraph (b) of the definition covered facility in section 3 of the Act, one or more sites including structures and equipment situated at those sites (referred to in this Part as a “facility”) is a prescribed facility if

Application — facility in Saskatchewan

25 (1) A person responsible for a facility may apply to the Minister of the Environment for a determination of whether the condition in paragraph 24(d) is met in respect of the facility. The person must provide to that Minister the information in respect of the facility necessary for that Minister to determine if that condition is met in respect of the facility and any other information in respect of the facility that that Minister considers relevant for the purposes of this Part.

Statement in writing

(2) On receipt of the application referred to in subsection (1), the Minister of the Environment must, with all due dispatch, examine the application and issue a statement in writing to the person confirming whether or not the condition in paragraph 24(d) is met in respect of the facility for the purposes of the fuel charge system.

Ceasing to be a person responsible

(3) If a statement referred to in subsection (2) confirming that the condition in paragraph 24(d) is met in respect of a facility has been issued to a person, the person must without delay notify the Minister of the Environment in writing when the person ceases to be a person responsible for the facility.

Change in respect of a facility

(4) If a statement has been issued to a person under subsection (2) confirming that the condition in paragraph 24(d) is met in respect of a facility, if no subsequent statement referred to in subsection (6) has been issued indicating that this condition is no longer met and if there is a change in respect of the facility that could materially affect either the boundary of any site of the facility or a new determination under subsection (2) in respect of the facility if such a determination were made, then the person must without delay provide in writing to the Minister of the Environment updated information in respect of that change and any other information in respect of the facility that that Minister considers relevant for the purposes of this Part.

Information request

(5) A person to which a statement was issued under subsection (2) confirming that the condition in paragraph 24(d) is met in respect of a facility and to which no subsequent statement referred to in subsection (6) has been issued indicating that this condition is no longer met must without delay provide to the Minister of the Environment in writing any information in respect of the facility that is relevant for the purposes of this Part, upon request by that Minister.

Conditions no longer met

(6) If a statement has been issued to a person under subsection (2) confirming that the condition in paragraph 24(d) is met in respect of a facility and the facility ceases to meet that condition, the Minister of the Environment must, with all due dispatch, issue to the person a statement in writing indicating that that condition is no longer met.

Covered facility of a person

26 For the purposes of paragraph 5(b) of the Act, a person meets prescribed conditions in respect of a covered facility if the facility is a prescribed facility under section 24 and a statement referred to in subsection 25(2) has been issued to the person in respect of the facility.

Emitter — registration permitted

27 For the purposes of paragraph 57(1)(b) of the Act, a facility is a prescribed facility and a person is a prescribed person in respect of the facility if the facility is a prescribed facility under section 24 and a statement referred to in subsection 25(2) has been issued to the person in respect of the facility.

5 Section 6 of the Regulations is amended by striking out “and” at the end of paragraph (c) and by adding the following after paragraph (d):

Coming into Force

6 (1) Subject to subsections (2) and (3), these Regulations are deemed to have come into force on January 1, 2019.

(2) Subsection 1(2) and sections 2 and 3 are deemed to have come into force on April 1, 2019.

(3) Section 5 comes into force, or is deemed to have come into force, on July 1, 2019.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

The Greenhouse Gas Pollution Pricing Act (GGPPA) provides the legal framework and enabling authorities for the federal pollution pricing backstop system (the federal backstop system) for the purpose of ensuring that the pricing of greenhouse gas (GHG) emissions (i.e. pollution pricing) is applied broadly in Canada. The federal backstop system has two components: a charge on fossil fuels and an output-based pricing system (OBPS) for large industry. The Fuel Charge Regulations were implemented to provide additional rules for the proper functioning of the fuel charge system. In order to continue to ensure the proper functioning of the fuel charge system and to respond to issues brought to the attention of the Department of Finance by Canadians, businesses, governments or other stakeholders or by the Canada Revenue Agency (CRA), certain modifications to the fuel charge system need to be made by way of regulatory amendments.

