Bill 48, International Fuel Tax Agreement Implementation Act, 1996

Johnson, Hon. David John Chair of the Management Board of Cabinet

Versions

International Fuel Tax Agreement

Implementation Act, 1996

EXPLANATORY NOTE

GENERAL. The Bill makes the changes necessary to the Fuel Tax Act and the Gasoline Tax Act to permit Ontario to become a signatory to the International Fuel Tax Agreement (IFTA).

PART I

AMENDMENTS TO THE FUEL TAX ACT

SECTION 1. The definition of "interjurisdictional carrier" is changed to conform with that under the IFTA and necessary definitions of terms used in that definition are added.

SECTION 2. The section is amended to conform with the requirements of the IFTA as classes of interjurisdictional carriers will no longer be prescribed.

SECTION 3. This amendment permits the Minister, under the IFTA, to pay out of the Consolidated Revenue Fund that part of the tax, interest and penalties collected under the Act that is required to be paid to other jurisdictions.

PART II

AMENDMENTS TO THE GASOLINE TAX ACT

SECTION 4. Definitions are added to define who is an interjurisdictional carrier and to provide that an interjurisdictional carrier who uses gasoline or propane in Ontario is a purchaser under the Act.

SECTION 5. These amendments permit the calculation of tax liability based on use rather than only on purchase or delivery for interjurisdictional carriers who will be required to pay tax at the time and manner prescribed by the Minister. These changes will permit the apportionment of the tax on gasoline and propane among jurisdictions as required by the IFTA. While Ontario does not tax vehicles using natural gas as a fuel, other jurisdictions do and so a provision imposing zero tax on the use of natural gas is added.

SECTION 6. Section 4.12 of the Act provides for the registration of interjurisdictional carriers and the issuance of certificates and decals. Section 4.13 of the Act creates offences for the failure to comply with registration requirements.

SECTION 7. This provision permits the Minister to demand information and security from interjurisdictional carriers.

SECTIONS 8 and 9. These amendments will require interjurisdictional carriers to file returns and remit the appropriate tax.

SECTION 10. These amendments permit authorized persons to stop vehicles to inspect decals, documents in the possession of the driver and his or her driver's licence, and make it an offence to refuse to permit the examination of the vehicle, the documents or the driver's licence.

SECTION 11. These amendments will permit the Minister to assess interjurisdictional carriers for tax payable and to estimate tax liability where proper records have not been kept.

SECTION 12. This amendment will require an interjurisdictional carrier to maintain required books and records at its principal place of business.

SECTION 13. These amendments will permit an auditor to request the assistance of an interjurisdictional carrier or, if it is a corporation or partnership, of an enumerated official or a partner in completing the audit or answering questions. Similarly, the Minister can demand information, a return or the production of books and records from an interjurisdictional carrier, a partner or a corporate official.

SECTION 14. These amendments make it an offence for an interjurisdictional carrier to destroy records to evade tax or to make false entries to or omissions from their business records.

SECTION 15. These amendments authorize the Minister to make regulations prescribing conditions and restrictions affecting interjurisdictional carriers and governing the issuance and use of decals and prescribing fees for them.

SECTION 16. Section 34 of the Act authorizes the Minister to enter into reciprocal agreements with other jurisdictions with respect to taxpayers who operate in Ontario and in other jurisdictions, and to join the IFTA. The section also authorizes the making of regulations to implement these agreements and to substitute provisions of the agreement for provisions of the Act in certain circumstances. The section permits the Minister to pay out of the Consolidated Revenue Fund that part of the tax, interest and penalties collected under the Act that is required to be paid to other jurisdictions under any agreement.

Bill 481996

An Act to implement the

International Fuel Tax Agreement

Preamble

Under the International Fuel Tax Agreement, trucking and bus companies register in and report to only their home jurisdictions and it is the responsibility of each home jurisdiction to remit the appropriate tax liability to other participating jurisdictions. Implementation of the agreement will decrease the administrative burden on Ontario trucking and bus companies and eliminate the need for non-Ontario based trucking and bus companies to register with Ontario. To permit Ontario to qualify for membership, the Gasoline Tax Act will need amendment to permit the calculation of tax liability based on the use of interjurisdictional trucks and buses in Ontario. Minor amendments are also required to the Fuel Tax Act. It is desirable for Ontario to become a signatory of the International Fuel Tax Agreement.

