C-47 1 37 49-50-51 Elizabeth II 2001-2002

An Act respecting the taxation of spirits, wine and tobacco and the treatment of ships’ stores

Excise Act, 2001

Excise, 2001 2002 6 13 22 2002 90171

SUMMARY

This enactment introduces a modern framework for the taxation of spirits, wine and tobacco. It re-enacts existing provisions in the Excise Act and the Excise Tax Act relating to the excise levies on these products, together with technical improvements, and incorporates a range of new provisions. The key features of the enactment include the following:

(

a) the continued imposition of a production levy on spirits, tobacco products and raw leaf tobacco and the replacement of the existing excise levy on sales of wine with a production levy at an equivalent rate;

(

b) the replacement of the excise duty and excise tax on tobacco products other than cigars with a single excise duty;

(

c) the introduction of excise warehouses to allow for the deferral of the payment of the production levy on domestic and imported spirits and wine to the time of sale to the retailer;

(

d) more comprehensive licensing requirements and new registration requirements for persons carrying on activities in relation to goods subject to duty;

(

e) explicit recognition of limited exemptions for certain goods produced by individuals for their personal use;

(

f) tight new controls on the possession and distribution of goods on which duty has not been paid;

(

g) modern provisions concerning the use of spirits and wine for non-beverage purposes and the use of specially denatured alcohol;

(

h) updated administrative provisions, including new remittance, assessment and appeal provisions that are similar to those under the Goods and Services Tax/Harmonized Sales Tax legislation;

(

i) updated enforcement provisions, including new offence, penalty and collection provisions; and

(

j) transitional provisions applicable to spirits, wine and tobacco products produced before the enactment comes into force.

This enactment also implements changes to the ships’ stores provisions, which were announced by the government on September 27, 2001. These changes broaden the enabling legislation for ships’ stores regulations and implement a temporary fuel tax rebate program for certain ships that, as a result of amendments to the Ships’ Stores Regulations effective June 1, 2002, will no longer qualify for ships’ stores relief.

Furthermore, this enactment implements the tobacco tax increases announced by the government on November 1, 2001.

Finally, the replacement of the existing provisions in the Excise Act and the Excise Tax Act relating to the excise levies on spirits, wine and tobacco necessitates consequential amendments to those Acts as well as other Acts, including the Budget Implementation Act, 2000 , the Canada Customs and Revenue Agency Act , the Criminal Code , the Customs Act , the Customs and Excise Offshore Application Act , the Customs Tariff , the Export Act , the Importation of Intoxicating Liquors Act , the Special Economic Measures Act and the Tax Court of Canada Act .

Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

SHORT TITLE

Short title

This Act may be cited as the Excise Act, 2001 .

INTERPRETATION

Definitions

The

definitions in this

section apply in this Act.

absolute ethyl alcohol

alcool éthylique absolu

absolute ethyl alcohol means the substance with the chemical composition C2H5OH.

accredited representative

représentant accrédité

accredited representative means a person who is entitled under the Foreign Missions and International Organizations Act to the tax exemptions specified in

Article 34 of the Convention set out in

Schedule I to that Act or in

Article 49 of the Convention set out in

Schedule II to that Act.

Agency

Agence

Agency means the Canada Customs and Revenue Agency established under subsection 4(1) of the Canada Customs and Revenue Agency Act .

alcohol

alcool

alcohol means spirits or wine.

alcohol licensee

titulaire de licence d’alcool

alcohol licensee means a person who is a spirits licensee or a wine licensee.

alcohol registrant

détenteur autorisé d’alcool

alcohol registrant means a person who holds an alcohol registration issued under

section 17.

analyst

analyste

analyst means a person who is designated as an analyst under

section 11.

approved formulation

préparation approuvée

approved formulation means

(

a) any product made with alcohol by a licensed user in accordance with a formula for which the user has approval from the Minister; and

(

b) any imported product that, in the opinion of the Minister, would be a product under paragraph (

a) if it were made in Canada by a licensed user.

assessment

cotisation

assessment means an assessment under this Act and includes a reassessment.

beer

bière

beer means beer or malt liquor as defined in

section 4 of the Excise Act .

black stock

non ciblé

black stock , in respect of manufactured tobacco, means that the tobacco is stamped but not marked in accordance with any statute of a province to indicate that it is intended for retail sale in a particular province or in particular provinces.

bottle-your-own premises

centre de remplissage libre-service

bottle-your-own premises means premises in which, in accordance with the laws of the province in which they are located, alcohol is supplied from a marked special container of alcohol for the purpose of being packaged by a purchaser.

bulk

en vrac

bulk , in respect of alcohol, means alcohol that is not packaged.

cigar

cigare

cigar includes

(

a) a cigarillo or cheroot; and

(

b) any roll or tubular construction intended for smoking that consists of a filler composed of pieces of natural or reconstituted leaf tobacco, a binder of natural or reconstituted leaf tobacco in which the filler is wrapped and a wrapper of natural or reconstituted leaf tobacco.

cigarette

cigarette

cigarette includes any roll or tubular construction intended for smoking, other than a cigar or a tobacco stick. If a cigarette exceeds 102 mm in length, each portion of 76 mm or less is considered to be a separate cigarette.

Commissioner

commissaire

Commissioner means the Commissioner of Customs and Revenue, appointed under

section 25 of the Canada Customs and Revenue Agency Act .

container

contenant

container , in respect of a tobacco product, means a wrapper, package, carton, box, crate or other container that contains the tobacco product.

customs bonded carrier

transporteur cautionné

customs bonded carrier means a person who transports or causes to be transported goods in accordance with

section 20 of the Customs Act .

customs bonded warehouse

entrepôt de stockage

customs bonded warehouse means a place that is licensed as a bonded warehouse under the Customs Tariff .

customs bonded warehouse licensee

exploitant agréé d’entrepôt de stockage

customs bonded warehouse licensee means a person licensed under the Customs Tariff to operate a bonded warehouse.

data

données

data means representations, in any form, of information or concepts.

denature

dénaturation

denature means to denature spirits into denatured alcohol or specially denatured alcohol using prescribed denaturants in the prescribed manner.

denatured alcohol

alcool dénaturé

denatured alcohol means any prescribed grade of denatured alcohol made from spirits in accordance with the prescribed specification for that grade.

duty

droit

duty means, unless a contrary intention appears, the duty imposed under this Act and the duty levied under

section 21.1 or 21.2 of the Customs Tariff and, except in Parts 3 and 4, includes special duty.

duty free shop

boutique hors taxes

duty free shop means a place that is licensed as a duty free shop under the Customs Act .

duty free shop licensee

exploitant agréé de boutique hors taxes

duty free shop licensee means a person licensed under the Customs Act to operate a duty free shop.

duty-paid market

marché des marchandises acquittées

duty-paid market means the market for goods in respect of which duty, other than special duty, is payable.

duty-paid value

valeur à l’acquitté

duty-paid value means

(

a) in respect of imported cigars, the value of the cigars as it would be determined for the purpose of calculating an ad valorem duty on the cigars in accordance with the Customs Act , whether or not the cigars are subject to ad valorem duty, plus the amount of any duty imposed on the cigars under

section 42 of this Act and

section 20 of the Customs Tariff ; and

(

b) in respect of imported cigars that, when imported, are contained in containers or otherwise prepared for sale, the total of the value of the cigars as determined in accordance with paragraph (

a) and the value similarly determined of the container in which they are contained.

excise warehouse

entrepôt d’accise

excise warehouse means the premises of an excise warehouse licensee that are specified by the Minister as the excise warehouse of the licensee.

excise warehouse licensee

exploitant agréé d’entrepôt d’accise

excise warehouse licensee means a person who holds an excise warehouse licence issued under

section 19.

export

exportation

export means to export from Canada.

ferment-on- premises facility

vinerie libre-service

ferment-on- premises facility means the premises of a ferment-on-premises registrant that are specified by the Minister as the registrant’s ferment-on-premises facility.

ferment-on- premises registrant

exploitant autorisé de vinerie libre-service

ferment-on- premises registrant means a person who holds a ferment-on-premises registration issued under

section 15.

fiscal month

mois d’exercice

fiscal month means a fiscal month as determined under

section 159.

foreign duty free shop

boutique hors taxes à l’étranger

foreign duty free shop means a retail store that is located in a country other than Canada and that is authorized under the laws of that country to sell goods free of certain duties and taxes to individuals who are about to leave that country.

foreign ships’ stores

provisions de bord à l’étranger

foreign ships’ stores means tobacco products taken on board a vessel or aircraft while the vessel or aircraft is outside Canada and that are intended for consumption by or sale to the passengers or crew while the passengers and crew are on board the vessel or aircraft.

Her Majesty

Sa Majesté

Her Majesty means Her Majesty in right of Canada.

import

importation

import means to import into Canada.

intoxicating liquor

boisson enivrante

intoxicating liquor has the same meaning as in

section 2 of the Importation of Intoxicating Liquors Act .

judge

juge

judge , in respect of any matter, means a judge of a superior court having jurisdiction in the province in which the matter arises or a judge of the Federal Court.

licensed tobacco dealer

commerçant de tabac agréé

licensed tobacco dealer means a person who holds a tobacco dealer’s licence issued under

section 14.

licensed user

utilisateur agréé

licensed user means a person who holds a user’s licence issued under

section 14.

liquor authority

administration des alcools

liquor authority means a government board, commission or agency that is authorized by the laws of a province to sell intoxicating liquor.

manufacture

fabrication

manufacture , in respect of a tobacco product, includes any step in the preparation or working up of raw leaf tobacco into the tobacco product. It includes packing, stemming, reconstituting, converting or packaging the raw leaf tobacco or tobacco product.

manufactured tobacco

tabac fabriqué

manufactured tobacco means every article, other than a cigar or packaged raw leaf tobacco, that is manufactured in whole or in part from raw leaf tobacco by any process.

mark

marquer

mark means, in respect of

(

a) a special container of spirits, to mark in the prescribed form and manner to indicate that the container is intended for

(

i) delivery to and use by a registered user, or

(ii)

delivery to and use at a bottle-your-own premises; and

(

b) a special container of wine, to mark in the prescribed form and manner to indicate that the container is intended for delivery to and use at a bottle-your-own premises.

