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Budget Implementation Act, 2022, No. 1 (S.C. 2022, c. 10)

Assented to 2022-06-23

PART 3Amendments to the Excise Act, 2001, the Excise Act and Other Related Texts (continued)

DIVISION 1Excise Act, 2001 and Other Related Texts (Vaping Products) (continued)

2002, c. 22Excise Act, 2001 (continued)

  •  (1) The portion of subsection 159(1) of the Act before paragraph (a) is replaced by the following:

    Marginal note:Determination of fiscal months

    • 159 (1) The fiscal months of a person other than a cannabis licensee or a vaping product licensee shall be determined in accordance with the following rules:

  • (2) Subsection 159(1.01) of the Act is replaced by the following:

    • Marginal note:Fiscal months — cannabis or vaping product licensee

      (1.01) For the purposes of this Act, the fiscal months of a cannabis licensee or a vaping product licensee are calendar months.

 Section 180 of the Act is replaced by the following:

Marginal note:No refund — exportation

180 Subject to this Act, the duty paid on any tobacco product, cannabis product, vaping product or alcohol entered into the duty-paid market shall not be refunded on the exportation of the tobacco product, cannabis product, vaping product or alcohol.

 The Act is amended by adding the following after section 187.1:

Marginal note:Refund of duty — destroyed vaping product

187.2 The Minister may refund to a vaping product licensee the duty paid on a vaping product that is re-worked or destroyed by the licensee in accordance with section 158.53 if the licensee applies for the refund within two years after the vaping product is re-worked or destroyed.

  •  (1) Paragraph 206(1)(d) of the Act is replaced by the following:

    • (d) every person that transports a tobacco product, cannabis product or vaping product that is not stamped or non-duty-paid packaged alcohol.

  • (2) Section 206 of the Act is amended by adding the following after subsection (2.01):

    • Marginal note:Keeping records — vaping product licensee

      (2.02) Every vaping product licensee shall keep records that will enable the determination of the amount of vaping product manufactured, received, used, packaged, re-worked, sold or disposed of by the licensee.

  •  (1) The portion of section 214 of the Act before paragraph (a) is replaced by the following:

    Marginal note:Unlawful production, sale, etc.

    214 Every person that contravenes any of sections 25, 25.2 to 25.4, 27 and 29, subsection 32.1(1) and sections 60, 62, 158.02, 158.04 to 158.06, 158.08, 158.1 and 158.37 to 158.39 is guilty of an offence and liable

  • (2) The portion of section 214 of the Act before paragraph (a), as enacted by subsection (1), is replaced by the following:

    Marginal note:Unlawful production, sale, etc.

    214 Every person that contravenes any of sections 25, 25.2 to 25.4, 27 and 29, subsection 32.1(1) and sections 60, 62, 158.02, 158.04 to 158.06, 158.08, 158.1, 158.35, 158.37 to 158.39, 158.41 and 158.43 is guilty of an offence and liable

 The Act is amended by adding the following after section 218.1:

Marginal note:Punishment — sections 158.44 and 158.45

  • 218.2 (1) Every person that contravenes section 158.44 or 158.45 is guilty of an offence and liable

    • (a) on conviction on indictment, to a fine of not less than the amount determined under subsection (2) and not more than the amount determined under subsection (3) or to imprisonment for a term of not more than five years, or to both; or

    • (b) on summary conviction, to a fine of not less than the amount determined under subsection (2) and not more than the lesser of $500,000 and the amount determined under subsection (3) or to imprisonment for a term of not more than 18 months, or to both.

  • Marginal note:Minimum amount

    (2) The amount determined under this subsection for an offence under subsection (1) is the greater of

    • (a) the amount determined by the formula

      (A + B) × 200%

      where

      A
      is the amount determined under Schedule 8 in respect of the vaping products to which the offence relates, using the rates of duty applicable at the time the offence was committed, and
      B
      is
      • (i) if the offence occurred in a specified vaping province, the amount determined for A, and

      • (ii) in any other case, 0, and

    • (b) $1,000 in the case of an indictable offence and $500 in the case of an offence punishable on summary conviction.