Background

Part 1 of the GGPPA, administered by the CRA, establishes a charge on fossil fuels — known as the fuel charge — that will generally be paid by fuel producers or distributors and generally applies to fossil fuels produced, delivered or used in a backstop jurisdiction, brought into a backstop jurisdiction from another place in Canada, or imported into Canada at a location in a backstop jurisdiction. Part 1 of the GGPPA provides the legal framework and enabling authorities for the fuel charge in backstop jurisdictions (i.e. the “listed provinces” included in Part 1 of Schedule 1 the GGPPA) with the aim of ensuring that the pricing of GHG emissions is applied broadly in Canada. The fuel charge applies at the rates set out in Schedule 2 to the GGPPA and those rates vary by fuel type, based on global warming potential factors and emissions factors associated with the combustion of each fuel type. The rates increase annually up to 2022. The GGPPA also provides that certain modifications to the fuel charge system may be made by way of regulation.

Objective

The objective of the Regulations Amending the Fuel Charge Regulations (the amending Regulations) is to implement the following measures:

Description

The amending Regulations include the following amendments:

Fuel charge relief for electricity generation for remote communities

The amending Regulations provide relief of the fuel charge to light fuel oil (e.g. diesel) and marketable natural gas that is used in the operation of power plants that generate electricity for remote communities. The relief is provided through the use of exemption certificates, similar to other exemption certificates under the GGPPA, such that the fuel charge would not apply to light fuel oil or marketable natural gas that is delivered by a registered distributor in respect of those types of fuel to a person that operates a remote power plant if that fuel is for use exclusively at the location of a remote power plant and in the operation of the remote power plant.

A remote power plant is defined to mean a power plant that generates electricity for general distribution to the public of a remote community, that is not connected to a main electrical network and that is not connected to a natural gas distribution system. A remote community is defined to mean a geographic area that is not serviced by a main electrical network and that is not serviced by a natural gas distribution system.

Diversion rules are also included, in line with existing provisions of the GGPPA, to ensure that the fuel charge applies if light fuel oil or marketable natural gas is used in a manner contrary to the intended relief.

This relief applies as of April 2019 in Ontario, New Brunswick, Manitoba and Saskatchewan and as of July 2019 in Yukon and Nunavut.

Partial fuel charge relief for eligible greenhouse operators

The amending Regulations provide partial relief of the fuel charge to marketable natural gas and propane that is used by greenhouse operators in eligible greenhouse activities. The relief is provided through the use of exemption certificates to fuel that is delivered by a registered distributor in respect of those types of fuel to a greenhouse operator, if the greenhouse operator declares that the fuel is for use exclusively in eligible greenhouse activities. If the conditions for relief are met, the fuel charge payable by the registered distributor in respect of fuel that is delivered is reduced by 80%.

Eligible greenhouse activity is defined to mean the use of marketable natural gas or propane to heat an eligible greenhouse or to supplement carbon dioxide in an eligible greenhouse in order to grow or produce plants. An eligible greenhouse is defined to mean a greenhouse all or substantially all of which is used for the growing of vegetables, fruits, bedding plants, flowers, ornamental plants, tree seedlings, medicinal plants or other plants. A greenhouse operator is defined to mean a person that carries on a business of growing vegetables, fruits, bedding plants, flowers, ornamental plants, tree seedlings, medicinal plants or other plants in eligible greenhouses with a reasonable expectation of profit.

Diversion rules are also included, in line with existing provisions of the GGPPA, to ensure that the fuel charge applies, in full, if marketable natural gas or propane is used in a manner contrary to the intended relief.

This relief applies as of April 2019 in Ontario, New Brunswick, Manitoba and Saskatchewan and as of July 2019 in Yukon and Nunavut.

Fuel that is exported from Canada by non-registered, non-resident persons

Under the GGPPA, a registered distributor generally pays the fuel charge upon delivery to another person that is not a registered distributor. To facilitate fuel charge relief on commercial exports of fuel from Canada by non-registered, non-resident persons, the amending Regulations include a rebate of the fuel charge if certain conditions are satisfied. Specifically, a rebate in respect of exported fuel would be provided to a registered distributor that delivered fuel in a listed province to a non-registered person that is not resident in Canada if

The rebate does not apply to fuel that is exported in the supply tank of a vehicle. The rebate also does not apply to fuel that is exported otherwise than in the supply tank of a vehicle if the fuel is gasoline, kerosene, light fuel oil (e.g. diesel) or propane, and the quantity of the fuel does not exceed 1 000 L.

This rebate applies as of April 2019 in Ontario, New Brunswick, Manitoba and Saskatchewan and as of July 2019 in Yukon and Nunavut.

