Bill 173, Fuel and Gasoline Tax Amendment Act, 1997

Hodgson, Hon. Chris Chair of the Management Board of Cabinet

Versions

Bill 173 1997

An Act to amend the Fuel Tax Act and the Gasoline Tax Act

Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

FUEL TAX ACT

1. (1) Subsection 1 (1) of the Fuel Tax Act, as amended by the Statutes of Ontario, 1991, chapter 49, section 1, 1994, chapter 18, section 2 and 1996, chapter 10, section 1, is further amended by adding the following definition:

"adjusted temperature method" means the method of measuring the dispensed volume of fuel by adjusting the volume to the volume at a reference temperature of 15 degrees Celsius, by means of a dispensing pump or other metering assembly that is equipped to effect the adjustment in accordance with the specifications established under the Weights and Measures Act (Canada). ("mthode de correction en fonction de la temprature")

(2) The definitions of "clear fuel", "coloured fuel", "colouring" and "colour" in subsection 1 (1) of the Act are repealed and the following substituted:

"clear fuel" means fuel that contains no dye or less dye than the minimum quantity established by the Minister; ("carburant incolore")

"coloured fuel" means fuel which contains dye in a quantity greater than or equal to the amount established by the Minister; ("carburant color")

"colouring" and "colour" mean, in respect of fuel, the addition to the fuel of dye in the proportion established by the Minister by a person authorized to do so by the Minister. ("coloration" et "colorer")

(3) Subsection 1 (1) of the Act is amended by adding the following definition:

"distributor" means a person who is designated by the Minister under this Act to distribute special products. ("distributeur")

(4) The definition of "dye" in subsection 1 (1) of the Act is repealed and the following substituted:

"dye" means chemical substances that are approved by the Minister for the purpose of blending with fuel to make coloured fuel. ("colorant")

(5) Subsection 1 (1) of the Act is amended by adding the following definition:

"facility" means a facility that is owned or operated by a distributor and that meets the requirements set out in the regulations. ("installation")

(6) The definition of "fuel" in subsection 1 (1) of the Act, as re-enacted by the Statutes of Ontario, 1991, chapter 49, section 1, is amended by striking out the portion before clause (a) and substituting the following:

"fuel" means any gas or liquid that may be used for the purpose of generating power by internal combustion, and includes any special product or any substance added to the gas or liquid, but does not include,

. . . . .

(7) The definition of "registered dyer" in subsection 1 (1) of the Act, as enacted by the Statutes of Ontario, 1991, chapter 49, section 1, is repealed and the following substituted:

"registered dyer" means a collector or distributor who holds a certificate of registration under this Act as a dyer. ("prpos la coloration inscrit")

(8) Subsection 1 (1) of the Act is amended by adding the following definition:

"special products" means products prescribed by the Minister as special products. ("produits spciaux")

(9) Subsection 1 (1) of the Act is amended by adding the following definition:

"unadjusted temperature method" means a method of measuring the dispensed volume of fuel that does not adjust the volume to the volume at a reference temperature of 15 degrees Celsius. ("mthode traditionnelle")

2. Section 2 of the Act, as re-enacted by the Statutes of Ontario, 1991, chapter 49, section 2 and amended by 1994, chapter 18, section 2, is further amended by adding the following subsections: Measuring volume and calculating tax

(4.1) The tax imposed by this Act shall be computed in accordance with the following rules:

1. If the volume of fuel is measured by the adjusted temperature method for the purpose of determining price, the volume of the fuel shall be measured using that method for the purpose of computing amounts in respect of the tax imposed by this Act.

2. If the volume of fuel is measured by the unadjusted temperature method for the purpose of determining price, the volume of the fuel shall be measured using that method for the purpose of computing amounts in respect of the tax imposed by this Act.

3. A person who is a collector or wholesaler shall use the same method of measuring the volume of fuel on all sales to the same person during the same year. Exception

(4.2) Despite subsection (4.1), a person who is a collector or wholesaler may change to the other method of measuring the volume of fuel on sales to a particular person,

(a) if a change in method is made only once; and

(b) if the determination of the amount of tax in respect of sales after the change in method is based on volumes measured by the new method.

3. The Act is amended by adding the following section: Designation of distributor

3.0.1 (1) The Minister may designate in writing as a distributor a person who sells only special products. Conditions and limitations

(2) The Minister may attach such conditions and limitations to the designation as the Minister considers appropriate. Termination

(3) The Minister may terminate a person's designation,

(a) if the person has not sold or delivered any special product for which the designation was issued for a period of six consecutive months;

(b) if the person ceases to sell the special product for which the designation was issued;

(d) if the person changes the nature of the person's business or ceases to operate the business of selling special products; or

(e) if the requirements relating to the facility owned or operated by the person are not met. Notice of termination

(4) The termination of a designation is effective 14 days after the date on which the Minister mails notice of the termination. Distributor as agent

(5) Every distributor is an agent of the Minister for the purpose of collecting and remitting the tax imposed by this Act. Agreements

(6) The Minister may enter into such arrangements and agreements with a distributor as the Minister considers appropriate to ensure and facilitate the collection of tax under this Act.

4. Subsection 3.1 (1) of the Act, as enacted by the Statutes of Ontario, 1991, chapter 49, section 3, is amended,

(a) by inserting after "collector" in the first line "or distributor"\; and

(b) by striking out "the collector" in the third line of the English version and substituting "he, she or it".

5. (1) Subsection 3.2 (1) of the Act, as enacted by the Statutes of Ontario, 1991, chapter 49, section 3, and amended by 1994, chapter 18, section 2, is further amended,

(a) by inserting after "collector" in the first line "or distributor"\; and

(b) by striking out "the collector" in the third and fourth lines of the English version and substituting "him, her or it".