Minister

ministre

Minister means the Minister of National Revenue.

month

mois

month means a period beginning on a particular day in a calendar month and ending on

(

a) the day immediately before the day in the next calendar month that has the same calendar number as the particular day; or

(

b) if the next calendar month does not have a day that has the same calendar number as the particular day, the last day of that next calendar month.

non-duty-paid

non acquitté

non-duty-paid , in respect of packaged alcohol, means that duty, other than special duty, has not been paid on the alcohol.

officer

préposé

officer , except in sections 167, 226 and 296, means a person who is appointed or employed in the administration or enforcement of this Act, a member of the Royal Canadian Mounted Police or a member of a police force designated under subsection 10(1).

packaged

emballé

packaged means

(

a) in respect of raw leaf tobacco or a tobacco product, packaged in a prescribed package; or

(

b) in respect of alcohol, packaged

(

i) in a container of a capacity of not more than 100 L that is ordinarily sold to consumers without the alcohol being repackaged, or

(ii)

in a marked special container.

partially manufactured tobacco

tabac partiellement fabriqué

partially manufactured tobacco means manufactured tobacco that is cut filler or cut rag or that is manufactured less fully than cut filler or cut rag.

peace officer

agent de la paix

peace officer has the same meaning as in

section 2 of the Criminal Code .

person

personne

person means an individual, a partnership, a corporation, a trust, the estate of a deceased individual, a government or a body that is a society, a union, a club, an association, a commission or another organization of any kind.

personal use

usage personnel

personal use , in relation to the use of a good by an individual, means the use of the good by the individual or by others at the individual’s expense. It does not include the sale or other commercial use of the good.

prescribed

Version anglaise seulement

prescribed means

(

a) in the case of a form or the manner of filing a form, authorized by the Minister;

(

b) in the case of the information to be given on or with a form, specified by the Minister; and

(

c) in any other case, prescribed by regulation or determined in accordance with rules prescribed by regulation.

produce

production

produce means

(

a) in respect of spirits, to bring into existence by distillation or other process or to recover; or

(

b) in respect of wine, to bring into existence by fermentation.

raw leaf tobacco

tabac en feuilles

raw leaf tobacco means unmanufactured tobacco or the leaves and stems of the tobacco plant.

record

registre

record means any material on which data are recorded or marked and which is capable of being read or understood by a person or a computer system or other device.

registered user

utilisateur autorisé

registered user means a person who holds a user’s registration issued under

section 16.

responsible

responsable

responsible , in relation to a person, means that the person is responsible for bulk alcohol in accordance with sections 104 to 121.

sale price

prix de vente

sale price , in respect of cigars, means the total of

(

a) the amount charged as the price for the cigars before an amount payable in respect of a tax under

Part IX of the Excise Tax Act is added,

(

b) the amount charged as the price for or in respect of the container in which the cigars are contained,

(

c) any amount that the purchaser is liable to pay to the vendor by reason of or in respect of the sale of the cigars in addition to the amount charged as the price, whether payable at the same or any other time, including, but not limited to, any amount charged for or to make provision for advertising, financing, commissions or any other matter, and

(

d) the amount of duty imposed on the cigars under

section 42.

SDA registrant

détenteur autorisé d’alcool spécialement dénaturé

SDA registrant means a person who holds a specially denatured alcohol registration issued under

section 18.

special container

contenant spécial

special container means

(

a) in respect of spirits, a container of a capacity of more than 100 L but not more than 1,500 L; and

(

b) in respect of wine, a container of a capacity of more than 100 L.

special duty

droit spécial

special duty means

(

a) in respect of a tobacco product, a special duty imposed under subsection 53(1), 54(2) or 56(1); and

(

b) in respect of imported spirits, the special duty imposed under subsection 133(1).

special excise warehouse

entrepôt d’accise spécial

special excise warehouse means the premises of a special excise warehouse licensee that are specified by the Minister as the special excise warehouse of the licensee.

special excise warehouse licensee

exploitant agréé d’entrepôt d’accise spécial

special excise warehouse licensee means a person who holds a special excise warehouse licence issued under

section 20.

specially denatured alcohol

alcool spécialement dénaturé

specially denatured alcohol means any prescribed grade of specially denatured alcohol made from spirits in accordance with the prescribed specification for that grade.

specified premises

local déterminé

specified premises , in respect of a licensed user, means the premises of the licensed user that are specified by the Minister under subsection 23(3).

spirits

spiritueux

spirits means any material or substance containing more than 0.5% absolute ethyl alcohol by volume nother than

(

a) wine;

(

b) beer;

(

c) vinegar;

(

d) denatured alcohol;

(

e) specially denatured alcohol;

(

f) an approved formulation; or

(

g) any product containing or manufactured from a material or substance referred to in paragraphs (

b) to (

f) that is not consumable as a beverage.

spirits licensee

titulaire de licence de spiritueux

spirits licensee means a person who holds a spirits licence issued under

section 14.

stamped

estampillé

stamped , in respect of a tobacco product, means that all prescribed information in a prescribed format is, in the prescribed manner, stamped, impressed, printed or marked on, indented into or affixed to the product or its container to indicate that duty, other than special duty, has been paid on the product.

sufferance warehouse

entrepôt d’attente

sufferance warehouse has the same meaning as in subsection 2(1) of the Customs Act .

sufferance warehouse licensee

exploitant agréé d’entrepôt d’attente

sufferance warehouse licensee means a person licensed under the Customs Act to operate a sufferance warehouse.

take for use

utilisation pour soi

take for use , in respect of alcohol, means to consume, analyze or destroy alcohol or to use alcohol for any purpose that results in a product other than alcohol.

Tax Court

Cour de l’impôt

Tax Court means the Tax Court of Canada.

tobacco dealer

commerçant de tabac

tobacco dealer means a person, other than a tobacco licensee, who

(

a) purchases for resale, sells or offers to sell raw leaf tobacco on which duty is not imposed under this Act; and

(

b) does not take physical possession of the tobacco.

tobacco licensee

titulaire de licence de tabac

tobacco licensee means a person who holds a tobacco licence issued under

section 14.

tobacco marking

mention obligatoire

tobacco marking means prescribed information that is required under this Act to be printed on or affixed to a container of tobacco products that are not required under this Act to be stamped.

tobacco product

produit du tabac

tobacco product means manufactured tobacco, packaged raw leaf tobacco or cigars.

tobacco stick

bâtonnet de tabac

tobacco stick means any roll or tubular construction of tobacco intended for smoking, other than a cigar, that requires further preparation to be consumed. If a tobacco stick exceeds 90 mm in length or 800 mg, each portion of 60 mm or less or each portion of 650 mg or less, respectively, is considered to be a separate stick.

wine

vin

wine means

(

a) a beverage, containing more than 0.5% absolute ethyl alcohol by volume, that is produced without distillation, other than distillation to reduce the absolute ethyl alcohol content, by the alcoholic fermentation of

(

i) an agricultural product other than grain,

(ii)

a plant or plant product, other than grain, that is not an agricultural product, or

(iii)

a product wholly or partially derived from an agricultural product or plant or plant product other than grain;

(

b) sake; and

(

c) a beverage described by paragraph (

a) or (

b) that is fortified not in excess of 22.9% absolute ethyl alcohol by volume.

wine licensee

titulaire de licence de vin

wine licensee means a person who holds a wine licence issued under

section 14.

References to other enactments

A reference in this Act to a repealed enactment, or a portion of it, of the legislature of a province or territory shall, with respect to a subsequent transaction, matter or thing, be read as a reference to the provisions of any enactment replacing the repealed enactment or portion that relate to the same subject-matter as the repealed enactment or portion. If there is no replacement enactment or portion, or if there are no provisions in the replacement enactment that relate to the same subject-matter, the repealed enactment or portion shall be read as unrepealed in so far as is necessary to maintain or give effect to the reference.

Meaning of administration or enforcement of this Act

For greater certainty, a reference in this Act to administration or enforcement of this Act includes the collection of any amount payable under this Act.

Constructive possession

(1) For the purposes of subsections 30(1) and 32(1),

section 61, subsections 70(1) and 88(1) and sections 230 and 231, if one of two or more persons, with the knowledge and consent of the rest of them, has anything in the person’s possession, it is deemed to be in the custody and possession of each and all of them.

Meaning of possession

(2) In this

section and in subsections 30(1) and 32(1),

section 61 and subsections 70(1) and 88(1), possession means not only having in one’s own personal possession but also knowingly

(

a) having in the actual possession or custody of another person; or

(

b) having in any place, whether belonging to or occupied by one’s self or not, for one’s own use or benefit or that of another person.

Arm’s length

(1) For the purposes of this Act,

(

a) related persons are deemed not to deal with each other at arm’s length; and

(

b) it is a question of fact whether persons not related to each other were, at any particular time, dealing with each other at arm’s length.

Related persons

(2) For the purposes of this Act, persons are related to each other if they are related persons within the meaning of subsections 251(2) to (6) of the Income Tax Act , except that

(

a) a reference in those subsections to “corporation” shall be read as a reference to “corporation or partnership”; and

(

b) a reference in those subsections to “shares” or “shareholders” shall, in respect of a partnership, be read as a reference to “rights” or “partners”, respectively.

PART 1

APPLICATION AND ADMINISTRATIVE MATTERS

Application to Her Majesty

Act binding on Her Majesty

This Act is binding on Her Majesty and Her Majesty in right of a province.

Administration and Officers

Minister’s duty

The Minister shall administer and enforce this Act and the Commissioner may exercise the powers and perform the duties of the Minister under this Act.

Officers and employees

(1) The officers, employees and agents that are necessary to administer and enforce this Act shall be appointed, employed or engaged in the manner authorized by law.

Delegation of powers

(2) The Minister may authorize a designated officer or agent or a class of officers or agents to exercise powers or perform duties of the Minister, including any judicial or quasi-judicial power or duty of the Minister, under this Act.

Designation of police forces

(1) The Minister and the Solicitor General of Canada may designate any police force in Canada for the purposes of the enforcement of any of the provisions of this Act that are specified in the designation, subject to any terms and conditions specified in the designation, for any period specified in the designation.

Persons to have powers and duties of officers

(2) All members of a police force designated under subsection (1) have the powers and duties of an officer for the purposes of the enforcement of the provisions of this Act specified in the designation.

Designation to be published

(3) A designation under subsection (1) or any variation or cancellation of that designation must be published in the Canada Gazette and is not effective before it is so published.

Designation of analysts

The Minister may designate any person or class of persons as an analyst for the purposes of this Act.

Administration of oaths

Any officer, if designated by the Minister for the purpose, may administer oaths and take and receive affidavits, declarations and affirmations for the purposes of or incidental to the administration or enforcement of this Act, and every officer so designated has for those purposes all the powers of a commissioner for administering oaths or taking affidavits.

Inquiries

Authorization of inquiry

(1) The Minister may, for any purpose related to the administration or enforcement of this Act, authorize any person, whether or not the person is an officer, to make any inquiry that the Minister considers necessary with reference to anything relating to the administration or enforcement of this Act.