Ensuring proper integration of the Saskatchewan provincial carbon pricing system with the federal fuel charge

The federal backstop system is implemented, in part, in Saskatchewan under the GGPPA with the following features:

Under the GGPPA, a person that is responsible for a covered facility under the federal OBPS and that has been issued a certificate in respect of the covered facility by the Minister of the Environment may apply to the CRA to be registered as an emitter. A registered distributor can deliver fuel to a registered emitter without paying the fuel charge if the fuel is for use at a covered facility of the emitter, subject to certain conditions. Under these amending Regulations, a person that is responsible for a facility covered by Saskatchewan’s output-based performance standards system will be eligible to register with the CRA as an emitter for the purpose of Part 1 of the GGPPA, and the fuel charge would generally not apply to fuel delivered to these provincially covered facilities.

The amending Regulations integrate these provincially covered facilities in Saskatchewan with the federal fuel charge. Specifically, for purposes of the federal fuel charge, the following rules apply:

Other rules are included in the amending Regulations, in line with existing provisions in the GGPPA, to ensure that the relief applies in the manner intended. These include an obligation to notify the Minister of the Environment of certain changes that would have an impact on the application of the fuel charge (e.g. ceasing to be a person responsible for a prescribed covered facility).

These provisions are deemed to apply as of January 1, 2019.

Expanding relief of the fuel charge for farmers

The GGPPA provides farmers with relief from the fuel charge for fuels used in certain tractors, trucks and other farm machinery. The relief is provided through the use of exemption certificates, when certain conditions are met. Specifically, the GGPPA provides that a registered distributor can deliver, without the fuel charge applying, gasoline or light fuel oil (e.g. diesel) to a farmer at a farm, if the farmer certifies that the fuel is for use exclusively in the operation of eligible farming machinery and all or substantially all of the fuel is for use in the course of eligible farming activities.

The amending Regulations expand this relief such that a registered distributor can generally deliver, without the fuel charge applying, gasoline or light fuel oil (e.g. diesel) to a farmer at a cardlock facility, if the farmer certifies that the fuel is for use exclusively in the operation of eligible farming machinery and all or substantially all of the fuel is for use in the course of eligible farming activities.

This relief applies as of April 2019 in Ontario, New Brunswick, Manitoba and Saskatchewan and as of July 2019 in Yukon and Nunavut.

Technical amendments

The amending Regulations contain the following technical measures to ensure the proper functioning of the fuel charge system:

Regulatory development

Consultation

On October 23, 2018, the federal government announced details regarding where and when the federal backstop system would be applied, in whole or in part. At the time, the Government also released for public comment proposed partial relief of the fuel charge for natural gas and propane delivered to greenhouse operators and relief of the fuel charge for light fuel oil (e.g. diesel) delivered to power plant operators that generate electricity for remote communities.

In response to feedback from stakeholders, the Government proposed further refinements to the federal carbon pollution pricing system in Budget 2019 and released draft amendments for consultations on March 19, 2019. The draft amendments were available for public comment until April 19, 2019.

During the consultation period, the Government received almost 50 submissions from Canadians, businesses and other stakeholders. Most submissions received were not directly related to the draft regulations. A number of the submissions received were either general or administrative in nature. Of the submissions related to the draft regulations, some of the submissions noted that they were strongly supportive of the measures. The remaining submissions generally sought additional relief from the fuel charge to cover additional fuel types or additional circumstances.

Modern treaty obligations and Indigenous engagement and consultation

For the measures contained in the amending Regulations, no impacts have been identified in respect of the Government’s obligations in relation to Indigenous rights protected by section 35 of the Constitution Act, 1982, modern treaties or international human rights obligations.

Instrument choice

Under the GGPPA, the Governor in Council has the authority to determine rules relevant to the application of the fuel charge under Part 1 of the GGPPA. In order to provide certainty to stakeholders, the measures contained in the amending Regulations must be made into law and regulatory amendments are an appropriate mechanism by which to implement such rules.

Regulatory analysis

Costs and benefits

Overall, the amending Regulations are relieving in nature and would not impose new compliance costs on individuals or businesses. To access relief from the fuel charge under the amending Regulations, certain conditions (as outlined above in the description section) must be fulfilled. While there may be minimal administrative costs associated with fulfilling these conditions, the decision to access relief from the fuel charge under the amending Regulations is a voluntary one.