(2) Subsection 3.2 (2) of the Act, as enacted by the Statutes of Ontario, 1991, chapter 49, section 3 and amended by 1994, chapter 18, section 2, is further amended,

(a) by inserting after "collector" in the first line "or distributor"\; and

(b) by striking out "the collector" in the fourth line of the English version and substituting "he, she or it".

6. Subsection 3.4 (4) of the Act, as enacted by the Statutes of Ontario, 1991, chapter 49, section 3, is amended by inserting after "collector" in the second line "a distributor".

7. (1) Subsection 3.5 (1) of the Act, as enacted by the Statutes of Ontario, 1991, chapter 49, section 3, is amended by inserting after "collector" in the second and third lines "distributor".

(2) Subsection 3.5 (2) of the Act, as enacted by the Statutes of Ontario, 1991, chapter 49, section 3, is amended by inserting after "a collector" in the second line "a distributor".

8. (1) Subsection 3.6 (1) of the Act, as enacted by the Statutes of Ontario, 1991, chapter 49, section 3, is amended by inserting after "collector" in the last line "distributor".

(2) Subsection 3.6 (2) of the Act, as enacted by the Statutes of Ontario, 1991, chapter 49, section 3 and amended by 1994, chapter 18, section 2, is repealed.

9. The Act is amended by adding the following section: Trust for moneys collected

3.6.1 (1) Any amount collected or collectable as or on account of tax under this Act by a collector, distributor or registered importer shall be deemed, despite any security interest in the amount so collected or collectable, to be held in trust for Her Majesty in right of Ontario and separate and apart from the property of the collector, distributor or registered importer, and from property held by any secured creditor that but for the security interest would be the property of the collector, distributor or registered importer, and shall be paid over by the collector, distributor or registered importer in the manner and at the time provided under this Act and the regulations. Extension of trust

(2) Despite any provision of this or any other Act, where at any time an amount deemed by subsection (1) to be held in trust is not paid as required under this Act, property of the collector, distributor or registered importer and property held by any secured creditor of the collector, distributor or registered importer that but for a security interest would be property of the collector, distributor or registered importer, equal in value to the amount so deemed to be held in trust shall be deemed,

(a) to be held, from the time the amount was collected or collectable by the collector, distributor or registered importer, separate and apart from the property of the collector, distributor or registered importer in trust for Her Majesty in right of Ontario whether or not the property is subject to a security interest; and

(b) to form no part of the estate or property of the collector, distributor or registered importer from the time the amount was so collected or collectable whether or not the property has in fact been kept separate and apart from the estate or property of the collector, distributor or registered importer and whether or not the property is subject to such security interest. Same

(3) The property described in subsection (2) shall be deemed to be beneficially owned by Her Majesty in right of Ontario despite any security interest in such property or in the proceeds of such property, and the proceeds of such property shall be paid to the Minister in priority to all such security interests. Exception

(4) This section and subsection 17 (3.1) do not apply in proceedings to which the Bankruptcy and Insolvency Act (Canada) or the Companies' Creditors Arrangement Act (Canada) apply. Minister's certificate

(5) Every person who, as assignee, liquidator, administrator, receiver, receiver-manager, secured or unsecured creditor or agent of the creditor, trustee or other like person, other than a trustee appointed under the Bankruptcy and Insolvency Act (Canada), takes control or possession of the property of any collector, distributor or registered importer shall, before distributing such property or the proceeds from the realization thereof under that person's control, obtain from the Minister a certificate that the amount deemed by subsection (1) to be held in trust, including any interest and penalties payable by the collector, distributor or registered importer, has been paid or that security acceptable to the Minister has been given. No distribution without Minister's certificate

(6) Any person described in subsection (5) who distributes any property described in that subsection or the proceeds of the realization thereof without having obtained the certificate required by that subsection is personally liable to Her Majesty in right of Ontario for an amount equal to the amount deemed by subsection (1) to be held in trust, including any interest and penalties payable by the collector, distributor or registered importer. Notice to be given

(7) The person described in subsection (5) shall, within 30 days from the date of that person's assumption of possession or control give written notice thereof to the Minister. Minister to advise of indebtedness

(8) As soon as practicable after receiving such notice, the Minister shall advise the person described in subsection (5) of the amount deemed by subsection (1) to be held in trust, including any interest and penalties thereon. Definitions

(9) In this section and in subsection 17 (3.1),

"secured creditor" means a person who has a security interest in the property of another person or who acts for or on behalf of that person with respect to the security interest, and includes a trustee appointed under a trust deed relating to a security interest, a receiver or receiver-manager appointed by a secured creditor or by a court on the application of a secured creditor and any other person performing a similar function; ("crancier garanti")

"security interest" means any interest in property that secures payment or performance of an obligation, and includes an interest created by or arising out of a debenture, mortgage, lien, pledge, charge, deemed or actual trust, assignment or encumbrance of any kind whatsoever or whenever arising, created or deemed to arise or otherwise provided for, but does not include a security interest prescribed by the Minister as one to which this section does not apply. ("sret") Application

(10) This section, subsection 17.1 (11.1) and clause 25.1 (2) (b) apply in respect of any tax collected or collectable by a collector, distributor or registered importer on or after January 1, 1998, whether or not the security interest was acquired before that date.

10. Section 3.8 of the Act, as enacted by the Statutes of Ontario, 1991, chapter 49, section 3, is repealed.

11. (1) Subsection 3.9 (1) of the Act, as enacted by the Statutes of Ontario, 1991, chapter 49, section 3, is amended,

(a) by inserting after "collector" in the first line "distributor"\; and

(b) by striking out "the collector, registered importer, wholesaler or retail dealer" in the seventh and eighth lines of the English version and substituting "he, she or it".