Appointment of hearing officer

(2) If the Minister authorizes a person to make an inquiry, the Minister shall without delay apply to the Tax Court for an order appointing a hearing officer before whom the inquiry will be held.

Powers of hearing officer

(3) For the purposes of an inquiry, a hearing officer has all of the powers conferred on a commissioner under sections 4 and 5 of the Inquiries Act and that may be conferred on a commissioner under

section 11 of that Act.

When powers to be exercised

(4) A hearing officer shall exercise the powers conferred on a commissioner under

section 4 of the Inquiries Act in relation to any person that the person authorized to make the inquiry considers appropriate for the conduct of the inquiry, but the hearing officer shall not exercise the power to punish any person unless, on application by the hearing officer, a judge certifies that the power may be exercised in the matter disclosed in the application and the applicant has given to the person in respect of whom the power is proposed to be exercised 24 hours notice of the hearing of the application, or any shorter notice that the judge considers reasonable.

Rights of witnesses

(5) Any person who gives evidence in an inquiry is entitled to be represented by counsel and, on request made by the person to the Minister, to receive a transcript of that evidence.

Rights of person investigated

(6) Any person whose affairs are investigated in the course of an inquiry is entitled to be present and to be represented by counsel throughout the inquiry unless the hearing officer, on application by the Minister or a person giving evidence, orders otherwise in relation to the whole or any part of the inquiry, on the ground that the presence of the person and their counsel, or either of them, would be prejudicial to the effective conduct of the inquiry.

PART 2

LICENCES AND REGISTRATIONS

Licences

Issuance

(1) Subject to the regulations, on application, the Minister may issue to a person

(

a) a spirits licence, authorizing the person to produce or package spirits;

(

b) a wine licence, authorizing the person to produce or package wine;

(

c) a user’s licence, authorizing the person to use bulk alcohol or non-duty-paid packaged alcohol;

(

d) a tobacco licence, authorizing the person to manufacture tobacco products; or

(

e) a tobacco dealer’s licence, authorizing the person to carry on the activity of a tobacco dealer.

Deemed packaging excluded

(2) A person is not entitled to a licence under paragraph (1)(

a) or (

b) by reason only of having been deemed to have packaged alcohol under

section 77 or 82.

Deemed production excluded

(3) A person is not entitled to a licence under paragraph (1)(

a) by reason only of having been deemed to have produced spirits under subsection 131(2).

Registrations

Ferment-on-premises registration

Subject to the regulations, on application, the Minister may issue a ferment-on-premises registration to a person authorizing the person to possess at their ferment-on-premises facility bulk wine produced at the premises by an individual and owned by the individual.

User’s registration

Subject to the regulations, on application, the Minister may issue a user’s registration authorizing the use of non-duty-paid packaged spirits by

(

a) a scientific and research laboratory in receipt annually of aid from the Government of Canada or a province, for scientific purposes;

(

b) a university or other post-secondary educational institution recognized by a province, for scientific purposes;

(

c) a health care facility, for medicinal and scientific purposes; or

(

d) a health institution in receipt annually of aid from the Government of Canada or a province, for medicinal and scientific purposes.

Alcohol registration

Subject to the regulations, on application, the Minister may issue an alcohol registration to a person authorizing the person to store or transport bulk alcohol or specially denatured alcohol.

SDA registration

(1) Subject to the regulations, on application, the Minister may issue a specially denatured alcohol registration to a person authorizing the person to possess and use specially denatured alcohol.

Restrictions on grades of SDA

(2) The Minister may impose restrictions on the use of particular grades of specially denatured alcohol.

Excise Warehouses

Issuance of licence

(1) Subject to the regulations, on application, the Minister may issue an excise warehouse licence to a person who is not a retailer of alcohol authorizing the person to possess in their excise warehouse non-duty-paid packaged alcohol or a tobacco product that is not stamped.

Eligible retailers of alcohol

(2) Even if they are retailers of alcohol, the following persons may be issued an excise warehouse licence under subsection (1):

(

a) an alcohol licensee;

(

b) a liquor authority; and

(

c) any person who supplies goods in accordance with the Ships’ Stores Regulations .

Special Excise Warehouses

Issuance of licence

(1) Subject to the regulations, on application, the Minister may issue a special excise warehouse licence to a person who is authorized by a tobacco licensee to be the only person, other than the licensee, who is entitled to distribute to an accredited representative a tobacco product manufactured by the licensee.

Single licence

(2) The Minister shall not issue to the same person more than one special excise warehouse licence.

Licence limited to one premises

(3) The Minister shall not specify more than one premises of a special excise warehouse licensee as a special excise warehouse.

Return of tobacco products

(1) If a person ceases to be authorized by a tobacco licensee to distribute to an accredited representative a tobacco product manufactured by the tobacco licensee,

(

a) the person shall immediately return the tobacco product of that licensee that is stored in the person’s special excise warehouse to the excise warehouse of the tobacco licensee; and

(

b) the tobacco licensee shall immediately notify the Minister in writing that the person has ceased to be so authorized.

Cancellation

(2) The Minister shall cancel the special excise warehouse licence of the person if the person is no longer authorized by any tobacco licensee to distribute to an accredited representative a tobacco product.

Duty Free Shops

Issuance of licence

Subject to the regulations, the Minister may, on application, issue to a person who is licensed under the Customs Act to operate a duty free shop a licence authorizing the person to possess and sell imported manufactured tobacco that is subject to a special duty under

section 53.

General

Refusal to issue licence or registration

(1) The Minister may, for any reason the Minister considers sufficient in the public interest, refuse to issue a licence or registration.

Amendment or renewal

(2) Subject to the regulations, the Minister may amend, suspend, renew, cancel or reinstate any licence or registration.

Conditions imposed by Minister

(3) On issuing a licence or registration, or at any later time, the Minister

(

a) may, subject to the regulations, specify the activities that may be carried on under the licence or registration and the premises where those activities may be carried on;

(

b) shall, in the case of a spirits licence or a tobacco licence, require security in a form satisfactory to the Minister and in an amount determined in accordance with the regulations; and

(

c) may impose any other conditions that the Minister considers appropriate with respect to the carrying on of activities under the licence or registration.

Compliance with Act

A licensee or registrant shall not carry on any activity under their licence or registration otherwise than in accordance with this Act.

PART 3

TOBACCO

Regulation of Tobacco

Manufacturing tobacco product without a licence prohibited

(1) No person shall, other than in accordance with a tobacco licence issued to the person, manufacture a tobacco product.

Deemed manufacturer

(2) A person who, whether for consideration or otherwise, provides or offers to provide in their place of business equipment for use in that place by another person in the manufacture of a tobacco product is deemed to be manufacturing the tobacco product and the other person is deemed not to be manufacturing the tobacco product.

Exception — manufacturing for personal use

(3) An individual who is not a tobacco licensee may manufacture a tobacco product

(

a) from packaged raw leaf tobacco or manufactured tobacco on which the duty has been paid, if the product is for their personal use; or

(

b) from raw leaf tobacco grown on land on which the individual resides, if

(

i) the product is for their personal use or that of the members of their family who reside with the individual and who are 18 years of age or older, and

(ii)

the quantity of product manufactured in any year does not exceed 15 kg for the individual and each member of the individual’s family who resides with the individual and who is 18 years of age or older.

Tobacco dealer

No person shall carry on the activity of a tobacco dealer except in accordance with a tobacco dealer’s licence issued to the person.

Unlawful packaging or stamping

No person shall package or stamp any raw leaf tobacco or tobacco product unless the person

(

a) is a tobacco licensee; or

(

b) is the importer or owner of the tobacco or product and it has been placed in a sufferance warehouse for the purpose of being stamped.

Unlawful removal

(1) Except as permitted under

section 40, no person shall remove raw leaf tobacco or a tobacco product from the premises of a tobacco licensee unless the tobacco or product is packaged and

(

a) if the product is intended for the duty-paid market, it is stamped; or

(

b) if the product is not intended for the duty-paid market, all tobacco markings that are required under this Act to be printed on or affixed to its container are so printed or affixed.

Exception

(2) Subsection (1) does not apply to a tobacco licensee who removes from their premises

(

a) raw leaf tobacco for return to a tobacco grower, for delivery to another tobacco licensee or for export; or

(

b) partially manufactured tobacco for delivery to another tobacco licensee or for export.

Prohibition — certain tobacco products for sale, etc.

No person shall purchase or receive for sale a tobacco product

(

a) from a manufacturer who the person knows, or ought to know, is not a tobacco licensee;

(

b) that is required under this Act to be packaged and stamped unless it is so packaged and stamped; or

(

c) that the person knows, or ought to know, is fraudulently stamped.

Selling, etc., unstamped raw leaf tobacco

(1) No person shall dispose of, sell, offer for sale, purchase or have in their possession raw leaf tobacco unless the tobacco is packaged and stamped.

Exception

(2) Subsection (1) does not apply to

(

a) a person who is a tobacco licensee;

(

b) the possession of raw leaf tobacco

(

i) in a customs bonded warehouse or a sufferance warehouse by the licensee of that warehouse, or

(ii)

by a body established under provincial law for the marketing of raw leaf tobacco grown in the province; or

(

c) the sale, offer for sale or purchase of raw leaf tobacco by a licensed tobacco dealer.

Exceptions to sections 26 and 30

A tobacco grower does not contravene

section 26 or 30 by reason only that the grower deals in or has in their possession raw leaf tobacco

(

a) grown by the grower on their property for sale to a tobacco licensee or a licensed tobacco dealer or for other disposition to a tobacco licensee, if the tobacco is either on the grower’s property or is being transported by the grower

(

i) in connection with the curing of the tobacco,

(ii)

for delivery to or return from a tobacco licensee, or

(iii)

for delivery to or return from a body established under provincial law for the marketing of raw leaf tobacco grown in the province;

(

b) grown by any other person, if the grower operates a tobacco drying kiln on the grower’s property and the grower’s possession is solely for the purpose of curing the tobacco and returning it to the other person immediately after completion of the curing process or exporting it in accordance with paragraph ( c ); or

(

c) that is to be exported, if the grower has the written approval of the Minister and complies with any conditions that the Minister considers appropriate.

Unlawful possession or sale of tobacco products

(1) No person shall sell, offer for sale or have in their possession a tobacco product unless it is stamped.