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

PART I

AMENDMENTS TO THE FUEL TAX ACT

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

"gross vehicle weight" means,

(a) the combined weight of the motor vehicle and load, or

(b) where the motor vehicle is drawing a trailer or trailers, the combined weight of the motor vehicle, trailer or trailers and load.

(2) The definition of "interjurisdictional carrier" in section 1 of the Act, as re-enacted by the Statutes of Ontario, 1991, chapter 49, section 1, is repealed and the following substituted:

"interjurisdictional carrier" means a person who,

(a) operates one or more interjurisdictional vehicles inside and outside Ontario to which number plates are attached as required by the Highway Traffic Act, or

(b) engages in the commercial transportation of goods or passengers inside and outside Ontario and operates for that purpose railway equipment on rails in connection with and as part of a public transportation system.

(3) Section 1 of the Act, as amended by the Statutes of Ontario, 1991, chapter 49, section 1 and 1994, chapter 18, section 2, is further amended by adding the following definitions:

"interjurisdictional vehicle" means a motor vehicle, other than a recreational vehicle,

(a) that is operated by an interjurisdictional carrier,

(b) that is powered by fuel,

(i) has two axles and a gross vehicle weight or registered gross vehicle weight exceeding 26,000 pounds or 11,797 kilograms,

(ii) has three or more axles regardless of weight, or

(iii) draws a trailer or trailers when the combined weight of the vehicle and the trailer or trailers exceeds 26,000 pounds or 11,797 kilograms gross vehicle weight or registered gross vehicle weight, and

(d) that is operated or expected to be operated both inside and outside Ontario during a registration year;

"recreational vehicle" means a motor vehicle, whether or not it draws a trailer or trailers, used as transportation without compensation and for personal or recreational purposes and not used in connection with any business endeavour;

"registered gross vehicle weight" means the weight for which a permit has been issued under the Highway Traffic Act.

2. Subsections 4.13 (1), (2), (3) and (4) of the Act, as enacted by the Statutes of Ontario, 1991, chapter 49, section 5, are repealed and the following substituted:

Interjurisdictional carrier

(1) No person shall act as an interjurisdictional carrier unless the person is registered with the Minister.

Registration

(2) For the purposes of subsection (1), an interjurisdictional carrier shall apply, in such circumstances as the Minister may prescribe, for,

(a) an annual registration certificate; or

(b) an Ontario trip registration certificate.

Application

(3) Subject to section 9, every person who proposes to act as an interjurisdictional carrier is entitled to be registered as such and to be issued a registration certificate or an Ontario trip registration certificate, as the case may be, upon application in the form provided by the Minister and payment of the prescribed fees.

Registration decals

(4) Every interjurisdictional carrier who is registered by the Minister under clause (2) (a) is entitled to be issued registration decals upon application in the form provided by the Minister and payment of the prescribed fees.

3. Section 28.2 of the Act, as enacted by the Statutes of Ontario, 1994, chapter 18, section 2, is amended by adding the following subsections:

Payments under reciprocal agreements

(7) Despite any provision in this or any other Act, where the Minister has entered into an agreement under this section, the Minister may pay to another jurisdiction inside or outside Canada, that part of the tax, and any interest and penalties, collected under this Act that is required to be paid under the agreement.

Payments out of Consolidated Revenue Fund

(8) The Minister shall pay the amounts under subsection (7) out of the Consolidated Revenue Fund.

PART II

AMENDMENTS TO THE GASOLINE TAX ACT

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

"gross vehicle weight" means,

(a) the combined weight of the motor vehicle and load, or

(b) where the motor vehicle is drawing a trailer or trailers, the combined weight of the motor vehicle, trailer or trailers and load;

"interjurisdictional carrier" means a person who operates one or more qualified motor vehicles inside and outside Ontario to which number plates are attached as required by the Highway Traffic Act.

(2) The definition of "purchaser" in section 1 of the Act, as re-enacted by the Statutes of Ontario, 1991, chapter 13, section 1, is amended by adding at the end "and includes an interjurisdictional carrier who acquires or receives gasoline or propane for his, her or its own use or consumption or for the use or consumption of others at his, her or its expense".