(2) Subsection 3.9 (2) of the Act, as enacted by the Statutes of Ontario, 1991, chapter 49, section 3, is amended by inserting after "collector" in the first line "distributor".

12. Subsection 4.3 (2) of the Act, as enacted by the Statutes of Ontario, 1991, chapter 49, section 4, is amended by striking out "Treasurer" in the second line and substituting "Minister".

13. Subsection 4.8 (1) of the Act, as re-enacted by the Statutes of Ontario, 1997, chapter 19, section 7, is repealed and the following substituted: Export of fuel

(1) Every exporter shall transmit to the Minister (in the form and manner required by the Minister) information in respect of fuel in bulk that the exporter intends to take or cause to be taken out of Ontario or that the exporter delivers or causes to be delivered to a person outside Ontario.

14. Subsection 4.11 (1) of the Act, as enacted by the Statutes of Ontario, 1991, chapter 49, section 4, is amended by inserting after "collector" in the fifth line "or distributor".

15. Section 4.17 of the Act, as enacted by the Statutes of Ontario, 1991, chapter 49, section 5 and amended by 1997, chapter 19, section 7, is further amended by adding the following subsection: Distributor as registered dyer

(2.1) Subject to section 9, every distributor who proposes to colour fuel is entitled to be registered as a dyer and to be issued a certificate of registration upon application (on the form provided by the Minister),

(a) if the distributor owns or operates a facility for the purposes of colouring fuel; and

(b) if the distributor has total sales of coloured fuel from all facilities owned or operated by the distributor that are greater than or equal to the prescribed percentage of the distributor's total sales of coloured fuel during the calendar year preceding the year in which the distributor applies for registration.

16. (1) Subsection 4.18 (4) of the Act, as enacted by the Statutes of Ontario, 1991, chapter 49, section 5, is repealed and the following substituted: Use of dye

(4) Every registered dyer shall use only dye provided by the Minister and shall do so in the manner, with the equipment and using the methods and procedures required under this Act to colour fuel.

(2) Section 4.18 of the Act, as enacted by the Statutes of Ontario, 1991, chapter 49, section 5, is amended by adding the following subsections: Exception

(4.1) Despite subsection (4), a registered dyer may do the following things to fuel destined for export from Canada, if the registered dyer obtains the prior written consent of the Minister to do so:

1. Manually blend dye with the fuel.

2. Blend dye with the fuel using a different quantity of dye than the quantity established by the Minister for the purposes of the definition of "colouring" in subsection 1 (1). Conditions of consent

(4.2) The Minister may give his or her consent for the purposes of subsection (4.1) and may impose such conditions and restrictions on the registered dyer as he or she considers reasonable in the circumstances, including requiring the dyer to reimburse the Minister for the cost of the dye used to colour the fuel destined for export from Canada. Same

(4.3) If the registered dyer is required to reimburse the Minister for the cost of dye as described in subsection (4.2), the amount the dyer is required to pay shall be deemed to be tax payable under this Act by the dyer and shall be paid to the Minister on or before the 25th day of the month following the month in which the dyer uses the dye.

17. Subsection 4.19 (1) of the Act, as enacted by the Statutes of Ontario, 1991, chapter 49, section 5, is amended by striking out "in accordance with the requirements prescribed by the Minister" in the second, third and fourth lines and substituting "as required by this Act and the regulations".

18. Subsection 5 (3) of the Act, as re-enacted by the Statutes of Ontario, 1991, chapter 49, section 6, is amended by striking out "driver" in the first line and substituting "operator".

19. Subsection 6 (2) of the Act, as re-enacted by the Statutes of Ontario, 1991, chapter 49, section 7 and amended by 1994, chapter 18, section 2, is further amended by inserting after "collector" in the seventh line "or distributor".

20. Subsection 6.1 (1) of the Act, as enacted by the Statutes of Ontario, 1991, chapter 49, section 8, is amended by inserting after "collector" in the first line "distributor".

21. (1) Subsection 7 (1) of the Act, as re-enacted by the Statutes of Ontario, 1991, chapter 49, section 9, is amended by inserting after "collector" in the fourth line "distributor".

(2) Clause 7 (2) (d) of the Act, as enacted by the Statutes of Ontario, 1991, chapter 49, section 9, is amended by inserting after "registered dyer" in the first line "other than a distributor".

(3) Subsection 7 (2) of the Act, as enacted by the Statutes of Ontario, 1991, chapter 49, section 9, is amended by striking out "and" at the end of clause (e), by adding "and" at the end of clause (f) and by adding the following clause:

(g) every distributor, in an amount not less than the equivalent of an average three months tax collectable and payable by the distributor calculated for the 12-month period immediately preceding the date of the Minister's demand or $100,000, whichever is the greater.

22. Subsection 10 (1) of the Act, as re-enacted by the Statutes of Ontario, 1991, chapter 49, section 12, is amended by inserting after "collector" in the first line "distributor".

23. (1) Subsection 11 (1) of the Act, as re-enacted by the Statutes of Ontario, 1991, chapter 49, section 13, is repealed and the following substituted: Transmission of tax

(1) Every collector, registered importer, registered consumer or interjurisdictional carrier shall transmit with the return required by section 10 the amount of the tax payable or the amount of the tax payable and collectable, as the case may be, by him, her or it.

(2) Subsection 11 (4) of the Act, as re-enacted by the Statutes of Ontario, 1991, chapter 49, section 13, is amended by inserting after "collector" in the second line "distributor".

24. (1) Clause 11.1 (2) (a) of the Act, as enacted by the Statutes of Ontario, 1994, chapter 18, section 2, is amended by striking out "and" at the end of subclause (iii) and by adding the following subclause:

(iii.1) all amounts paid under section 21.1 that are subsequently disallowed by the Minister in respect of a period before that date, and

. . . . .