Exceptions — possession

(2) Subsection (1) does not apply to the possession of a tobacco product by

(

a) a tobacco licensee at the place of manufacture of the product or at the excise warehouse of the licensee;

(

b) in the case of cigars or imported manufactured tobacco, an excise warehouse licensee at the excise warehouse of the licensee;

(

c) a special excise warehouse licensee at the special excise warehouse of the licensee, if the tobacco product is one that the licensee is permitted under this Act to distribute;

(

d) a prescribed person who is transporting the product under prescribed circumstances and conditions;

(

e) in the case of an imported tobacco product, a customs bonded warehouse licensee or a sufferance warehouse licensee in their warehouse;

(

f) in the case of cigars, a duty free shop licensee in their duty free shop;

(

g) in the case of imported manufactured tobacco, a duty free shop licensee in their duty free shop if the licensee holds a licence issued under

section 22;

(

h) an accredited representative for their personal or official use;

(

i) in the case of cigars or imported manufactured tobacco, a person as ships’ stores if the acquisition and possession of the product by that person are in accordance with the Ships’ Stores Regulations ;

(

j) an individual who has imported the product for their personal use in quantities not in excess of prescribed limits; or

(

k) an individual who has manufactured the product in accordance with subsection 25(3).

Exceptions — sale or offer for sale

(3) Subsection (1) does not apply where

(

a) a tobacco licensee sells or offers to sell a tobacco product that is exported by the licensee in accordance with this Act;

(

b) a tobacco licensee sells or offers to sell

(

i) a tobacco product to a special excise warehouse licensee, if the product is one that the special excise warehouse licensee is permitted under this Act to distribute,

(ii)

a tobacco product to an accredited representative for their personal or official use,

(iii)

cigars to an excise warehouse licensee for delivery as ships’ stores in accordance with the Ships’ Stores Regulations ,

(iv)

cigars to a duty free shop for sale or offer for sale in accordance with the Customs Act , or

(

v) cigars as ships’ stores in accordance with the Ships’ Stores Regulations ;

(

c) a special excise warehouse licensee sells or offers to sell a tobacco product to an accredited representative for their personal or official use, if the product is one that the licensee is permitted under this Act to distribute;

(

d) an excise warehouse licensee sells or offers to sell

(

i) an imported tobacco product that is exported by the licensee in accordance with this Act,

(ii)

an imported tobacco product to an accredited representative for their personal or official use or to a duty free shop, or

(iii)

cigars or imported manufactured tobacco as ships’ stores in accordance with the Ships’ Stores Regulations ;

(

e) a duty free shop licensee sells or offers to sell cigars in accordance with the Customs Act ;

(

f) a duty free shop licensee who holds a licence issued under

section 22 sells or offers to sell imported manufactured tobacco in accordance with the Customs Act ;

(

g) a customs bonded warehouse licensee sells or offers to sell an imported tobacco product that is exported by the licensee in accordance with this Act;

(

h) a customs bonded warehouse licensee sells or offers to sell an imported tobacco product

(

i) to an accredited representative for their personal or official use,

(ii)

to a duty free shop for sale or offer for sale in accordance with the Customs Act , or

(iii)

as ships’ stores in accordance with the Ships’ Stores Regulations ; and

(

i) a person sells or offers for sale cigars or imported manufactured tobacco as ships’ stores in accordance with the Ships’ Stores Regulations .

No sale or distribution except in original package

No person shall

(

a) sell or offer for sale cigars otherwise than in or from the original package;

(

b) sell or offer for sale manufactured tobacco otherwise than in the original package; or

(

c) distribute free of charge for advertising purposes any tobacco product otherwise than in or from the original package.

Packaging and stamping of tobacco

A tobacco licensee who manufactures a tobacco product shall not enter the tobacco product into the duty-paid market unless

(

a) the product has been packaged by the licensee;

(

b) the package has printed on it prescribed information; and

(

c) the product is stamped at the time of packaging.

Packaging and stamping of imported tobacco

(1) If a tobacco product or raw leaf tobacco is imported, it must, before it is released under the Customs Act for entry into the duty-paid market,

(

a) be packaged in a package that has printed on it prescribed information; and

(

b) be stamped.

Exception for certain importations

(2) Subsection (1) does not apply to

(

a) partially manufactured tobacco that is imported by a tobacco licensee for further manufacturing by the licensee;

(

b) a tobacco product that a tobacco licensee is authorized to import under subsection 41(2);

(

c) a tobacco product that is imported by an individual for their personal use in quantities not in excess of prescribed limits; or

(

d) raw leaf tobacco that is imported by a tobacco licensee.

Absence of stamping — notice

The absence of stamping on a tobacco product is notice to all persons that duty has not been paid on the product.

Unstamped products to be warehoused

If a tobacco product manufactured in Canada is not stamped by a tobacco licensee, the tobacco licensee shall immediately enter the product into the licensee’s excise warehouse.

No warehousing of tobacco without markings

(1) No person shall enter into an excise warehouse a container of tobacco products unless the container has printed on it or affixed to it tobacco markings and other prescribed information.

No delivery of imported tobacco without markings

(2) No person shall deliver a container of imported tobacco products that does not have printed on it or affixed to it tobacco markings and other prescribed information to

(

a) a duty free shop for sale or offer for sale in accordance with the Customs Act ;

(

b) an accredited representative; or

(

c) a customs bonded warehouse.

Exception for prescribed tobacco product

(3) Subsections (1) and (2) do not apply to a tobacco product of a brand if the brand is not commonly sold in Canada and is prescribed.

Exception for prescribed cigarettes

(4) Subsection (1) does not apply to 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 prescribed cigarettes; and

(

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

Distinguishing different cigarettes

(5) For the purpose of subsection (4), 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.

Non-compliant imports

If an imported tobacco product or imported raw leaf tobacco intended for the duty-paid market is not stamped when it is reported under the Customs Act , it shall be placed in a sufferance warehouse for the purpose of being stamped.

Removal of raw leaf tobacco or waste tobacco

(1) No person other than a tobacco licensee shall remove raw leaf tobacco or tobacco that is waste from the premises of the licensee.

Removal requirements

(2) If raw leaf tobacco or tobacco that is waste is removed from the premises of a tobacco licensee, the licensee shall deal with the tobacco in the manner authorized by the Minister.

Re-working or destruction of tobacco

(1) A tobacco licensee may re-work or destroy a tobacco product in the manner authorized by the Minister.

Importation for re-working or destruction

(2) The Minister may authorize a tobacco licensee to import any tobacco product manufactured in Canada by the licensee for re-working or destruction by the licensee in accordance with subsection (1).

Duty on Tobacco

Imposition

(1) Duty is imposed on tobacco products manufactured in Canada or imported and on imported raw leaf tobacco at the rates set out in

Schedule 1 and is payable

(

a) in the case of tobacco products manufactured in Canada, by the tobacco licensee who manufactured the tobacco products, at the time they are packaged; and

(

b) in the case of imported tobacco products or raw leaf tobacco, by the importer, owner or other person who is liable under the Customs Act to pay duty levied under

section 20 of the Customs Tariff or who would be liable to pay that duty on the tobacco or products if they were subject to that duty.

Imported partially manufactured tobacco

(2) The following rules apply to partially manufactured tobacco that is imported by a tobacco licensee for further manufacture:

(

a) for the purposes of this Act, the tobacco is deemed to be manufactured in Canada by the licensee; and

( b )

paragraph (1)(

a) applies to the tobacco and paragraph (1)(

b) and

section 44 do not apply.

Additional duty on cigars

In addition to the duty imposed under

section 42, duty is imposed on cigars at the rates set out in

Schedule 2 and is payable

(

a) in the case of cigars manufactured and sold in Canada, by the tobacco licensee who manufactured the cigars, at the time of their delivery to a purchaser; and

(

b) in the case of imported cigars, by the importer, owner or other person who is liable under the Customs Act to pay duty levied under

section 20 of the Customs Tariff or who would be liable to pay that duty on the cigars if they were subject to that duty.

Application of Customs Act

The duties imposed under sections 42 and 43 on imported raw leaf tobacco and tobacco products 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 duties were a duty levied under

section 20 of the Customs Tariff , and, for those purposes, the Customs Act applies with any modifications that the circumstances require.

Duty relieved

(1) The duties imposed under sections 42 and 43 are relieved on a tobacco product that is not stamped.

Tobacco imported by an individual for personal use

(2) Subsection (1) does not apply to the importation of tobacco products by an individual for their personal use to the extent that the quantity of the products imported exceeds the quantity permitted under

Chapter 98 of the List of Tariff Provisions set out in the

schedule to the Customs Tariff to be imported without the payment of duties (as defined in Note 4 to that Chapter).

Duty relieved — raw leaf tobacco

The duty imposed under

section 42 is relieved on raw leaf tobacco that is imported by a tobacco licensee for manufacture by the licensee.

Duty relieved — stamped tobacco imported by individual

The duty imposed under

section 42 is relieved on manufactured tobacco imported by an individual for their personal use if it was manufactured in Canada and is stamped.

Duty relieved — importation for destruction

The duty imposed under paragraph 42(1)(

b) is relieved on stamped manufactured tobacco that was manufactured in Canada by a tobacco licensee and that is imported by the licensee for re-working or destruction in accordance with

section 41.

Excise Warehouses

Restriction — entering tobacco

No person shall enter into an excise warehouse

(

a) a tobacco product that is stamped; or

(

b) any other tobacco product except in accordance with this Act.

Definitions

(1) The

definitions in this subsection apply in this section.

Canadian manufactured tobacco

tabac fabriqué canadien

Canadian manufactured tobacco means manufactured tobacco that is manufactured in Canada but does not include partially manufactured tobacco or foreign brand tobacco.

foreign brand tobacco

tabac de marque étrangère

foreign brand tobacco means manufactured tobacco in respect of which the special duty imposed under

section 56 is relieved because of

section 58.

Categories of Canadian manufactured tobacco

(2) For the purposes of subsection (5), each of the following constitutes a category of Canadian manufactured tobacco:

(

a) cigarettes;

(

b) tobacco sticks; and

(

c) manufactured tobacco other than cigarettes and tobacco sticks.

Prohibition on removal

(3) No person shall remove from an excise warehouse or a special excise warehouse a tobacco product manufactured in Canada.

Exception for Canadian manufactured tobacco

(4) Subject to the regulations, Canadian manufactured tobacco may be removed from the excise warehouse of the tobacco licensee who manufactured it only if it is

(

a) for export by the licensee in accordance with subsection (5) and not for delivery to a foreign duty free shop or as foreign ships’ stores;

(

b) for delivery to the special excise warehouse of a special excise warehouse licensee, if the special excise warehouse licensee is permitted under this Act to distribute the Canadian manufactured tobacco; or

(

c) for delivery to an accredited representative for their personal or official use.

Maximum quantity permitted to be exported from excise warehouse

(5) A tobacco licensee shall not, at a particular time in a calendar year, remove a particular quantity of a category of Canadian manufactured tobacco from the licensee’s excise warehouse for export if the total quantity of that category removed in the year up to that time by the licensee from the warehouse for export, plus the particular quantity, exceeds 1.5% of the total quantity of that category manufactured by the licensee in the preceding calendar year.

