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
[Addressee]
Date: September 8, 2022
Case Number: 244391
Dear [Client]:
Subject: EXCISE INTERPRETATION
Clarification of specific rules in respect of farmer exemptions
Thank you for your letter of [mm/dd/yyyy] concerning the application of the Greenhouse Gas Pollution Pricing Act (GGPPA) to exemptions available to farmers.
All legislative references are to the GGPPA and the regulations therein, unless otherwise specified.
INTERPRETATION REQUESTED
You would like to know if fuel charge relief for farmers would apply to the following:
1. Bulk fuel deliveries of clear diesel to farms for farm use, and
2. Cardlock fuel picked up and used for delivery of farming materials or equipment between farming locations both within Canada and/or across the United States Border.
INTERPRETATION GIVEN
The fuel charge is enacted by Part I of the GGPPA and the Fuel Charge Regulations (Regulations). A farmer with a business number can provide an exemption certificate to a registered distributor for qualifying farming fuel (gasoline or light fuel oil) that is delivered to a farm, or a farmer at a cardlock facility, that is for use exclusively (100%) in the operation of eligible farming machinery, or of an auxiliary component of eligible farming machinery, and all or substantially all (greater than 90%) of the fuel is for use in the course of eligible farming activities. If the delivery by the registered distributor is made to a farm, or at a cardlock facility, and an exemption certificate applies, a charge is not payable by the registered distributor.
Bulk fuel deliveries of clear diesel to farms for farm use:
The GGPPA does not distinguish between clear and marked light fuel oil (diesel). A charge would not be payable by a registered distributor for a delivery of light fuel oil to a farm where an exemption certificate has been provided by a farmer in accordance with subparagraph 36(1)(b)(vii).
Cardlock fuel pick up, and travel between farms:
A registered distributor can deliver qualifying farming fuel to a farmer at a cardlock facility without paying the fuel charge if the farmer has provided an exemption certificate to the registered distributor in accordance with subparagraph 36(1)(b)(viii). Under paragraph 18 of the Fuel Charge Regulations, eligible farming activity includes the operation of eligible farming machinery for the purposes of travelling between a farm and a cardlock facility to obtain gasoline or light fuel oil. Eligible farming activities also include the operation of eligible farming machinery for the purposes of going from a location at a farm to another location at a farm. There is no reference to a domestic or foreign location for a farm. The farm locations can be at the same farm, two different farms of a farmer, or farms of two different farmers. When the vehicle used for making deliveries meets the definition of eligible farming machinery under section 3, travel between a location at a farm and another location at a farm or between a cardlock facility to obtain fuel and a farm, may qualify to be eligible farming activities. For example, a farm truck or tractor, that is not a vehicle that is an automobile as defined in subsection 248(1) of the Income Tax Act may qualify as eligible farming machinery.
Farmers who give an exemption certificate to a registered distributor and use gasoline or light fuel oil otherwise than in eligible farming activities have reporting requirements under section 24. Farmers use Form B401, Fuel Charge Return for Non-registrants, and Form B401-1, Fuel Charge Return Schedule for Non-registrant under the Greenhouse Gas Pollution Pricing Act to report any fuel used in non-eligible farming activities .
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(s) given in this letter, including any additional information, is not a ruling and does not bind the Canada Revenue Agency (CRA) with respect to a particular situation. Future changes to the GGPPA, regulations, or the CRA’s interpretative policy could affect the interpretation(s) or the additional information provided herein,
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 647-355-9305.
Yours truly,
Janet Pelletier
Janet Pelletier, CPA, CGA
Rulings Officer, Fuel Charge Unit
Excise Duties and Taxes Division
Excise and GST/HST Rulings Directorate
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