(2) Clause 11.1 (2) (b) of the Act, as enacted by the Statutes of Ontario, 1994, chapter 18, section 2, is amended by striking out "and" at the end of subclause (ii) and by adding the following subclause:

(ii.1) all amounts paid under section 21.1 before that date, and

. . . . .

25. Subsection 12 (2) of the Act, as amended by the Statutes of Ontario, 1991, chapter 49, section 14, is further amended by inserting after "collector" in the third line and in the ninth line "distributor".

26. (1) Subsection 13 (3) of the Act is amended by inserting after "collector" in the third and fourth lines "distributor".

(2) Subsection 13 (4) of the Act is amended by inserting after "collector" in the third line and in the fifth line "or distributor".

(3) Subsection 13 (4) of the Act, as amended by subsection (2), is further amended by striking out "prescribed" at the end and substituting "established by the Minister".

(4) Subsection 13 (10) of the Act is amended by striking out "three years" in the fourth line and in the sixteenth line and substituting in each case "four years".

27. (1) Subsection 14 (1) of the Act, as re-enacted by the Statutes of Ontario, 1991, chapter 49, section 16 and amended by 1997, chapter 19, section 7, is repealed and the following substituted: Notice of objection

(1) A person who objects to an assessment or statement of disallowance under section 13, or to a penalty paid or assessed under this Act, may, within 180 days from the service of the notice of assessment or statement of disallowance, or the payment of the penalty under subsection 8 (11), serve on the Minister a notice of objection in the form approved by the Minister. Facts and reasons to be given

(1.1) The notice of objection shall,

(a) clearly describe each issue raised by way of objection; and

(b) fully set out the facts and reasons relied on by the person in respect of each issue. Same

(1.2) If a notice of objection does not fully set out the facts and reasons relied on by the person in respect of an issue, the Minister may, in writing, request the person to provide the information, and the person shall be deemed to have complied with clause (1.1) (b) in respect of the issue if the person provides the information to the Minister in writing within 60 days after the day the request is made by the Minister. Limitation

(1.3) A person shall not raise, by way of objection under this section to a fresh statement or reassessment or to a variation of an assessment or statement under subsection (4), any issue that the person is not entitled to raise by way of appeal under this section in respect of the fresh statement or reassessment or of a variation of the assessment or statement.

(2) Subsection 14 (2) of the Act is amended by adding at the end "or by such other method as the Minister may prescribe".

(3) Subsection 14 (3) of the Act is repealed.

(4) Subsection 14 (4) of the Act, as re-enacted by the Statutes of Ontario, 1991, chapter 49, section 16, is amended by striking out "and the Minister shall notify the person making the objection of the action by the Minister by letter, either sent by registered mail to, or personally served on, the person" at the end and substituting "and the Minister shall give the person who made the objection written notice of the action taken by the Minister".

(5) Section 14 of the Act, as amended by the Statutes of Ontario, 1991, chapter 49, section 16, 1994, chapter 18, section 2 and 1997, chapter 19, section 7, is further amended by adding the following subsection: Computation of time

(5.1) For the purpose of calculating the number of days mentioned in subsection (1), (1.2) or (5), the day on which a notice of assessment or a statement referred to in subsection (1) is mailed, a request is made under subsection (1.2) or notice is given under subsection (4) is the date stated on the notice, statement or request.

(6) Subsection 14 (6) of the Act, as amended by the Statutes of Ontario, 1997, chapter 19, section 7, is repealed and the following substituted: Appeal, how instituted

(6) An appeal to the Ontario Court (General Division) shall be instituted by,

(a) filing a notice of appeal with the court in the form approved by the Minister;

(b) paying a fee to the court in the same amount and manner as the fee payable under regulations made under the Administration of Justice Act on the issue of a statement of claim; and

(6.1) A person is entitled to raise by way of appeal only those issues raised by the person in a notice of objection to the assessment, statement or penalty being appealed and in respect of which the person has complied or was deemed to have complied with subsection (1.1). Exception

(6.2) Despite subsection (6.1), a person may raise by way of appeal an issue forming the basis of a fresh statement or reassessment or of a variation of an assessment, statement or penalty under subsection (4) if the issue was not part of the assessment, statement or penalty with respect to which the person served the notice of objection. Application, subss. (6.1) and (6.2)

(6.3) Subsections (6.1) and (6.2) apply only in respect of appeals in respect of which the period of 90 days referred to in subsection (5) begins after December 31, 1997. Waived right of objection or appeal

(6.4) Despite subsection (5), no person shall institute an appeal under this section to have an assessment, statement or penalty vacated or varied in respect of an issue for which the right of objection or appeal has been waived in writing by or on behalf of the person. Service

(7) A notice of appeal shall be served on the Minister by being sent by registered mail addressed to the Minister, by personal service or by such other method of service as the Minister prescribes.

28. (1) Subsection 17 (1) of the Act is amended by striking out "Treasurer" in the second line and substituting "Minister".

(2) Subsection 17 (3) of the Act is amended by striking out "Treasurer" in the tenth line and substituting "Minister".

(3) Section 17 of the Act is amended by adding the following subsections: Same

(3.1) Despite any provision of this or any other Act, where the Minister has knowledge or suspects that within 90 days a person is, or is about to become, indebted or liable to make any payment to,

(a) a person whose property is subject to the deemed trust created by subsection 3.6.1 (1); or

(b) a secured creditor who has a right to receive the payment that, but for a security interest in favour of the secured creditor, would be payable to the person referred to in clause (a),

the Minister may by ordinary mail or by demand served personally, require the first-named person to pay forthwith to the Minister on account of the liability of the person referred to in clause (a) all or part of the money that would otherwise be paid, and any such payment shall become the property of Her Majesty in right of Ontario despite any security interest in it and shall be paid to the Minister in priority to any such security interest. Same

(3.2) Subsection (3.1) applies to amounts that become subject to a deemed trust under subsection 3.6.1 (1) on or after January 1, 1998, whether or not the security interest was acquired before that date.