Quantities to be excluded for the purposes of subsection (5)

(6) In subsection (5), the total quantity of a category of Canadian manufactured tobacco manufactured by a licensee in the preceding calendar year does not include any quantity of that category that was exported by the licensee for delivery to a foreign duty free shop or as foreign ships’ stores.

Exception for cigars

(7) Subject to the regulations, cigars manufactured in Canada may be removed from the excise warehouse of the tobacco licensee who manufactured them only if they are

(

a) for export by the licensee in accordance with this Act;

(

b) for delivery to the special excise warehouse of a special excise warehouse licensee, if the special excise warehouse licensee is permitted under this Act to distribute the cigars;

(

c) for delivery to an accredited representative for their personal or official use;

(

d) for delivery as ships’ stores in accordance with the Ships’ Stores Regulations ;

(

e) for delivery to another excise warehouse, if the excise warehouse licensee of the other excise warehouse certifies in the prescribed form to the tobacco licensee that the cigars are for delivery as ships’ stores in accordance with the Ships’ Stores Regulations ; or

(

f) for delivery to a duty free shop for sale or offer for sale in accordance with the Customs Act .

Exception for partially manufactured tobacco or foreign brand tobacco

(8) Subject to the regulations, partially manufactured tobacco or foreign brand tobacco may be removed from the excise warehouse of the tobacco licensee who manufactured it only if it is exported by the licensee and not for delivery to a foreign duty free shop or as foreign ships’ stores.

Removal from warehouse — ships’ stores

(9) Subject to the regulations, cigars manufactured in Canada may be removed from an excise warehouse referred to in paragraph (7)(

e) for delivery as ships’ stores in accordance with the Ships’ Stores Regulations .

Removal from warehouse for reworking or destruction

(10) Subject to the regulations, tobacco products manufactured in Canada may be removed from the excise warehouse of the tobacco licensee who manufactured them if they are removed for reworking or destruction by the licensee in accordance with

section 41.

Removal from special excise warehouse — accredited representatives

(11) Subject to the regulations, Canadian manufactured tobacco and cigars may be removed from a special excise warehouse for delivery to an accredited representative for their personal or official use if the special excise warehouse licensee is permitted under this Act to distribute the tobacco or cigars.

Removal of imported tobacco product

(1) No person shall remove an imported tobacco product from an excise warehouse.

Exception

(2) Subject to the regulations, an imported tobacco product may be removed from an excise warehouse

(

a) for delivery to another excise warehouse;

(

b) for delivery to an accredited representative for their personal or official use;

(

c) for delivery as ships’ stores, in accordance with the Ships’ Stores Regulations ;

(

d) for delivery to a duty free shop for sale or offer for sale in accordance with the Customs Act ; or

(

e) for export in accordance with this Act by the excise warehouse licensee.

Restriction — special excise warehouse

No special excise warehouse licensee shall store a tobacco product that is manufactured in Canada in their special excise warehouse for any purpose other than its sale and distribution to an accredited representative for the personal or official use of the representative.

Special Duties on Tobacco Products

Special duty on imported manufactured tobacco delivered to duty free shop

(1) A special duty is imposed on imported manufactured tobacco that is delivered to a duty free shop at the rates set out in

section 1 of

Schedule 3.

When and by whom duty is payable

(2) The special duty is payable at the time of delivery and is payable by the duty free shop licensee.

Meaning of traveller’s tobacco

(1) In this section, traveller’s tobacco means manufactured tobacco that is imported by a person at any time and

(

a) is classified under tariff item No. 9804.10.00, 9804.20.00, 9805.00.00 or 9807.00.00 in the List of Tariff Provisions set out in the

schedule to the Customs Tariff ; or

(

b) would be classified under tariff item No. 9804.10.00 or 9804.20.00 in that List but for the fact that the total value for duty as determined under

section 46 of the Customs Act of all goods imported by the person at that time exceeds the maximum value specified in that tariff item.

Special duty on traveller’s tobacco

(2) A special duty is imposed on traveller’s tobacco at the time it is imported at the rates set out in

section 2 of

Schedule 3.

When and how duty is payable

(3) The special duty 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 special duty were a duty levied under

section 20 of the Customs Tariff , and for those purposes, the Customs Act applies with any modifications that the circumstances require.

Exception

(4) The special duty is not imposed on traveller’s tobacco imported by an individual for their personal use if it was manufactured in Canada and is stamped.

Definition of tobacco product

In sections 56 to 58, tobacco product means manufactured tobacco other than partially manufactured tobacco.

Imposition

(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.

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.

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

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.

Duty relieved — prescribed tobacco product

(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 prescribed;

(

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 trade mark 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.

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 prescribed; and

(

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

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 4

ALCOHOL

General

Application — Importation of Intoxicating Liquors Act

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.

Prohibition — production and packaging of spirits

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

Exception

(2) Subsection (1) does not apply to the packaging of spirits from a marked special container by a purchaser at a bottle-your-own premises.

Prohibition — possession of still

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; or

(

b) has a pending application for a spirits licence.

Prohibition — production and packaging of wine

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

Exception

(2) Subsection (1) does not apply to

(

a) the production of wine by an individual for their personal use;

(

b) the packaging of wine referred to in paragraph (

a) by an individual for their personal use; or

(

c) the packaging of wine from a marked special container by a purchaser at a bottle-your-own premises.

Prohibition — sale of wine produced for personal use

No person shall sell or put to a commercial use wine that was produced, or produced and packaged, by an individual for their personal use.

Wine produced by individual

For the purposes of this Act, wine is not produced or packaged by an individual if it has been produced or packaged by a person acting on their behalf.

Prohibition — ferment-on-premises facility

No person shall carry on at a ferment-on-premises facility any activity specified in a licence or registration issued under this Act other than an activity specified in a ferment-on-premises registration.

Application — in-transit and transhipped alcohol

Sections 67 to 72, 74, 76, 80, 85, 88, 97 to 100 and 102 do not apply to imported alcohol or specially denatured alcohol that is, in accordance with the Customs Act , the Customs Tariff and the regulations made under those Acts,

(

a) transported by a customs bonded carrier from a place outside Canada to another place outside Canada;

(

b) stored in a customs bonded warehouse or sufferance warehouse for subsequent delivery to a place outside Canada; or

(

c) transported by a customs bonded carrier

(

i) from a place outside Canada to a customs bonded warehouse or a sufferance warehouse for subsequent delivery to a place outside Canada, or

(ii)

from a customs bonded warehouse or a sufferance warehouse to a place outside Canada.

Prohibition — sale of alcohol

No person shall sell

(

a) bulk alcohol unless it was produced or imported in accordance with this Act;

(

b) packaged alcohol unless it was, in accordance with this Act,

(

i) produced and packaged in Canada,

(ii)

imported and packaged in Canada, or

(iii)

imported; or

(

c) a marked special container of alcohol unless it was marked in accordance with this Act.

Availability and sampling of imported DA and SDA

(1) Any person who imports a product that is reported under the Customs Act as being denatured alcohol or specially denatured alcohol shall make the product available for sampling and the product is required to be sampled by the Minister before it is released under that Act.

Testing

(2) The samples must be tested to verify that the product is denatured alcohol or specially denatured alcohol.

Minister may waive

(3) The Minister may at any time waive the requirement to sample an imported product under subsection (1).

Fees

(4) The Minister may fix fees to be paid by the importer of the product but those fees must not exceed an amount determined by the Minister to be the costs to Her Majesty in respect of the sampling and testing.

Bulk Alcohol

Prohibition — ownership of bulk alcohol

No person shall own bulk alcohol unless it was produced or imported in accordance with this Act.

Prohibition — possession

(1) No person shall possess bulk alcohol.

Exception

(2) Subsection (1) does not apply

(

a) to a spirits licensee or a licensed user who possesses bulk spirits that were produced or imported by a spirits licensee;

(

b) to a wine licensee or a licensed user who possesses bulk wine that was produced or imported by a wine licensee;

(

c) to a licensed user who possesses bulk alcohol that was imported by the licensed user;

(

d) to an alcohol registrant who possesses, for the purposes of storage or transportation, bulk alcohol that was produced by an alcohol licensee or imported by an alcohol licensee or licensed user;

(

e) to a sufferance warehouse licensee who possesses in their sufferance warehouse bulk alcohol that was imported by a person permitted to do so under this Act;

(

f) to a ferment-on-premises registrant who possesses bulk wine that was produced at the registrant’s ferment-on-premises facility by an individual for the individual’s personal use; or

(

g) to an individual who possesses less than 500 L of bulk wine that was lawfully produced at a residence or a ferment-on-premises facility for an individual’s personal use.

Prohibition — supply of spirits

No person shall give possession of bulk spirits to a person other than a spirits licensee, a licensed user or an alcohol registrant.

Prohibition — supply of wine

(1) No person shall give possession of bulk wine to a person other than a wine licensee, a licensed user or an alcohol registrant.

Exception

(2) Subsection (1) does not apply to an individual who, in connection with their personal use of it, gives possession of bulk wine lawfully produced by an individual for their personal use.

Restriction — licensed user

A licensed user shall not use or dispose of bulk alcohol other than to

(

a) use it in an approved formulation;

(

b) use it in a process in which the absolute ethyl alcohol is destroyed to the extent approved by the Minister;

(

c) use it to produce vinegar;

(

d) use it in accordance with

section 130 or 131;

(

e) return it to

(

i) in the case of alcohol returned in circumstances to which paragraph 105(1)(

a) or 114(1)(

a) applies, a licensee referred to in that paragraph, or

(ii)

in any other case, the alcohol licensee who supplied it;

(

f) subject to

section 76, export it;

(

g) use it for analysis in a manner approved by the Minister; or

(

h) destroy it in a manner approved by the Minister.

Importation — bulk spirits

(1) No person shall import bulk spirits other than a spirits licensee, a licensed user or, if the spirits are in a special container, an excise warehouse licensee in accordance with

section 80.

Importation — bulk wine

(2) No person shall import bulk wine other than a wine licensee, a licensed user or, if the wine is in a special container, an excise warehouse licensee in accordance with

section 85.

Importations involving a provincial authority

If bulk 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, to have been imported by the person who would have been the importer in the absence of that subsection and not by Her Majesty in right of a province or a liquor authority.

Unauthorized export

No person shall export bulk alcohol other than

(

a) the alcohol licensee who is responsible for the alcohol;

(

b) the licensed user who imported the alcohol; or

(

c) a person required to do so under

section 101.