(3) Section 1 of the Act, as amended by the Statutes of Ontario, 1991, chapter 13, section 1, 1992, chapter 9, section 1 and 1994, chapter 18, section 3, is further amended by adding the following definitions:

"qualified motor vehicle" means a motor vehicle, other than a recreational vehicle, that is,

(a) operated by an interjurisdictional carrier,

(b) powered by gasoline, natural gas or propane,

(i) has two axles and a gross vehicle weight or registered gross vehicle weight exceeding 26,000 pounds or 11,797 kilograms,

(ii) has three or more axles regardless of weight, or

(d) operated or expected to be operated both inside and outside Ontario during a registration year;

"recreational vehicle" means a motor vehicle, whether or not it draws a trailer or trailers, used as transportation without compensation and for personal or recreational purposes provided it is not used in connection with any business endeavour;

"registered gross vehicle weight" means the weight for which a permit has been issued under the Highway Traffic Act.

5. (1) Clause 2 (1) (b) of the Act, as re-enacted by the Statutes of Ontario, 1992, chapter 9, section 2, is amended by striking out "or delivered to" in the second line and substituting "delivered to or used by".

(2) Subsection 2 (4) of the Act, as amended by the Statutes of Ontario, 1994, chapter 18, section 3, is further amended by striking out "or delivered to" in the third line and substituting "delivered to or used by".

(3) Section 2 of the Act, as amended by the Statutes of Ontario, 1991, chapter 13, section 2, 1992, chapter 9, section 2 and 1994, chapter 18, section 3, is further amended by adding the following subsections:

Tax on interjurisdictional carriers

(4.3) Every interjurisdictional carrier who acquires natural gas anywhere shall pay a tax at the rate of 0 cents per litre on all natural gas used by the interjurisdictional carrier in Ontario to generate power in a qualified motor vehicle.

. . . . .

Tax payable by interjurisdictional carrier

(5.01) An interjurisdictional carrier shall pay the tax required under this Act to the Minister at the time and in the manner prescribed by the Minister.

6. The Act is amended by adding the following sections:

Interjurisdictional carrier

4.12 (1) No person shall act as an interjurisdictional carrier unless the person is registered with the Minister.

Registration

(2) For the purposes of subsection (1), an interjurisdictional carrier shall apply, in the circumstances prescribed by the Minister, for,

(a) an annual registration certificate; or

(b) an Ontario trip registration certificate.

Application

(3) Subject to section 7, every person who proposes to act as an interjurisdictional carrier is entitled to be registered as such and to be issued a registration certificate or an Ontario trip registration certificate, as the case may be, upon application in the form provided by the Minister and payment of the prescribed fees.

Registration decals

Conditions and limitations

(5) The Minister may attach such reasonable conditions and limitations to the registration of an interjurisdictional carrier as the Minister considers appropriate.

Offence, interjurisdictional carrier

4.13 (1) Every person who contravenes subsection 4.12 (1) or (2) is guilty of an offence and on conviction is liable to a fine of not less than $200 and not more than $2,000 plus a fine in an amount equal to the amount of the tax that should have been paid or remitted by the interjurisdictional carrier.

Same, condition or limitation

(2) Every interjurisdictional carrier who contravenes a condition or limitation attached to the registration of the interjurisdictional carrier under this Act is guilty of an offence and on conviction is liable to a fine of not less than $200 and not more than $2,000.

Same registration decal

(3) Every operator of a motor vehicle to which a valid registration decal is not affixed when so required under this Act is guilty of an offence and on conviction is liable to a fine of not less than $200 and not more than $1,000.

7. (1) Subsection 6 (1) of the Act, as re-enacted by the Statutes of Ontario, 1992, chapter 9, section 6, is repealed and the following substituted:

Information

(1) The Minister may demand information or additional information from a person for the purpose of evaluating the suitability of the person to be a collector, registered importer, registered exporter, interjurisdictional carrier or interjurisdictional transporter under this Act or to ascertain the amount of security to be furnished by the person in accordance with subsection (2) or (2.1) and the person shall deliver to the Minister the information or additional informationrequired by the Minister within the time specified in the Minister's demand.