(4) Subsection 17 (4) of the Act is amended by striking out "Treasurer" in the first line and substituting "Minister".

(5) Subsection 17 (5) of the Act is amended by striking out "Treasurer" in the fifth line and in the eighth line and substituting in each case "Minister".

(6) Subsection 17 (8) of the Act is amended by striking out "Treasurer" in the third line and in the eleventh line and substituting in each case "Minister".

(7) Subsection 17 (9) of the Act is amended by striking out "Treasurer" in the second line and substituting "Minister".

29. Section 17.1 of the Act, as enacted by the Statutes of Ontario, 1994, chapter 18, section 2, is amended by adding the following subsection: Effect of deemed trust

(11.1) The registration of a notice of lien and charge under this section does not affect the operation of section 3.6.1 and applies to secure any liability of a taxpayer in addition to any deemed trust under that section.

30. (1) Clause 18 (1) (c) of the Act, as amended by the Statutes of Ontario, 1991, chapter 49, section 18, is further amended by inserting after "collector" in the second line "distributor".

(2) Clause 18 (1) (e) of the Act is amended by striking out "in the proportion prescribed for colouring fuel" in the ninth and tenth lines and substituting "in the proportion established by the Minister for colouring fuel".

(3) Subsection 18 (2) of the Act, as amended by the Statutes of Ontario, 1991, chapter 49, section 18, is further amended by inserting after "collector" in the sixth line "distributor".

(4) Subsection 18 (4) of the Act is amended by striking out "Ministry of Revenue" in the fifth and sixth lines and substituting "Ministry of Finance".

31. Clause 19 (5) (d) of the Act is amended by striking out "prescribed" in the fourth line and substituting "established by the Minister".

32. (1) Subsection 21 (3) of the Act, as re-enacted by the Statutes of Ontario, 1991, chapter 49, section 19, is amended by striking out "three years" in the fourth line and substituting "four years".

(2) Subsection 21 (6) of the Act, as enacted by the Statutes of Ontario, 1991, chapter 49, section 19, is amended,

(a) by striking out "Treasurer" in the second line and substituting "Minister"\; and

(b) by striking out "three years" in the sixth line and substituting "four years".

33. The Act is amended by adding the following section: Application by eligible retailer

21.1 (1) An eligible retailer who purchases fuel measured by the adjusted temperature method and sells it measured by the unadjusted temperature method may apply to the Minister to receive an amount calculated in the manner directed by the Minister in respect of the amount the retailer paid to the collector or wholesaler (from whom the fuel is purchased) on account of tax in respect of the fuel. Application by eligible wholesaler

(2) An eligible wholesaler who is not designated a collector and who purchases fuel measured by the adjusted temperature method and sells it measured by the unadjusted temperature method may apply to the Minister to receive an amount calculated in the manner directed by the Minister in respect of the amount the wholesaler paid to the collector (from whom the fuel is purchased) on account of tax in respect of the fuel. Same

(3) The application shall be made on the form and in the manner approved by the Minister and shall be given to the collector or wholesaler from whom the person purchases the fuel. Evidence of entitlement

(4) Upon the Minister's request, the applicant shall give the Minister evidence satisfactory to the Minister to prove that the person is entitled under this section to the amount for which the application is made. Payment on behalf of Minister

(5) The collector or wholesaler may make the payment to the applicant on behalf of the Minister at the time of purchase of the fuel and shall do so in a manner approved by the Minister. Termination of authority to make payments

(6) The Minister may, by a notice in writing, require a collector or wholesaler to cease making payments under this section or to cease making payments under this section to persons named in the notice, and the collector or wholesaler shall comply with the notice in accordance with its terms. Collector may reduce amounts transmitted

(7) A collector may reduce the amounts required to be transmitted to the Minister under subsection 11 (1) by the amount of the payments made by the collector on behalf of the Minister under this section, until the collector receives notice from the Minister that the Minister has determined that all or part of an amount paid under this section is disallowed as an amount that was not properly payable under this section. Collection of amounts paid

(8) If the Minister notifies a collector that an amount paid by the collector on behalf of the Minister under this section is disallowed by the Minister, the amount shall be deemed to be tax payable under this Act that the collector is required to remit to the Minister at the time indicated in the notice. Wholesaler may apply for reimbursement

(9) If a wholesaler who is not designated a collector has paid an amount under this section to an eligible retailer or eligible wholesaler, the wholesaler may apply to the Minister in the manner directed by the Minister to be reimbursed for the amount paid. Application under subs. 21 (6)

(10) Despite subsection (1) or (2), the Minister may require an eligible retailer or an eligible wholesaler to apply under subsection 21 (6) to receive amounts otherwise payable under this section; if the Minister does so, no application may be made under this section in respect of those amounts. Same

(11) For the purposes of an application under subsection 21 (6) that is required by the Minister under this section, amounts otherwise payable under this section shall be deemed to be an excess amount. Definitions

(12) In this section,

"eligible retailer" means a retailer who is an eligible retailer under the prescribed rules; ("dtaillant admissible")

"eligible wholesaler" means a wholesaler who is an eligible wholesaler under the prescribed rules. ("grossiste admissible")

34. Clause 25 (1) (b) of the Act, as re-enacted by the Statutes of Ontario, 1991, chapter 49, section 21, is amended by inserting after "collector" in the fifth line "distributor".