Special Containers of Spirits

Marked container deemed packaged

If a special container of spirits is marked, the spirits are deemed to be packaged at the time the container is marked.

Marking

(1) No person shall mark a special container of spirits unless

(

a) the person is a spirits licensee; or

(

b) the container is one that has been placed in a sufferance warehouse in accordance with

section 80 and the person marks the container in the circumstances described in that section.

Container to be warehoused

(2) If a spirits licensee marks a special container of spirits, the licensee shall immediately enter it into an excise warehouse.

Importation

No person, other than an excise warehouse licensee, shall import a marked special container of spirits.

Marking of imported container

If a special container of spirits that is imported by an excise warehouse licensee is not marked when it is reported under the Customs Act , it shall be placed in a sufferance warehouse for the purpose of being marked.

Imported container to be warehoused

If a marked special container of spirits is released under the Customs Act , the excise warehouse licensee who imported it shall immediately enter it into their excise warehouse.

Special Containers of Wine

Marked container deemed packaged

If a special container of wine is marked, the wine is deemed to be packaged at the time the container is marked.

Marking

(1) No person shall mark a special container of wine unless

(

a) the person is a wine licensee; or

(

b) the container is one that has been placed in a sufferance warehouse in accordance with

section 85 and the person marks the container in the circumstances described in that section.

Container to be warehoused

(2) If a wine licensee marks a special container of wine, the licensee shall immediately enter it into an excise warehouse.

Importation

No person, other than an excise warehouse licensee, shall import a marked special container of wine.

Marking of imported container

If a special container of wine that is imported by an excise warehouse licensee is not marked when it is reported under the Customs Act , it shall be placed in a sufferance warehouse for the purpose of being marked.

Imported container to be warehoused

If a marked special container of wine is released under the Customs Act , the excise warehouse licensee who imported it shall immediately enter it into their excise warehouse.

Packaged Alcohol

Information on container

Every alcohol licensee who packages alcohol shall cause all prescribed information to be displayed on the container containing the alcohol and on any packaging encasing the container

(

a) in the case of wine that is entered into an excise warehouse immediately after it is packaged, before the wine is removed from the warehouse; and

(

b) in any other case, immediately after the alcohol is packaged.

Prohibition — possession

(1) No person shall possess non-duty-paid packaged alcohol.

Exception

(2) Non-duty-paid packaged alcohol, other than alcohol in a marked special container,

(

a) that is packaged by an alcohol licensee or imported by an excise warehouse licensee may be possessed by

(

i) an excise warehouse licensee in their excise warehouse,

(ii)

a licensed user in their specified premises,

(iii)

a registered user for use in accordance with their registration,

(iv)

a prescribed person who is transporting the alcohol under prescribed circumstances and conditions,

(

v) a duty free shop licensee, in their duty free shop,

(vi)

an accredited representative, for their personal or official use, or

(vii)

a person as ships’ stores, if the acquisition and possession of the alcohol by that person are in accordance with the Ships’ Stores Regulations ;

(

b) that is imported may be possessed by a sufferance warehouse licensee, in their sufferance warehouse;

(

c) that is imported by a licensed user may be possessed by

(

i) the licensed user in their specified premises, or

(ii)

a prescribed person who is transporting the alcohol under prescribed circumstances and conditions;

(

d) that is imported by an accredited representative may be possessed by

(

i) the accredited representative, for their personal or official use, or

(ii)

a prescribed person who is transporting the alcohol under prescribed circumstances and conditions;

(

e) that is imported for sale in a duty free shop, for sale to an accredited representative or for use as ships’ stores, may be possessed by

(

i) a customs bonded warehouse licensee, in their customs bonded warehouse,

(ii)

a duty free shop licensee, in their duty free shop,

(iii)

an accredited representative, for their personal or official use,

(iv)

a customs bonded carrier in accordance with the Customs Act , or

(

v) a person as ships’ stores, if the acquisition and possession of the alcohol by that person are in accordance with the Ships’ Stores Regulations ;

(

f) that is imported for supply to an air carrier that is licensed under

section 69 or 73 of the Canada Transportation Act to operate an international air service may be possessed by a customs bonded warehouse licensee, in their customs bonded warehouse;

(

g) that is imported by an individual in accordance with the Customs Act and the Customs Tariff for their personal use may be possessed by an individual; and

(

h) that is wine that is produced and packaged by an individual for their personal use may be possessed by an individual.

Exception — special containers

(3) A non-duty-paid marked special container of alcohol may be possessed by

(

a) an excise warehouse licensee in their excise warehouse;

(

b) a prescribed person who is transporting the alcohol under prescribed circumstances and conditions;

(

c) in the case of an imported special container of alcohol, a sufferance warehouse licensee in their sufferance warehouse; or

(

d) in the case of a special container of spirits that is marked for delivery to and use by a registered user, a registered user for use in accordance with their registration.

Storage

A ferment-on-premises registrant shall not store packaged wine at their ferment-on-premises facility.

Restriction — licensed user

A licensed user shall not use or dispose of non-duty-paid packaged alcohol other than to

(

a) use it in an approved formulation;

(

b) use it in a process in which the absolute ethyl alcohol is destroyed to the extent approved by the Minister;

(

c) use it to produce vinegar;

(

d) return it under prescribed conditions to the excise warehouse licensee who supplied it;

(

e) export it, if the alcohol was imported by the licensed user;

(

f) use it for analysis in a manner approved by the Minister; or

(

g) destroy it in a manner approved by the Minister.

Restriction — registered user

A registered user shall not use or dispose of non-duty-paid packaged spirits other than to

(

a) use them in accordance with their registration;

(

b) use them for analysis in a manner approved by the Minister;

(

c) return them under prescribed conditions to the excise warehouse licensee who supplied them; or

(

d) destroy them in a manner approved by the Minister.

Unauthorized removal — spirits

(1) No person shall remove spirits from a marked special container of spirits other than

(

a) a registered user, in the case of a container that is marked for delivery to and use by a registered user; and

(

b) a purchaser of the spirits at a bottle-your-own premises, in the case of a container that is marked for delivery to and use at a bottle-your-own premises.

Removal of spirits from returned container

(2) If the operator of a bottle-your-own premises returns a marked special container of spirits to the excise warehouse licensee who supplied the container to the operator, the licensee may remove the spirits from the container for the purpose of destroying the spirits in a manner approved by the Minister.

Unauthorized removal — wine

(1) No person shall remove wine from a marked special container of wine other than a purchaser of the wine at a bottle-your-own premises.

Removal of wine from returned container

(2) If the operator of a bottle-your-own premises returns a marked special container of wine to the excise warehouse licensee who supplied the container to the operator, the licensee may remove the wine from the container for the purpose of destroying the wine in a manner approved by the Minister.

Denatured Alcohol and Specially Denatured Alcohol

Prohibition — denaturing of spirits

No person, other than a spirits licensee, shall denature spirits.

Prohibition — sale as beverage

(1) No person shall sell or provide denatured alcohol or specially denatured alcohol for use in or as a beverage.

Prohibition — use as beverage

(2) No person shall use denatured alcohol or specially denatured alcohol in or as a beverage.

Prohibition — use of SDA

No person shall, except in accordance with a specially denatured alcohol registration issued to the person, use specially denatured alcohol.

Prohibition — possession of SDA

(1) No person shall possess specially denatured alcohol.

Exception

(2) Subsection (1) does not apply to

(

a) a spirits licensee or an SDA registrant who possesses specially denatured alcohol produced by a spirits licensee;

(

b) a spirits licensee, an SDA registrant or a sufferance warehouse licensee who possesses specially denatured alcohol imported by a spirits licensee;

(

c) an SDA registrant who possesses specially denatured alcohol that they imported;

(

d) a sufferance warehouse licensee who possesses specially denatured alcohol imported by an SDA registrant; or

(

e) an alcohol registrant who possesses specially denatured alcohol only for the purposes of its storage and transportation, if the alcohol was produced by a spirits licensee or imported by a spirits licensee or an SDA registrant.

Prohibition — supply of SDA

No person shall give possession of specially denatured alcohol to a person who is not a spirits licensee, an SDA registrant or an alcohol registrant.

Prohibition — sale of SDA

(1) No person shall sell specially denatured alcohol.

Exceptions

(2) Subsection (1) does not apply where

(

a) a spirits licensee sells specially denatured alcohol to another spirits licensee or to an SDA registrant; or

(

b) an SDA registrant returns specially denatured alcohol in accordance with paragraph 103(

a) or exports it in accordance with paragraph 103( b ).

Prohibition — importing of SDA

No person shall import specially denatured alcohol other than a spirits licensee or an SDA registrant.

Spirits mistakenly imported as DA or SDA

(1) If a person, other than a spirits licensee or licensed user, who has imported a product that was reported under the Customs Act as being denatured alcohol or specially denatured alcohol learns that the product is spirits and not denatured alcohol or specially denatured alcohol, the person shall without delay

(

a) export it for return to the person from whom it was acquired; or

(

b) dispose of or destroy it in the manner specified by the Minister.

Spirits mistakenly possessed as DA or SDA

(2) If a person, other than a spirits licensee, licensed user or alcohol registrant, who possesses a product that the person believed was denatured alcohol or specially denatured alcohol learns that the product is spirits and not denatured alcohol or specially denatured alcohol, the person shall without delay

(

a) return it to the spirits licensee who produced or supplied the product; or

(

b) dispose of or destroy it in the manner specified by the Minister.

If product used

(3) If the person is unable to comply with subsection (1) or (2) in respect of an amount of the product because they had already used it in the production of another product before they learned that the product was not denatured alcohol or specially denatured alcohol, the person shall

(

a) dispose of or destroy the other product in the manner specified by the Minister; and

(

b) pay any penalty imposed under

section 254 for which they are liable under

section 244 in respect of the amount.

Exception

(4) Subsection (3) does not apply if

(

a) the other product is not, in the opinion of the Minister, spirits;

(

b) the Minister deems the other product to have been produced using denatured alcohol or specially denatured alcohol, as the case may be; and

(

c) the person complies with any conditions imposed by the Minister.

Prohibition — exporting of SDA

No person shall export specially denatured alcohol other than the SDA registrant who imported it or a spirits licensee.

Restriction on disposal

An SDA registrant shall not dispose of specially denatured alcohol other than to

(

a) return it to the spirits licensee who supplied it;

(

b) export it, if it was imported by the SDA registrant; or

(

c) destroy it in a manner approved by the Minister.

Responsibility for Bulk Spirits

Responsibility

Subject to sections 105 to 107, 111 and 112, the person who is responsible for bulk spirits at any time is

(

a) the spirits licensee or licensed user who owns the spirits at that time;

(

b) if the spirits are not owned at that time by a spirits licensee or licensed user, the spirits licensee or licensed user who last owned them; or

(

c) if the spirits were never owned by a spirits licensee or licensed user, the spirits licensee who imported or produced them or the licensed user who imported them.