  • Marginal note:Maximum amount

    (3) The amount determined under this subsection for an offence under subsection (1) is the greater of

    • (a) the amount determined by the formula

      (A + B) × 300%

      where

      A
      is the amount determined under Schedule 8 in respect of the vaping products to which the offence relates, using the rates of duty applicable at the time the offence was committed, and
      B
      is
      • (i) if the offence occurred in a specified vaping province, the amount determined for A, and

      • (ii) in any other case, 0, and

    • (b) $2,000 in the case of an indictable offence and $1,000 in the case of an offence punishable on summary conviction.

 Paragraph 230(1)(a) of the Act is replaced by the following:

  • (a) the commission of an offence under section 214 or subsection 216(1), 218(1), 218.1(1), 218.2(1) or 231(1); or

 Paragraph 231(1)(a) of the Act is replaced by the following:

  • (a) the commission of an offence under section 214 or subsection 216(1), 218(1), 218.1(1) or 218.2(1); or

 Subsection 232(1) of the Act is replaced by the following:

Marginal note:Part XII.2 of Criminal Code applicable

  • 232 (1) Sections 462.3 and 462.32 to 462.5 of the Criminal Code apply, with any modifications that the circumstances require, in respect of proceedings for an offence under section 214, subsection 216(1), 218(1), 218.1(1) or 218.2(1) or section 230 or 231.

 The Act is amended by adding the following after section 233.1:

Marginal note:Contravention of section 158.46 or 158.49

233.2 Every vaping product licensee that contravenes section 158.46 or 158.49 is liable to a penalty equal to the amount determined by the formula

(A + B) × 200%

where

A
is the amount determined under Schedule 8 in respect of the vaping products to which the contravention relates, using the rates of duty applicable at the time the contravention occurred; and
B
is
  • (a) if the contravention occurred in a specified vaping province, the amount determined for A, and

  • (b) in any other case, 0.

  •  (1) Subsection 234(1) of the Act is replaced by the following:

    Marginal note:Contravention of certain sections

    • 234 (1) Every person that contravenes section 38, 40, 49, 61, 62.1, 99, 149, 151, 158.15, 158.5 or 158.67 is liable to a penalty of not more than $25,000.

  • (2) Subsection 234(1) of the Act, as enacted by subsection (1), is replaced by the following:

    Marginal note:Contravention of certain sections

    • 234 (1) Every person that contravenes section 38, 40, 49, 61, 62.1, 99, 149, 151, 158.15, 158.5, 158.52 or 158.67 is liable to a penalty of not more than $25,000.

  • (3) Section 234 of the Act is amended by adding the following after subsection (3):

    • Marginal note:Failure to comply

      (4) Every person that fails to return or destroy stamps as directed by the Minister under paragraph 158.4(b) is liable to a penalty of not more than $25,000.

  • (4) Subsection 234(4) of the Act, as enacted by subsection (3), is replaced by the following:

    • Marginal note:Failure to comply

      (4) Every person that fails to return or destroy stamps as directed by the Minister under paragraph 158.4(b), or that fails to re-work or destroy a vaping product in the manner authorized by the Minister under section 158.53, is liable to a penalty of not more than $25,000.

 The Act is amended by adding the following after section 234.1:

Marginal note:Contravention — sections 158.35 and 158.43 to 158.45

234.2 Every person that contravenes section 158.35, that receives for sale vaping products in contravention of section 158.43 or that sells or offers to sell vaping products in contravention of section 158.44 or 158.45 is liable to a penalty equal to the amount determined by the formula

(A + B) × 200%

where

A
is the amount determined under Schedule 8 in respect of the vaping products to which the contravention relates, using the rates of duty applicable at the time the contravention occurred; and
B
is
  • (a) if the contravention occurred in a specified vaping province, the amount determined for A, and

  • (b) in any other case, 0.

 Subsection 237(6) of the Act is replaced by the following:

  • Marginal note:Diversion of unstamped vaping products

    (5.1) Every vaping product licensee is liable to a penalty in respect of a vaping product manufactured in Canada that is removed from the excise warehouse of the licensee for a purpose described in subsection 158.68(2) if the product is not delivered or exported, as the case may be, for that purpose.

  • Marginal note:Diversion of imported vaping products

    (5.2) Every excise warehouse licensee is liable to a penalty in respect of an imported vaping product that is removed from the excise warehouse of the licensee for a purpose described in subsection 158.69(2) if the product is not delivered or exported, as the case may be, for that purpose.