35. Clause 25.1 (2) (b) of the Act, as enacted by the Statutes of Ontario, 1991, chapter 49, section 22, is repealed and the following substituted:

(b) the corporation becomes subject to a proceeding to which section 3.6.1 applies and a claim is made under that section during the period beginning on the date on which the Minister should have been advised of the commencement of those proceedings and ending on the date that is six months after the remaining property of the collector, distributor or registered importer has been finally disposed of.

36. The Act is amended by adding the following section: Approval of dye by Minister

28.3 (1) The Minister may approve chemical substances that may be used to colour fuel and establish the quantity of dye in proportion to fuel to be used to colour the fuel. Same

(2) The Minister may establish the quantity of dye for the purposes of the definitions of "clear fuel" and "coloured fuel" in subsection 1 (1). Notice

(3) The Minister shall notify registered dyers of the matters approved or established under this section. Regulations Act

(4) The Regulations Act does not apply with respect to the matters approved or established under this section.

37. (1) Clause 29 (2) (i) of the Act, as re-enacted by the Statutes of Ontario, 1991, chapter 49, section 25, is amended by inserting after "collectors" in the fourth line "distributors".

(2) Clause 29 (2) (l) of the Act is repealed and the following substituted:

(l) prescribing additional conditions under which fuel may be coloured using a manual process.

(3) Subsection 29 (2) of the Act, as amended by the Statutes of Ontario, 1991, chapter 49, section 25 and 1997, chapter 19, section 7, is further amended by adding the following clause:

(v) prescribing the fuel that distributors are permitted to sell, additional conditions to be met by distributors and requirements for facilities owned or operated by distributors.

GASOLINE TAX ACT

38. Subsection 1 (1) of the Gasoline Tax Act, as amended by the Statutes of Ontario, 1991, chapter 13, section 1, 1992, chapter 9, section 1, 1994, chapter 18, section 3 and 1996, chapter 10, section 4, is further amended by adding the following definitions:

"adjusted temperature method" means the method of measuring the dispensed volume of gasoline, aviation fuel or propane by adjusting the volume to the volume at a reference temperature of 15 degrees Celsius, by means of a dispensing pump or other metering assembly that is equipped to effect the adjustment in accordance with the specifications established under the Weights and Measures Act (Canada); ("mthode de correction en fonction de la temprature")

"unadjusted temperature method" means a method of measuring the dispensed volume of gasoline, aviation fuel or propane that does not adjust the volume to the volume at a reference temperature of 15 degrees Celsius. ("mthode traditionnelle")

39. Section 2 of the Act, as amended by the Statutes of Ontario, 1991, chapter 13, section 2, 1992, chapter 9, section 2, 1994, chapter 18, section 3 and 1996, chapter 10, section 5, is further amended by adding the following subsections: Measuring volume and calculating tax

(4.4) The tax imposed by this Act shall be computed in accordance with the following rules:

1. If the volume of gasoline, aviation fuel or propane is measured by the adjusted temperature method for the purpose of determining price, the volume of the gasoline, aviation fuel or propane shall be measured using that method for the purpose of computing amounts in respect of the tax imposed by this Act.

2. If the volume of gasoline, aviation fuel or propane is measured by the unadjusted temperature method for the purpose of determining price, the volume of the gasoline, aviation fuel or propane shall be measured using that method for the purpose of computing amounts in respect of the tax imposed by this Act.

3. A person who is a collector or wholesaler shall use the same method of measuring the volume of gasoline, aviation fuel or propane on all sales to the same person during the same year. Exception

(4.5) Despite subsection (4.4), a collector or wholesaler may change to the other method of measuring the volume of gasoline, aviation fuel or propane on sales to a particular person,

(a) if a change in method is made only once; and

(b) if the determination of the amount of tax in respect of sales after the change in method is based on volumes measured by the new method.

40. Clause 4 (3) (a) of the Act is amended by striking out "under subsection (1)" in the third line.

41. (1) Subsection 11 (5) of the Act, as re-enacted by the Statutes of Ontario, 1992, chapter 9, section 7 and amended by 1996, chapter 10, section 11, is further amended by striking out "three years" in the third line and substituting "four years".

(2) Subsection 11 (16) of the Act, as enacted by the Statutes of Ontario, 1992, chapter 9, section 7, is amended by striking out "three years" in the fourth line and substituting "four years".

42. (1) Clause 12 (2) (a) of the Act, as enacted by the Statutes of Ontario, 1994, chapter 18, section 3, is amended by striking out "and" at the end of subclause (iii) and by adding the following subclause:

(iii.1) all amounts paid under section 28.2 that are subsequently disallowed by the Minister in respect of a period before that date, and

. . . . .

(2) Clause 12 (2) (b) of the Act, as enacted by the Statutes of Ontario, 1994, chapter 18, section 3, is amended by striking out "and" at the end of subclause (ii) and by adding the following subclause:

(ii.1) all amounts paid under section 28.2 before that date, and

. . . . .

43. (1) Subsection 13 (1.1) of the Act, as enacted by the Statutes of Ontario, 1992, chapter 9, section 8 and amended by 1997, chapter 19, section 8, is repealed.

(2) Subsection 13 (2) of the Act is repealed and the following substituted: Notice of objection

(2) A person who objects under subsection (1) may, within 180 days from the day on which the penalty for which no assessment has been made is paid, or from the day of mailing of the notice of assessment or statement of disallowance, serve on the Minister a notice of objection in the form approved by the Minister.