Return of spirits purchased from unlicensed person

(1) This

section applies if a spirits licensee or licensed user (in this

section referred to as the “purchaser”) purchases bulk spirits from a person who is not a spirits licensee or licensed user (in this

section referred to as the “unlicensed person”), and, within 30 days after the purchaser receives the spirits,

(

a) the purchaser returns the spirits to the spirits licensee who was responsible for them immediately before they were purchased by the purchaser (in this

section referred to as the “previously responsible licensee”) or to the spirits licensee who supplied them (in this

section referred to as the “supplier”); and

(

b) the ownership of the spirits reverts to the unlicensed person.

Determination of person responsible for returned spirits

(2) At the later of the time at which the previously responsible licensee or supplier receives the spirits and the time at which the ownership of the spirits reverts to the unlicensed person,

(

a) the previously responsible licensee becomes again responsible for the spirits; and

(

b) the purchaser of the spirits ceases to be responsible for them.

Exception — provincial ownership

If, at any time, the government of a province or a liquor authority that is a spirits licensee or a licensed user owns bulk spirits for a purpose not related to its licence,

section 104 applies as though that ownership by the government or the liquor authority did not exist at that time.

Spirits imported by licensed user

A licensed user who imports bulk spirits is responsible for them.

Blended spirits — joint and several or solidary responsibility

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

Responsibility for wine ceases

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

Person not responsible

A person who is responsible for bulk spirits ceases to be responsible for them if they are

(

a) taken for use and the duty on them 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) denatured into denatured alcohol or specially denatured alcohol;

(

e) exported in accordance with this Act; or

(

f) lost in prescribed circumstances, if the person fulfills any prescribed conditions.

Notification of change of ownership

If a spirits licensee or licensed user (in this

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

(

a) at the time of the purchase, obtain from the vendor the name and address of the spirits licensee who is responsible for the spirits immediately before they are sold to the purchaser; and

(

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

Removal of special container

If an unmarked special container of spirits is removed by a spirits licensee from their excise warehouse in accordance with

section 156, the licensee is responsible for the spirits unless they are owned by another spirits licensee or a licensed user, in which case the other spirits licensee or the licensed user is responsible for them.

Removal of spirits

If spirits are removed by a spirits licensee from their excise warehouse in accordance with

section 158, the licensee is responsible for the spirits unless they are owned by another spirits licensee or a licensed user, in which case the other spirits licensee or the licensed user is responsible for them.

Responsibility for Bulk Wine

Responsibility

Subject to sections 114 to 116, 120 and 121, the person who is responsible for bulk wine at any time is

(

a) the wine licensee or licensed user who owns the wine at that time;

(

b) if the wine is not owned at that time by a wine licensee or licensed user, the wine licensee or licensed user who last owned it; or

(

c) if the wine was never owned by a wine licensee or licensed user, the wine licensee who imported or produced it or the licensed user who imported it.

Return of wine purchased from unlicensed person

(1) This

section applies 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 (in this

section referred to as the “unlicensed person”), and, within 30 days after the purchaser receives the wine,

(

a) the purchaser returns the wine to the wine licensee who was responsible for it immediately before it was purchased by the purchaser (in this

section referred to as the “previously responsible licensee”) or to the wine licensee who supplied it (in this

section referred to as the “supplier”); and

(

b) the ownership of the wine reverts to the unlicensed person.

Determination of person responsible for returned wine

(2) At the later of the time at which the previously responsible licensee or supplier receives the wine and the time at which the ownership of the wine reverts to the unlicensed person,

(

a) the previously responsible licensee becomes again responsible for the wine; and

(

b) the purchaser of the wine ceases to be responsible for it.

Exception — provincial ownership

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.

Wine imported by licensed user

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

Blended wine — joint and several or solidary responsibility

(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.

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.

Person not responsible

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.

Notification of change of ownership

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.

Removal of special container

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.

Removal of wine

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

Imposition — domestic spirits

(1) Duty is imposed on spirits produced in Canada at the rate set out in

section 1 of

Schedule 4.

Time of imposition

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

Imposition — low alcoholic strength spirits

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.

Duty payable when packaged

(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.

Payable by responsible person

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

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.

Duty payable when removed from warehouse

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.

Duty payable on bulk spirits taken for use

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.

Duty payable on unaccounted bulk spirits

(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.

When duty payable

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

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.

Duty payable on packaged spirits taken for use

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.

Duty payable on unaccounted packaged spirits

(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.

When duty payable

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

Fortifying wine

(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.

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.

Blending wine with spirits

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

Blending deemed to be production of spirits

(2) The resulting spirits are deemed to be produced at the time of the blending and 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.

Duty relieved — DA and SDA

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.

Imposition of special duty

(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.

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.

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.

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.

Imposition — bulk wine taken for use

(1) Duty is imposed on bulk wine that is taken for use at the rates set out in

Schedule 6.

Payable by responsible person

(2) Subject to sections 144 to 146, the duty is payable at the time the wine is taken for use and is payable by the person who is responsible for the wine at that time.

Wine produced for personal use

(3) Subsection (1) does not apply to wine produced by an individual for their personal use and that is consumed in the course of that use.

Imposition — wine packaged in Canada

(1) Duty is imposed on wine that is packaged in Canada at the rates set out in

Schedule 6.

Wine produced for personal use and by small producers

(2) Subsection (1) does not apply to wine that is

(

a) produced and packaged by an individual for their personal use; or

(

b) produced by a wine licensee and packaged by the licensee during a fiscal month of the licensee if the sales by the licensee of products subject to duty under subsection (1), or that would have been so subject to duty in the absence of this subsection, in the 12 fiscal months preceding that fiscal month did not exceed $50,000.

Time of imposition

(3) The duty is imposed at the time the wine is packaged. It is also payable at that time unless the wine is entered into an excise warehouse immediately after packaging.

Payable by responsible person

(4) The duty is payable by the person who is responsible for the wine immediately before it is packaged.

Wine licensee ceases to be liable for duty

(5) If an excise warehouse licensee becomes liable under

section 140 for duty on the wine, the person required under subsection (4) to pay the duty ceases to be liable to pay it.

Duty payable on removal from warehouse

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

Duty payable on packaged wine taken for use

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

Duty payable on unaccounted packaged wine

(1) Duty is payable on non-duty-paid packaged wine that has been received by an excise warehouse licensee or a licensed user but that 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.

When duty payable

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

Duty on wine in marked special container relieved

(1) Duty imposed under subsection 135(1) is relieved on wine that is contained in a marked special container of wine from which the marking has been removed in accordance with

section 156.

Duty on returned wine relieved

(2) Duty imposed under subsection 135(1) or levied under subsection 21.2(2) of the Customs Tariff is relieved on wine that is returned to the bulk wine inventory of a wine licensee in accordance with

section 157.

Liability of Excise Warehouse Licensees and Licensed Users

Non-duty-paid packaged alcohol

If non-duty-paid packaged alcohol is entered into an excise warehouse immediately after being packaged, the excise warehouse licensee is liable for the duty on the alcohol at the time it is entered into the warehouse.

Imported packaged alcohol

If, in accordance with subsection 21.2(3) of the Customs Tariff , imported packaged alcohol is, without the payment of duty, released under the Customs Act to the excise warehouse licensee or licensed user who imported it, the excise warehouse licensee or licensed user is liable for the duty on the alcohol.

Transfer between warehouse licensees

(1) If non-duty-paid packaged alcohol is removed from the excise warehouse of an excise warehouse licensee (in this subsection referred to as the “transferor”) to the excise warehouse of another excise warehouse licensee, at the time the alcohol is entered into the warehouse of the other licensee,

(

a) the other licensee becomes liable for the duty on the alcohol; and

(

b) the transferor ceases to be liable for the duty.

Transfer to licensed user

(2) If non-duty-paid packaged alcohol is removed from an excise warehouse to the specified premises of a licensed user, at the time the alcohol is entered into those premises,

(

a) the licensed user becomes liable for the duty on the alcohol; and

(

b) the excise warehouse licensee ceases to be liable for the duty.

Transfer from licensed user

(3) If non-duty-paid packaged alcohol is removed from the specified premises of a licensed user to an excise warehouse, at the time the alcohol is entered into the warehouse,

(

a) the excise warehouse licensee becomes liable for the duty on the alcohol; and

(

b) the licensed user ceases to be liable for the duty.

Non-dutiable Uses and Removals of Alcohol

Approved formulations

The Minister may impose any conditions or restrictions that the Minister considers necessary in respect of the making, importation, packaging, use or sale of, or other dealing with, an approved formulation.

Non-dutiable uses — approved formulations

Duty is relieved on bulk alcohol and non-duty-paid packaged alcohol used by a licensed user in an approved formulation.

Duty not payable — bulk alcohol

(1) Duty is not payable on bulk alcohol

(

a) taken for analysis by an alcohol licensee or a licensed user in a manner approved by the Minister;

(

b) destroyed by an alcohol licensee or a licensed user in a manner approved by the Minister; or

(

c) used by a licensed user in a process in which the absolute ethyl alcohol is destroyed to the extent approved by the Minister.

Duty not payable — packaged alcohol

(2) Duty is not payable on non-duty-paid packaged alcohol

(

a) taken for analysis by an excise warehouse licensee or a licensed user in a manner approved by the Minister;

(

b) destroyed by an excise warehouse licensee or a licensed user in a manner approved by the Minister; or

(

c) used by a licensed user in a process in which the absolute ethyl alcohol is destroyed to the extent approved by the Minister.

No duty payable — alcohol taken for analysis or destroyed

(3) Duty is not payable on bulk alcohol or non-duty-paid packaged alcohol that is taken for analysis or destroyed by the Minister.

Duty not payable — vinegar

(1) Duty is not payable on alcohol that is used by a licensed user to produce vinegar if not less than 0.5 kg of acetic acid is produced from every litre of absolute ethyl alcohol used.

Deemed taken for use if deficiency

(2) If a licensed user uses alcohol to produce vinegar and less than 0.5 kg of acetic acid is produced from every litre of absolute ethyl alcohol used, the licensed user is deemed to have taken for use, at the time the vinegar is produced, the number of litres of that alcohol that is equivalent to the number determined by the formula

A - (2 ×

B) where A

is the number of litres of absolute ethyl alcohol used, and

is the number of kilograms of acetic acid produced.