Small business lens

The fuel charge requirements under Part 1 of the GGPPA and the Fuel Charge Regulations generally apply to fuel producers and fuel distributors upstream in the distribution chain, which are generally medium or large-sized businesses. To the extent that small businesses may be impacted by the amending Regulations, they would not be subject to new compliance costs, and only minimal administrative costs if they chose to access relief under the amending Regulations. It is possible that some small businesses may benefit from the expanded relief from the fuel charge as provided for under the amending Regulations.

“One-for-One” Rule

As described above in the description section, the amending Regulations generally provide relief from payment of the fuel charge in certain circumstances. While there may be minimal administrative costs associated with fulfilling these conditions, the decision to access relief from the fuel surcharge under the amending Regulations is a voluntary one (i.e. the amending Regulations do not require businesses to access relief and therefore the administrative costs do not represent mandatory costs stemming from the amending Regulations). Therefore, the “One-for-One” Rule does not apply.

Regulatory cooperation and alignment

The amending Regulations are not related to a work plan or commitment under a formal regulatory cooperation forum.

Strategic environmental assessment

The amending Regulations make modifications to the existing rules contained in the fuel charge system under Part 1 of the GGPPA, and are generally technical in nature to ensure that the fuel charge applies as intended. A strategic environmental assessment was undertaken to assess the impacts in listed provinces as summarized below.

Given the targeted and generally technical nature of the amending Regulations, it is not expected that they will have a measurable impact on Canada’s ability to reach its 2030 emission reduction targets.

In combination with other measures outlined in the Pan-Canadian Framework on Clean Growth and Climate Change, the federal carbon pollution pricing system (including the fuel charge) will provide incentives to reduce energy use through conservation and efficiency measures, while also serving to drive fuel switching and technology advances, and thus will ultimately lead to reductions in greenhouse gas emissions and air pollution. These outcomes will directly and indirectly contribute to all the 2016–2019 Federal Sustainable Development Strategy (FSDS) goals, but specifically the FSDS goals of effective action on climate change, clean growth, and clean energy.

Gender-based analysis plus

The amending Regulations make modifications to the existing rules contained in the fuel charge system under Part 1 of the GGPPA and are generally technical in nature to ensure that the fuel charge applies as intended. A gender-based analysis plus (GBA+) was undertaken to assess the impacts on diverse groups in listed provinces, as summarized below.

Providing fuel charge relief for farmers to deliveries of gasoline and light fuel oil (e.g. diesel) at a cardlock facility will ensure that the relief provided to farming fuels applies in eligible farming activities as intended and will benefit farmers, farm workers and consumers of farm products produced in jurisdictions where the fuel charge will apply. It is not expected to have any significant impacts in Nunavut as there is no significant farming industry. In the farming industry in jurisdictions where the fuel charge will apply, 68%–76% of self-employed individuals are men (except in Yukon where the split between men and women is about 50:50) and 65%–78% of employees are men, while 68%–73% of unpaid family workers are women.

Providing relief of the fuel charge to light fuel oil (e.g. diesel) and marketable natural gas that is exclusively for use in operating a remote power plant that generates electricity for remote communities will directly benefit the operators of such power plants in jurisdictions where the federal fuel charge applies.

Providing partial relief of the fuel charge (i.e. 80%) for natural gas and propane that is exclusively for use in the operation of a commercial greenhouse will benefit operators of commercial greenhouses, likely a male-dominated group, in jurisdictions where the federal fuel charge applies. By addressing competitiveness concerns for this highly trade-exposed industry, this measure will indirectly benefit those employed in commercial greenhouses in jurisdictions where the federal fuel charge applies and those buying plants, including vegetables, fruits, bedding plants, cut flowers, ornamental plants, tree seedlings and medicinal plants from these greenhouses.

With respect to the other technical amendments, they are not expected to have any specific gender impacts and these would be covered by the previous GBA+ on the broader carbon pollution pricing system.

Implementation, compliance and enforcement, and service standards

The amending Regulations will be administered and enforced by the CRA as part of the fuel charge under Part 1 of the GGPPA.

Contacts

Gervais Coulombe
Sales Tax Division
Tax Policy Branch
Department of Finance Canada
90 Elgin Street
Ottawa, Ontario
K1A 0G5
Telephone: 613‑369‑3773

Ron Hagmann
Excise and GST/HST Rulings Directorate
Canada Revenue Agency
Place de Ville, Tower A, 9th Floor
320 Queen Street
Ottawa, Ontario
K1A 0L5
Telephone: 613‑670‑7360