(3) Subsection 13 (3) of the Act, as re-enacted by the Statutes of Ontario, 1992, chapter 9, section 8, is repealed and the following substituted: Facts and reasons to be given

(3) The notice of objection shall,

(a) clearly describe each issue raised by way of objection; and

(b) fully set out the facts and reasons relied on by the person in respect of each issue. Same

(4) If a notice of objection does not fully set out the facts and reasons relied on by the person in respect of an issue, the Minister may in writing request the person to provide the information, and the person shall be deemed to have complied with clause (3) (b) in respect of the issue if the person provides the information to the Minister in writing within 60 days after the day the request is made by the Minister. Service

(5) A notice of objection under this section shall be served by being sent by registered mail addressed to the Minister or by such other method as the Minister may prescribe. Computation of time

(6) For the purpose of calculating the number of days mentioned in subsection (2), (4) or 14 (1), the day on which a notice of assessment or a statement of disallowance referred to in subsection (2) is mailed, a request is made under subsection (4) or a notice is given under subsection (7) is the date stated in the notice, statement or request. Reconsideration

(7) Upon receipt of a notice of objection, the Minister shall with all due dispatch reconsider and vacate, confirm or vary the assessment, statement of disallowance or penalty, or reassess, and the Minister shall give the person written notice of the action taken by the Minister. Limitation

(8) A person shall not raise, by way of objection under this section to a statement or reassessment or to a variation of an assessment, penalty or statement under subsection (7), any issue that the person is not entitled to raise by way of appeal under section 14 in respect of the statement or reassessment or of a variation of the assessment, penalty or statement.

44. (1) Subsection 14 (1) of the Act, as re-enacted by the Statutes of Ontario, 1992, chapter 9, section 9, is amended by striking out "subsection 13 (3)" in the second line and at the end and substituting in each case "subsection 13 (7)".

(2) Subsection 14 (2) of the Act, as amended by the Statutes of Ontario, 1997, chapter 19, section 8, is repealed and the following substituted: Appeal, how instituted

(2) An appeal to the Ontario Court (General Division) shall be instituted by,

(a) filing a notice of appeal with the court in the form approved by the Minister;

(b) paying a fee to the court in the same amount and manner as the fee payable under regulations made under the Administration of Justice Act on the issue of a statement of claim; and

(2.1) A person is entitled to raise by way of appeal only those issues raised by the person in a notice of objection to the assessment, statement or penalty being appealed and in respect of which the person has complied or was deemed to have complied with subsection 13 (3). Exception

(2.2) Despite subsection (2.1), a person may raise by way of appeal an issue forming the basis of a reassessment or of a variation of assessment, statement or penalty under subsection 13 (7) if the issue was not part of the assessment, statement of disallowance or payment of penalty with respect to which the person served the notice of objection. Application, subss. (2.1) and (2.2)

(2.3) Subsections (2.1) and (2.2) apply only in respect of appeals in respect of which the period of 90 days referred to in subsection (1) begins after December 31, 1997. Waived right of objection or appeal

(2.4) Despite subsection (1), no person shall institute an appeal under this section to have an assessment, penalty or statement vacated or varied in respect of an issue for which the right of objection or appeal has been waived in writing by or on behalf of the person.

45. The Act is amended by adding the following section: Trust for moneys collected

18. (1) Any amount collected or collectable as or on account of tax under this Act by a collector or registered importer shall be deemed, despite any security interest in the amount so collected or collectable, to be held in trust for Her Majesty in right of Ontario and separate and apart from the person's property and from property held by any secured creditor that but for the security interest would be the person's property and shall be paid over by the person in the manner and at the time provided under this Act and the regulations. Extension of trust

(2) Despite any other provision of this or any other Act, where at any time an amount deemed by subsection (1) to be held in trust is not paid as required under this Act, property of the collector or registered importer and property held by any secured creditor of the collector or registered importer that but for a security interest would be property of the collector or registered importer, equal in value to the amount so deemed to be held in trust shall be deemed,

(a) to be held, from the time the amount was collected or collectable by the collector or registered importer, separate and apart from the property of the collector or registered importer in trust for Her Majesty in right of Ontario whether or not the property is subject to a security interest; and

(b) to form no part of the estate or property of the collector or registered importer from the time the amount was so collected or collectable whether or not the property has in fact been kept separate and apart from the estate or property of the collector or registered importer and whether or not the property is subject to such security interest. Same

(4) This section and subsection 20 (2.1) do not apply in proceedings to which the Bankruptcy and Insolvency Act (Canada) or the Companies' Creditors Arrangement Act (Canada) apply. Minister's certificate

(5) Every person who, as assignee, liquidator, administrator, receiver, receiver-manager, secured or unsecured creditor or agent of the creditor, trustee or other like person, other than a trustee appointed under the Bankruptcy and Insolvency Act (Canada), takes control or possession of the property of any collector or registered importer shall, before distributing such property or the proceeds from the realization thereof under that person's control, obtain from the Minister a certificate that the amount deemed by subsection (1) to be held in trust, including any interest and penalties payable by the collector or registered importer, has been paid or that security acceptable to the Minister has been given. No distribution without Minister's certificate

(9) In this section and in subsection 20 (2.1),

(10) This section, subsection 19.1 (11.1) and clause 25.1 (2) (b) apply in respect of any tax collected or collectable by a collector or registered importer on or after January 1, 1998, whether or not the security interest was acquired before that date.

46. Section 19.1 of the Act, as enacted by the Statutes of Ontario, 1994, chapter 18, section 3, is amended by adding the following subsection: Effect of deemed trust

(11.1) The registration of a notice of lien and charge under this section does not affect the operation of section 18 and applies to secure any liability of a taxpayer in addition to any deemed trust under that section.