Duty not payable — packaged alcohol

(1) Duty is not payable on non-duty-paid packaged alcohol, other than alcohol contained in a marked special container, that is removed from an excise warehouse

(

a) for delivery

(

i) to an accredited representative for their personal or official use,

(ii)

to a duty free shop for sale in accordance with the Customs Act ,

(iii)

to a registered user for use in accordance with their registration, or

(iv)

as ships’ stores in accordance with the Ships’ Stores Regulations ; or

(

b) for export by the excise warehouse licensee in accordance with this Act.

Duty not payable — special container of spirits

(2) Duty is not payable on spirits contained in a marked special container that is removed from an excise warehouse

(

a) for delivery to a registered user for use in accordance with their registration, if the container is marked for delivery to and use by a registered user; or

(

b) for export by the excise warehouse licensee in accordance with this Act, if the container was imported.

Duty not payable — special container of wine

(3) Duty is not payable on wine imported in a marked special container that is removed from an excise warehouse for export by the excise warehouse licensee in accordance with this Act.

Determining Volume of Alcohol

Volume of alcohol

(1) The volume and absolute ethyl alcohol content of alcohol shall be determined in a manner specified by the Minister using approved instruments.

Approval of instrument

(2) The Minister may examine and approve an instrument or a class, type or design of instruments for the measurement of the volume and absolute ethyl alcohol content of alcohol.

Re-examination

(3) The Minister may direct in writing that any instrument previously examined and approved, or of a class, type or design previously examined and approved, by the Minister be submitted to the Minister for re-examination and, if the Minister so directs, the person who has the custody and control of the instrument shall immediately submit it to the Minister for re-examination.

Revocation of approval

(4) After re-examining an instrument, the Minister may, in writing, revoke the Minister’s approval of that instrument or instruments of the same class, type or design as that instrument.

Indicating instrument is approved

(5) Every approved instrument the approval of which has not been revoked shall indicate the approval in a manner acceptable to the Minister.

Excise Warehouses

Restriction — entering into warehouse

No person shall enter non-duty-paid packaged alcohol into an excise warehouse except in accordance with this Act.

Import by warehouse licensee

(1) If imported packaged alcohol is, without the payment of duty, released under the Customs Act to the excise warehouse licensee who imported it, the licensee shall immediately enter it into the excise warehouse of the licensee.

Import by licensed user

(2) If imported packaged alcohol is, without the payment of duty, released under the Customs Act to the licensed user who imported it, the licensed user shall immediately enter it into the specified premises of the licensed user.

Restriction on removal

(1) No person shall remove non-duty-paid packaged alcohol from an excise warehouse.

Exception

(2) Subject to the regulations, a person may remove from an excise warehouse

(

a) non-duty-paid packaged alcohol, other than alcohol in a marked special container, for

(

i) entry into the duty-paid market,

(ii)

delivery to another excise warehouse,

(iii)

delivery to an accredited representative for their personal or official use,

(iv)

delivery as ships’ stores, in accordance with the Ships’ Stores Regulations ,

(

v) delivery to a duty free shop for sale in accordance with the Customs Act to persons who are about to leave Canada,

(vi)

delivery to a licensed user,

(vii)

delivery to a registered user for use in accordance with their registration, or

(viii)

export;

(

b) a non-duty-paid marked special container of wine for

(

i) delivery to another excise warehouse, or

(ii)

entry into the duty-paid market for delivery to a bottle-your-own premises;

(

c) a non-duty-paid marked special container of spirits for

(

i) delivery to another excise warehouse,

(ii)

if the container is marked for delivery to and use by a registered user, delivery to a registered user for use in accordance with their registration, or

(iii)

if the container is marked for delivery to and use at a bottle-your-own premises, entry into the duty-paid market for delivery to a bottle-your-own premises; or

(

d) an imported non-duty-paid marked special container of alcohol, for export.

Return of duty-paid alcohol

If packaged alcohol that has been removed from an excise warehouse for entry into the duty-paid market is returned to that warehouse under prescribed conditions, the alcohol may be entered into the warehouse as non-duty-paid packaged alcohol.

Return of non-duty-paid alcohol

If non-duty-paid packaged alcohol that has been removed from an excise warehouse in accordance with

section 147 is returned to an excise warehouse under prescribed conditions, the alcohol may be entered into the warehouse as non-duty-paid packaged alcohol.

Supplying packaged alcohol to retail store

(1) Subject to subsections (2) and 155(1), an excise warehouse licensee shall not, during a calendar year, supply from a particular premises specified in the excise warehouse licence of the licensee to a retail store more than 30% of the total volume of packaged alcohol supplied from those premises to all retail stores during the year.

Exception for certain retail stores

(2) An excise warehouse licensee who is an alcohol licensee may supply from the particular premises to a retail store of the licensee more than 30% of that total volume if

(

a) the store is located at a place at which the licensee produces or packages alcohol; and

(

b) not less than 90% of the volume of packaged alcohol supplied to the store from the particular premises in the year consists of alcohol that was packaged by, or, if the licensee was responsible for the alcohol immediately before it was packaged, on behalf of, the licensee.

Exception for remote stores

(1) On application in the prescribed form and manner by an excise warehouse licensee who is a liquor authority or a non-retailer of alcohol, the Minister may authorize the licensee to supply during a calendar year from a particular premises specified in their excise warehouse licence to a retail store more than 30% of the total volume of packaged alcohol to be supplied from the premises to all retail stores during the year if the Minister is satisfied that the delivery of packaged alcohol by railway, truck or water vessel to the store is not possible for five consecutive months in every year.

Revocation

(2) The Minister may revoke an authorization under subsection (1) if

(

a) the licensee makes a written request to the Minister to revoke the authorization;

(

b) the licensee fails to comply with any condition imposed in respect of the authorization or any provision of this Act;

(

c) the Minister is no longer satisfied that the requirements of subsection (1) are met; or

(

d) the Minister considers that the authorization is no longer required.

Notice of revocation

(3) If the Minister revokes an authorization of a licensee, the Minister shall notify the licensee in writing of the revocation and its effective date.

Removal of special container

An alcohol licensee who has marked a special container of alcohol may remove the container from their excise warehouse to return it to the bulk alcohol inventory of the licensee if the marking on the container is removed by the licensee in the manner approved by the Minister.

Removal of packaged wine from excise warehouse

A wine licensee may remove non-duty-paid packaged wine from their excise warehouse to return it to the bulk wine inventory of the licensee.

Removal of packaged spirits from excise warehouse

A spirits licensee may remove non-duty-paid packaged spirits from their excise warehouse to return them to the bulk spirits inventory of the licensee.

PART 5

GENERAL PROVISIONS CONCERNING DUTY AND OTHER AMOUNTS PAYABLE

Fiscal Month

Determination of fiscal months

(1) The fiscal months of a person shall be determined in accordance with the following rules:

(

a) if fiscal months of the person have been determined under subsection 243(2) or (4) of the Excise Tax Act for the purposes of

Part IX of that Act, each of those fiscal months is a fiscal month of the person for the purposes of this Act;

(

b) if fiscal months of the person have not been determined under subsection 243(2) or (4) of the Excise Tax Act for the purposes of

Part IX of that Act, the person may select for the purposes of this Act fiscal months that meet the requirements set out in that subsection 243(2); and

(

c) if neither paragraph (

a) nor paragraph (

b) applies, each calendar month is a fiscal month of the person for the purposes of this Act.

Notification of Minister

(2) Every person who is required to file a return shall notify the Minister of their fiscal months in the prescribed form and manner.

Returns and Payment of Duty and Other Amounts

Filing by licensee

(1) Every person who is licensed under this Act shall, not later than the last day of the first month after each fiscal month of the person,

(

a) file a return with the Minister, in the prescribed form and manner, for that fiscal month;

(

b) calculate, in the return, the total amount of the duty payable, if any, by the person for that fiscal month; and

(

c) pay that amount to the Receiver General.

Exception — licensed tobacco dealers

(2) Subsection (1) does not apply to licensed tobacco dealers.

Filing by other persons

Every person who is not licensed under this Act and who is required to pay duty under this Act shall, not later than the last day of the first month after the fiscal month of the person in which the duty became payable,

(

a) file a return with the Minister, in the prescribed form and manner, for that fiscal month;

(

b) calculate, in the return, the total amount of the duty payable by the person for that fiscal month; and

(

c) pay that amount to the Receiver General.

Set-off of refunds

If, at any time, a person files a return in which the person reports an amount that is required to be paid under this Act by them and the person claims a refund payable to them at that time, in the return or in another return, or in a separate application filed under this Act with the return, the person is deemed to have paid at that time, and the Minister is deemed to have refunded at that time, an amount equal to the lesser of the amount required to be paid and the amount of the refund.

Large payments

Every person who is required under this Act to pay any duty, interest or other amount to the Receiver General shall, if the amount is $50,000 or more, make the payment to the account of the Receiver General at

(

a) a bank;

(

b) an authorized foreign bank, as defined in

section 2 of the Bank Act , that is not subject to the restrictions and requirements referred to in subsection 524(2) of that Act;

(

c) a credit union;

(

d) a corporation authorized under the laws of Canada or a province to carry on the business of offering its services as a trustee to the public; or

(

e) a corporation authorized under the laws of Canada or a province to accept deposits from the public and that carries on the business of lending money on the security of real property or immovables or investing in mortgages on real property or hypothecs on immovables.

Authority for separate returns

(1) A licensee who engages in one or more activities in separate branches or divisions may file an application, in the prescribed form and manner, with the Minister for authority to file separate returns and applications for refunds under this Act in respect of a branch or division specified in the application.

Authorization by Minister

(2) On receipt of the application, the Minister may, in writing, authorize the licensee to file separate returns and applications for refunds in relation to the specified branch or division, subject to any conditions that the Minister may at any time impose, if the Minister is satisfied that

(

a) the branch or division can be separately identified by reference to the location of the branch or division or the nature of the activities engaged in by it; and

(

b) separate records, books of account and accounting systems are maintained in respect of the branch or division.

Revocation of authorization

(3) The Minister may revoke an authorization if

(

a) the licensee, in writing, requests the Minister to revoke the authorization;

(

b) the licensee fails to comply with any condition imposed in respect of the authorization or any provision of this Act;

(

c) the Minister is no longer satisfied that the requirements of subsection (2) in respect of the licensee are met; or

(

d) the Minister considers that the authorization is no longer required.

Notice of revocation

(4) If the Minister revokes an authorization, the Minister shall send a notice in writing of the revocation to the licensee and shall specify in the notice the effective date of the revocation.

Small amounts owing

(1) If, at any time, the total of all unpaid amounts owing by a person to the Receiver General under this Act does not exceed a prescribed amount, the amount owing by the person is deemed to be nil.

Small amounts payable

(2) If, at any time, the total of all amounts payable by the Minist