Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.
Excise and Specialty Tax Directorate
5th floor, Tower A, Place de Ville
320 Queen Street
Ottawa ON K1A 0L5
[Client]
[Client Address]
File Reference:260723CAN
Business Number: [Business Number]
Attention:
[client]
July 23, 2026
Dear[client]:
Subject: Excise Duty interpretation - Qualification for quarterly filing
Thank you for your correspondence of July 3, 2026, concerning the revocation of your quarterly filing for Cannabis Duty and Information Return under the Excise Act, 2001 (Act).
All legislative references are to the Act unless otherwise specified.
INTERPRETATION REQUESTED
We understand that you would like clarification on:
1. Whether temporary arrears during the term of a licence, which are fully satisfied prior to licence renewal, should automatically result in the revocation of a quarterly filing authorization.
2. Whether the legislative intent of section 160 contemplates the unique payment cycle within the cannabis industry, where excise duty is frequently payable before licensed producers receive payment from provincial distributors.
3. Whether maintaining quarterly filing, where it facilitates full compliance and improves a licensee's ability to meet its obligations, is consistent with the purpose and intent of the Act.
INTERPRETATION GIVEN
With respect to quarterly reporting period, subsection 159.2(2) of the Act states:
On application by a cannabis licensee, the Minister may, in writing, authorize the reporting periods of the cannabis licensee to be calendar quarters, beginning on the first day of a calendar quarter.
Since the legislation specifies that “…the Minister may authorize the reporting periods of the cannabis licensee to be calendar quarters…”, the option of reporting on a quarterly basis is authorized at the discretion of the Canada Revenue Agency (CRA) and is not a guaranteed entitlement to holders of a CRA cannabis licence.
The legislation provides a level of discretion to the CRA to decide whether the authorization of quarterly filing is merited by the cannabis licensee. This is based on, among other things, the history of compliance shown by the cannabis licensee with their reporting and payment obligations under the Act.
The CRA may also revoke the authorization to file on a quarterly basis, as per paragraph 159.2(5)(b) of the Act which states:
The Minister may revoke an authorization under subsection (2) in respect of a cannabis licensee if the cannabis licensee fails to comply with the Act.
The CRA authorized quarterly filing for [the Company] starting in [date].
The cannabis excise duties payable reported on the B300 return for the quarter period ending March 31, 2026 were due to be paid in full by April 30, 2026. As of the date of this letter, this quarterly return has only been partially paid.
Section 160 of the Act states that:
Every person who is licensed under this Act shall, not later than the last day of the first month after each reporting period of the person,
(a) file a return with the Minister, in the prescribed form and manner, for that reporting period;
(b) calculate, in the return, the total amount of the duty payable, if any, by the person for that reporting period; and
(c) pay that amount to the Receiver General.
The intent of Section 160 is for the payment of duties to be remitted to the CRA no later than the last day of the following month of the reporting period whether the reporting period is monthly or calendar quarter. Regardless of the industry, the provision for excise duty payment obligations of a licensee cannot contemplate or take into consideration the payment cycle of the licensee’s purchasers. Although subsection 159.2(2) may authorize a licensee to file on a quarterly basis, it does not permit the licensee to extend the payment of a return over several months after it is due.
Therefore, to be compliant with the Act, the amount due for the reporting period of March 31, 2026, must have been paid in full by April 30, 2026. Failing to do so is not compliant with section 160 of the Act. A partial payment, or paying the return before the next renewal period, is not considered to be compliant with section 160 of the Act.
Accordingly, the CRA revoked your authorization for quarterly filing privileges of [the Company].
You may reapply for authorization to file on a quarterly basis should your compliance requirements with the Act improve. To do so, please reach out to your regional office with a written request to be considered.
DISCLAIMER
The interpretation provided in this letter, including any additional information, is not a ruling and does not bind the CRA with respect to a particular situation. Future changes to the Act, regulations, or the CRA’s interpretative policy could affect the interpretation or the additional information provided herein.
CONTACT
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at (343) 484-3486.
Sincerely,
Neil Varan
Senior Rulings Officer
Excise Duty Operations - Cannabis
Excise Duty Division
Excise and Specialty Tax Directorate
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