(2) Section 6 of the Act, as re-enacted by the Statutes of Ontario, 1992, chapter 9, section 6, is amended by adding the following subsection:

Security - interjurisdictional carriers

(2.1) The Minister may demand from an interjurisdictional carrier security in a form acceptable to the Minister.

(3) Subsection 6 (3) of the Act, as re-enacted by the Statutes of Ontario, 1992, chapter 9, section 6, is amended by inserting "or (2.1)" after "(2)" in the second line.

8. (1) Subsection 8 (1) of the Act, as re-enacted by the Statutes of Ontario, 1992, chapter 9, section 6, is amended by inserting "interjurisdictional carrier" after "exporter" in the second line.

(2) Subsection 8 (2) of the Act, as re-enacted by the Statutes of Ontario, 1992, chapter 9, section 6, is amended by inserting "interjurisdictional carrier" after "exporter" in the first line.

9. (1) Subsection 9 (1) of the Act, as re-enacted by the Statutes of Ontario, 1992, chapter 9, section 6, is amended by inserting "interjurisdictional carrier" after "collector" in the first line and in the fourth line.

(2) Subsection 9 (2) of the Act, as re-enacted by the Statutes of Ontario, 1994, chapter 18, section 3, is amended by inserting "interjurisdictional carrier" after "collector" in the first line.

10. (1) Section 10.2 of the Act, as enacted by the Statutes of Ontario, 1992, chapter 9, section 6, is amended by adding the following subsection:

Same

(1.1) For the purposes of ascertaining whether the operator of a motor vehicle is an interjurisdictional carrier whose motor vehicle carries or is required to carry a valid registration decal, any person authorized for the purpose by the Minister may, without a warrant, if the person has reasonable and probable grounds to believe that the motor vehicle contains evidence of a contravention of this Act, stop and detain any vehicle in Ontario, and may,

(a) inspect any registration decal on the motor vehicle;

(b) examine the documents in the custody of the driver related to liability for tax under the Act, to the ownership of the motor vehicle and to the operator of the motor vehicle; and

(2) Clause 10.2 (2) (c) of the Act, as enacted by the Statutes of Ontario, 1992, chapter 9, section 6, is amended by inserting "or (1.1)" after "(1)" in the third line.

11. (1) Subsection 11 (5) of the Act, as re-enacted by the Statutes of Ontario, 1992, chapter 9, section 7, is amended by inserting "or interjurisdictional carrier" after "purchaser" in the second line.

(2) Subsection 11 (5.1) of the Act, as enacted by the Statutes of Ontario, 1992, chapter 9, section 7, is amended by inserting "or interjurisdictional carrier" after "purchaser" in the second and third lines and in the fifth line.

(3) Subsection 11 (6) of the Act, as amended by the Statutes of Ontario, 1991, chapter 13, section 5 and 1992, chapter 9, section 7, is repealed and the following substituted:

Assessment on inspection

(6) Where it appears from an inspection, audit or examination of the books of account, records or documents of any collector, wholesaler, importer, exporter, interjurisdictional transporter, retailer, interjurisdictional carrier, purchaser or person liable to pay tax under subsection 2 (4.1) that this Act or the regulations have not been complied with, the person making the inspection, audit or examination shall calculate the tax collectable or payable in such manner and form and by such procedure as the Minister considers adequate and expedient, and the Minister shall assess the amount of the tax collectable or of the tax, interest or penalty payable, as the case may be.

(4) Section 11 of the Act, as amended by the Statutes of Ontario, 1991, chapter 13, section 5, 1992, chapter 9, section 7 and 1994, chapter 18, section 3, is further amended by adding the following subsection:

Assessment - interjurisdictional carriers

(18) The Minister may, at any time the Minister considers reasonable, assess an interjurisdictional carrier, who has failed or refused to maintain adequate books of account as required by this Act and the regulations, the tax payable by it under this Act and, for the purposes of such assessment, the interjurisdictional carrier's qualified motor vehicles or fleet of qualified motor vehicles shall be deemed to have travelled adistance equal to 1.2 kilometres for each litre of gasoline or 1 kilometre for each litre of propane consumed by the qualified motor vehicle or fleet of qualified motor vehicles.

