ET/SL 2

February 22, 1994

This notice provides information on further federal excise tax changes applicable to tobacco products for sale in Ontario. It supplements the information provided in the February 8 notice entitled Changes in Excise Levies on Tobacco Products.

The rates of federal excise tax on tobacco products destined for consumption in Ontario are being further reduced by $4.60 per carton of 200 cigarettes and $1.80 per carton of 200 tobacco sticks, effective February 22, 1994. Given the initial Canada- wide $5 per carton reduction in excise tax announced by the Prime Minister on February 8, the total reduction will be $9.60 per carton on cigarettes destined for consumption in Ontario. For tobacco sticks, the initial $5 per 200 stick carton reduction combined with the additional $1.80 per carton reduction on sticks destined for consumption in Ontario amounts to a total reduction of $6.80. It is important to note that, until Ontario institutes a marking system for manufactured tobacco, there will be no further reductions to the excise tax on manufactured tobacco destined for consumption in Ontario.

This is in keeping with the Prime Minister's earlier announcement that there will be further excise tax reductions on tobacco products sold in provinces which reduce their own tobacco taxes by more than $5 per carton of cigarettes and which have provincial marking systems in place. The Government of Ontario has reduced the provincial tobacco tax rates on cigarettes by $9.60 per carton of 200 cigarettes, and on fine cut tobacco by $9.60 per 200 gram container. As well, the Ontario rate applicable to tobacco sticks has been reduced by $9.60 per carton of 200 sticks.

This means that the new rate of federal excise tax on cigarettes destined for consumption in Ontario is $0.01888 per 5 cigarettes, effective February 22, 1994. The new rate of excise tax on tobacco sticks destined for sale in Ontario is $0.00165 per stick. The excise tax rate on manufactured tobacco remains at $10.648 per kilogram, as announced on February 8.

Certain persons holding excise tax paid cigarettes in stock at the beginning of February 22, 1994, will be entitled to an additional rebate of $4.60 per carton of 200 cigarettes destined for consumption in Ontario over and above the general $5 per carton rebate described in the February 8 notice.

The additional $4.60 per carton rebate is payable to persons with stock on hand as of February 22, 1994, destined for consumption in Ontario to the extent that the stock on hand exceeds the greater of:

• 5,000 cartons, or
  
• 1,000 cartons per retail outlet in the Province of Ontario for a claimant who has geographically separate retail outlets in Ontario.

More information on how to claim this rebate is available from any Excise/GST district office.