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
[Third party addressee]
[the Third party]
[the Third party’s address]
Date: August 1, 2023
Case Number: 9000133
Dear […][Third party addressee]::
Subject: FUEL CHARGE INTERPRETATION
Eligibility for partial fuel charge relief as a mushroom grower
Thank you for your letter dated December 21, 2022, concerning the application of the Greenhouse Gas Pollution Pricing Act (the Act) and its regulations to mushroom growing operations in the listed province of […].
STATEMENT OF FACTS
We understand the following information pertaining to your request:
1. […], […] and […] (the requestors) have mushroom growing operations in the listed province of […].
2. The buildings operated by the requestors where mushrooms are grown are opaque, involving insulated materials, rather than translucent glass to prevent sunlight from reaching their produce.
3. The requestors use natural gas to operate the buildings where mushrooms are grown.
4. In October 2022, two of the requestors, […] and […], provided an exemption certificate to their natural gas provider to obtain partial relief from the fuel charge as a greenhouse operator.
5. The natural gas provider did not provide relief based on the conclusion that […] and […] do not operate an eligible greenhouse.
Interpretation Requested
You would like to know the following:
1. Whether the buildings used in mushroom growing qualify as eligible greenhouses;
2. Whether mushrooms are considered vegetables, fruits or plants for the purposes of a greenhouse operator;
3. Whether the requestors can provide an exemption certificate to its natural gas supplier to receive partial relief from the fuel charge when marketable natural gas is delivered to their buildings.
Interpretation Given
In accordance with section 1 of the Regulations, an eligible greenhouse means a greenhouse all or substantially all of which is used for the growing vegetables, fruits, bedding plants, flowers, ornamental plants, tree seedlings, medicinal plants or other plants. Although the term greenhouse is not defined in the Act, we considered the common definition of the term greenhouse which is a structure with walls and roof made chiefly of glass or translucent plastic in which plants requiring regulated climatic conditions are grown.
In accordance with section 1 of the Regulations, an eligible greenhouse activity is the use of qualifying greenhouse fuel to heat an eligible greenhouse or to supplement carbon dioxide in an eligible greenhouse in order to grow or produce plants. The insulated opaque buildings where mushrooms are grown by the requestors are not built to allow light through and therefore do not meet this definition of eligible greenhouse.
To be eligible for partial relief, a greenhouse operator must be in the business of growing vegetables, fruits, bedding plants, flowers, ornamental plants, tree seedlings, medicinal plants or other plants in eligible greenhouses with a reasonable expectation of profit in accordance with section 1 of the Regulations. As mushroom is a fungus generally requiring dark conditions for growth, a person in the business of growing mushrooms would not be considered a greenhouse operator.
[…], […] and […] are not greenhouse operators nor do they operate eligible greenhouses. The requestors are not eligible to present an exemption certificate (L404) to receive partial relief from the fuel charge for marketable natural gas deliveries or other qualifying fuel as they do not meet the conditions under subparagraph 36(1)(b)(viii) of the Act.
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 Canada Revenue Agency (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.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 289-440-1728.
Yours truly,
Vinella Kistnasamy
Rulings Officer, Fuel Charge Unit
Excise Duties and Taxes Division
Excise and GST/HST Rulings Directorate
Email this Content