47. Section 20 of the Act, as amended by the Statutes of Ontario, 1992, chapter 9, section 3 and 1994, chapter 18, section 3, is further amended by adding the following subsections: Same

(2.1) Despite any provision of this or any other Act, where the Minister has knowledge or suspects that within 90 days a person is, or is about to become, indebted or liable to make any payment to,

(a) a person whose property is subject to the deemed trust created by subsection 18 (1); or

(b) a secured creditor who has a right to receive the payment that, but for a security interest in favour of the secured creditor, would be payable to the person referred to in clause (a),

(2.2) Subsection (2.1) applies to amounts that become subject to a deemed trust under subsection 18 (1) on or after January 1, 1998, whether or not the security interest was acquired before that date.

48. Subsection 21 (1) of the Act, as re-enacted by the Statutes of Ontario, 1992, chapter 9, section 14, is amended by striking out "three years" in the ninth line and substituting "four years".

49. Clauses 23 (1) (b) and (c) of the Act, as re-enacted by the Statutes of Ontario, 1992, chapter 9, section 16 and amended by 1996, chapter 10, section 14, are repealed and the following substituted:

(b) to evade payment of a tax imposed by this Act, destroys, alters, mutilates, hides or otherwise disposes of the records or books of account of a purchaser, person liable to pay tax under subsection 2 (4.1), retailer, wholesaler, collector, importer, exporter, interjurisdictional carrier or interjurisdictional transporter;

(c) makes, assents to or acquiesces in the making of, false or deceptive entries or omits, assents to or acquiesces in the omission to enter a material particular in records or books of account of a purchaser, person liable to pay tax under subsection 2 (4.1), retailer, wholesaler, collector, importer, exporter, interjurisdictional carrier or interjurisdictional transporter.

50. Clause 25.1 (2) (b) of the Act, as enacted by the Statutes of Ontario, 1992, chapter 9, section 18, is repealed and the following substituted:

(b) the corporation becomes subject to a proceeding to which section 18 applies and a claim is made under that section during the period beginning on the date on which the Minister should have been advised of the commencement of those proceedings and ending on the date that is six months after the remaining property of the collector or registered importer has been finally disposed of.

51. Subsection 28 (4) of the Act is amended by striking out "three years" in the third line and in the seventh line and substituting in each case "four years".

52. The Act is amended by adding the following section: Application by eligible retailer

28.2 (1) An eligible retailer who purchases gasoline measured by the adjusted temperature method and sells it measured by the unadjusted temperature method may apply to the Minister to receive an amount calculated in the manner directed by the Minister in respect of the amount the retailer paid to the collector or wholesaler (from whom the gasoline is purchased) on account of tax in respect of the gasoline. Application by eligible wholesaler

(2) An eligible wholesaler who is not designated a collector and who purchases gasoline measured by the adjusted temperature method and sells it measured by the unadjusted temperature method may apply to the Minister to receive an amount calculated in the manner directed by the Minister in respect of the amount the wholesaler paid to the collector (from whom the gasoline is purchased) on account of tax in respect of the gasoline. Same

(3) The application shall be made on the form and in the manner approved by the Minister and shall be given to the collector or wholesaler from whom the person purchases the gasoline. Evidence of entitlement

(4) Upon the Minister's request, the applicant shall give the Minister evidence satisfactory to the Minister to prove that the applicant is entitled under this section to the amount for which the application is made. Payment on behalf of Minister

(5) The collector or wholesaler may make the payment to the applicant on behalf of the Minister at the time of purchase of the gasoline and shall do so in a manner approved by the Minister. Termination of authority to make payments

(6) The Minister may, by notice in writing, require a collector or wholesaler to cease making payments under this section or to cease making payments under this section to persons named in the notice, and the collector or wholesaler shall comply with the notice in accordance with its terms. Collector may reduce amounts transmitted

(7) A collector may reduce the amounts required to be transmitted to the Minister under subsection 9 (1) by the amount of the payments made by the collector on behalf of the Minister under this section, until the collector receives notice from the Minister that the Minister has determined that all or part of an amount paid under this section is disallowed as an amount that was not properly payable under this section. Collection of amounts paid

(9) If a wholesaler who is not designated a collector has paid an amount under this section to an eligible retailer or an eligible wholesaler, the wholesaler may apply to the Minister, in the manner directed by the Minister, to be reimbursed for the amount paid. Application under s. 28

(10) Despite subsection (1) or (2), the Minister may require an eligible retailer or an eligible wholesaler to apply under section 28 to receive amounts otherwise payable under this section; if the Minister does so, no application may be made under this section in respect of those amounts. Same

(11) For the purposes of an application under section 28 that is required by the Minister under this section, amounts otherwise payable under this section shall be deemed to be overpayments. Definitions

(12) In this section,

"eligible retailer" means a retailer who is an eligible retailer under the prescribed rules; (dtaillant admissible")

"eligible wholesaler" means a wholesaler who is an eligible wholesaler under the prescribed rules. ("grossiste admissible")

53. The French version of section 29 of the Act, as re-enacted by the Statutes of Ontario, 1992, chapter 9, section 20, is amended by striking out "substantiel" in the fifth line and substituting "important".

COMMENCEMENT AND SHORT TITLE Commencement

54. (1) Subject to subsections (2) to (4), this Act comes into force on the day it receives Royal Assent. Same

(2) The following provisions shall be deemed to have come into force on December 1, 1996: 1. Subsections 1 (1) and (9). 2. Section 2. 3. Subsection 23 (1). 4. Sections 24, 33, 38, 39, 42 and 52. Same

(3) Section 13 shall be deemed to have come into force on October 10, 1997. Same

(4) The following provisions come into force on January 1, 1998: 1. Subsections 1 (2) and (4), 8 (2) and 16 (1). 2. Section 17. 3. Subsections 26 (3) and 30 (2). 4. Sections 31 and 36. 5. Subsection 37 (2). Short title

55. The short title of this Act is the Fuel and Gasoline Tax Amendment Act, 1997.