12. Subsection 15 (1) of the Act, as amended by the Statutes of Ontario, 1992, chapter 9, section 10, is further amended by inserting "interjurisdictional carrier" after "exporter" in the amendment of 1992.

13. (1) Clause 16 (1) (c) of the Act, as amended by the Statutes of Ontario, 1991, chapter 13, section 6 and 1992, chapter 9, section 11, is further amended by inserting "interjurisdictional carrier" after "importer" wherever it occurs.

(2) Subsection 16 (2) of the Act, as amended by the Statutes of Ontario, 1991, chapter 13, section 6 and 1992, chapter 9, section 11, is further amended by inserting "interjurisdictional carrier" after "importer" in the fifth line and in the seventh line.

14. (1) Clause 23 (1) (b) of the Act, as re-enacted by the Statutes of Ontario, 1992, chapter 9, section 16, is amended by inserting "interjurisdictional carrier" after "exporter" in the sixth line.

(2) Clause 23 (1) (c) of the Act, as re-enacted by the Statutes of Ontario, 1992, chapter 9, section 16, is amended by inserting "interjurisdictional carrier" after "exporter" in the seventh line.

15. (1) Clause 33 (2) (f) of the Act, as enacted by the Statutes of Ontario, 1992, chapter 9, section 22, is amended by inserting "interjurisdictional carriers" after "importers" in the third line.

(2) Subsection 33 (2) of the Act, as amended by the Statutes of Ontario, 1991, chapter 13, section 8 and 1992, chapter 9, section 22, is further amended by adding the following clause:

(j) governing the issuance and use of registration decals and prescribing fees for them.

16. The Act is amended by adding the following section:

Definition

34. (1) In this section,

"fuel" means gasoline, propane or natural gas.

Reciprocal agreement

(2) The Minister may enter into a reciprocal agreement with any other jurisdiction, under which the Minister may exempt from some or all of the provisions of this Act interjurisdictional carriers who use in Ontario fuel on which a tax has been paid to the other jurisdiction, on condition that the other jurisdiction grants equivalent privileges with respect to fuel that is used there and on which a tax has been paid to Ontario.

International Fuel Tax Agreement

(3) The Minister may join the International Fuel Tax Agreement.

Other agreements

(4) The Minister may enter into a co-operative agreement with any other jurisdiction to permit base jurisdiction licensing of interjurisdictional carriers who use fuel in Ontario.

Contents of agreement

(5) An agreement entered into under subsection (2) or (4) may contain provisions to facilitate its administration and may,

(a) establish a means of determining the base jurisdiction for fuel users;

(b) establish record-keeping requirements for fuel users;

(d) provide for the exchange of information between Ontario and other jurisdictions;

(e) define "qualified motor vehicle" and "motor fuel";

(f) establish bonding requirements for fuel users;

(g) establish reporting requirements and reporting periods for fuel users;

(h) establish methods of collecting fuel taxes and penalties and forwarding them to other jurisdictions;

(i) provide for the assessment of persons liable to pay tax, and their right to object and appeal.

Regulations

(6) The Lieutenant Governor in Council may make regulations that are necessary or advisable to implement an agreement entered into under this section.

Same

(7) A regulation made under subsection (6) may specify provisions of the Act that cease to apply to interjurisdictional carriers who adhere to the agreement and the provisions of the agreement that replace those provisions of the Act.

Payments under reciprocal agreements

(8) Despite this or any other Act, where the Minister has entered into an agreement under this section, the Minister may pay to another jurisdiction, inside or outside Canada, that part of the tax, and any interest and penalties, collected under this Act that is required to be paid under the agreement.

Payments out of Consolidated Revenue Fund

(9) The Minister shall pay the amounts under subsection (8) out of the Consolidated Revenue Fund.

Commencement

17. (1) Sections 3, 16, 17 and 18 come into force on the day this Act receives Royal Assent.

(2) Sections 1 and 2 and 4 to 15 come into force on January 1, 1997.

Short title

18. The short title of this Act is the International Fuel Tax Agreement Implementation Act, 1996.