  • Marginal note:Amount of penalty for diversion of vaping products

    (5.3) The amount of a penalty for each vaping product that is removed from an excise warehouse for a purpose referred to in subsection (5.1) or (5.2) and that is not delivered or exported, as the case may be, for that purpose is equal to the amount determined by the formula

    (A + B) × 200%

    where

    A
    is the amount determined under Schedule 8 in respect of the vaping product, using the rates of duty applicable at the time the vaping product is removed from the excise warehouse; and
    B
    is
    • (a) if at least one province is prescribed for the purposes of the definition specified vaping province in section 2 at the time the vaping product is removed from the excise warehouse, the amount determined for A, and

    • (b) in any other case, 0.

  • Marginal note:Exception

    (6) A licensee that would otherwise be liable to a penalty under this section is not liable if the licensee proves to the satisfaction of the Minister that the alcohol, tobacco product or vaping product that was removed from their excise warehouse or special excise warehouse was returned to that warehouse.

 The Act is amended by adding the following after section 238:

Marginal note:Penalty in respect of unaccounted vaping products

  • 238.01 (1) Every excise warehouse licensee is liable to a penalty in respect of a vaping product entered into their excise warehouse if the licensee cannot account for the vaping product

    • (a) as being in the warehouse;

    • (b) as having been removed from the warehouse in accordance with this Act; or

    • (c) as having been destroyed by fire while kept in the warehouse.

  • Marginal note:Amount of penalty

    (2) The amount of a penalty for each vaping product that cannot be accounted for is equal to the amount determined by the formula

    (A + B) × 200%

    where

    A
    is the amount determined under Schedule 8 in respect of the vaping product, using the rates of duty applicable at the time the vaping product is entered into the excise warehouse; and
    B
    is
    • (a) if at least one province is prescribed for the purposes of the definition specified vaping province in section 2 at the time the vaping product is entered into the excise warehouse, the amount determined for A, and

    • (b) in any other case, 0.

  •  (1) Paragraph 238.1(1)(a) of the Act is replaced by the following:

    • (a) the person can demonstrate that the stamps were affixed to tobacco products, cannabis products, vaping products or their containers in the manner prescribed for the purposes of the definition stamped in section 2 and that duty, other than special duty, has been paid on the tobacco products, cannabis products or vaping products; or

  • (2) Subsection 238.1(2) of the Act is amended by striking out “or” at the end of paragraph (a), by adding “or” at the end of paragraph (b) and by adding the following after paragraph (b):

    • (c) in the case of a vaping excise stamp

      • (i) if the stamp is in respect of a specified vaping province, $10.00, and

      • (ii) in any other case, $5.00.

 The portion of section 239 of the Act before paragraph (a) is replaced by the following:

Marginal note:Other diversions

239 Unless section 237 applies, every person is liable to a penalty equal to 200% of the duty that was imposed on packaged alcohol, a tobacco product, a cannabis product or a vaping product if

 Section 264 of the Act is replaced by the following:

Marginal note:Certain things not to be returned

264 Despite any other provision of this Act, any alcohol, specially denatured alcohol, restricted formulation, raw leaf tobacco, excise stamp, tobacco product, cannabis product or vaping product that is seized under section 260 must not be returned to the person from whom it was seized or any other person unless it was seized in error.

 Subsection 266(2) of the Act is amended by striking out “and” at the end of paragraph (d), by adding “and” at the end of paragraph (e) and by adding the following after paragraph (e):

  • (f) a seized vaping product only to a vaping product licensee.

  •  (1) Paragraph 304(1)(c.1) of the Act is replaced by the following:

    • (c.1) respecting the types of security that are acceptable for the purposes of subsection 158.03(3) or 158.36(3), and the manner by which the amount of the security is to be determined;

  • (2) Paragraph 304(1)(f) of the Act is replaced by the following:

    • (f) respecting the information to be provided on tobacco products, packaged alcohol, cannabis products and vaping products and on containers of tobacco products, packaged alcohol, cannabis products and vaping products;

  • (3) Paragraph 304(1)(i) of the Act is replaced by the following:

    • (i) respecting the entry and removal of tobacco products, alcohol or vaping products from an excise warehouse or a special excise warehouse;

  • (4) Paragraph 304(1)(n) of the Act is replaced by the following:

    • (n) respecting the sale under section 266 of alcohol, tobacco products, raw leaf tobacco, specially denatured alcohol, restricted formulations, cannabis products or vaping products seized under section 260;

 

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