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 GST/HST Rulings Directorate
Place de Ville, Tower A, 11th floor
320 Queen Street
Ottawa ON K1A 0L5
(the Client)(the Client)[…]][Client’s address][…][…]
Date: June 20, 2022
Case Number: 243570
Dear […](the Client):
Subject: FUEL CHARGE INTERPRETATION
Application of the fuel charge in respect of peat moss harvesting
Thank you for your correspondence received on May 11, 2022, concerning the application of the Greenhouse Gas Pollution Pricing Act (GGPPA) to peat moss farmers. We apologize for the delay in our response.
All legislative references are to the GGPPA and the regulations therein, unless otherwise specified.
Interpretation Requested
Does harvesting peat moss meet the definition of farming for purposes of the fuel charge under the GGPPA?
Interpretation Given
Under subsection 17(1), a registered distributor in respect of a type of fuel that delivers fuel of that type to another person in a listed province must pay a charge in respect of the fuel and the listed province. In accordance with subsection 17(2), the fuel charge is not payable under subsection 17(1) if a registered distributor delivers qualifying farming fuel in a listed province to a farmer who provides an exemption certificate in accordance with subparagraph 36(1)(b)(vii). An exemption certificate only applies in respect of a delivery if all or substantially all of the fuel is for use in the course of eligible farming activities.
Under section 3 of the GGPPA, farmer means a person that carries on a farming business with a reasonable expectation of profit. Farming is also defined in the GGPPA and includes a list of activities. Definitions that begin with “includes” are non-exhaustive in the sense that they do not displace the ordinary meaning and often enlarge it. However, they are exhaustive in the sense that, for the definition to apply, the person or thing in question must come either within the ordinary meaning of the defined term or within the meaning of the terms following “includes” (Footnote 1).
Although peat moss harvesting is not specifically defined under the GGPPA, it is possible to find general guidance under the Income Tax Folio S4-F11-C1, Meaning of Farming and Farming Business. The Folio provides a list of activities that could potentially fall within the meaning of farming. An amendment effective October 3, 2017, has removed peat moss from the other farming activities listed under section 1.5. Additional guidance may be found under subsection 1104(3) of the Income Tax Regulations which define peat moss harvesting not as a farming activity but rather a mining activity. As such, peat moss is generally not farmed, and does not fall within the meaning of the definition as an eligible farming activity under the GGPPA. Consequently, a person that carries on a business of harvesting peat moss does not meet the definition of farmer under the GGPPA.
This is consistent with the Income Tax Act as the harvesting of peat is considered to be mining, and not farming.
In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, the interpretation given 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 GGPPA, regulations, or the CRA’s interpretative policy could affect the interpretation or the additional information provided herein.
If you require clarification, please call me directly at 438-334-7151.
Yours truly,
Angelique St-Pierre
Rulings Officer, Fuel Charge Unit
Excise Duties and Taxes Division
Excise and GST/HST Rulings Directorate
FOOTNOTES
1 Saskatchewan Crop Insurance Corp. v. McVeigh, [2018] S. J. No. 358, 2018 SKCA 76 at para. 157
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