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CANADIAN GHG PLAN GOES INTO EFFECT APRIL 1

The Canadian government has been one of the strongest and most aggressive nations in implementing a climate action plan.  As part of their commitment to the Paris Agreement, the Canadian government has taken several steps toward dramatically reducing the amount of Greenhouse Gas (GHG) emissions within Canada.  The Canadian government has set a goal to reduce their GHG emissions to 30% below 2005 levels by 2030.  The passage of the Greenhouse Gas Pollution Pricing Act on June 21, 2018 was just one way the Canadian government has been working to meet this GHG reduction goal. The act establishes a federal tax on GHG emissions for any business or individual household within a Province or Territory which has not already established their own provincial GHG tax.  Currently, the Provinces of Manitoba, New Brunswick, Ontario, and Saskatchewan have not established a provincial GHG tax, and thus operators of trucks in those provinces will soon be forced to pay a federal fuel tax.  Under this law, a province that currently has a carbon tax in place will continue to operate in lieu of these new federal requirements.

  

 
Earlier this month, the Canada Revenue Agency (CRA) released rules for how the federal tax will be assessed.  The new GHG plan will assess a tax at the pump on all commercial vehicles operating in provinces which currently do not have a carbon tax on fuel.  As part of their report, the CRA has released the tax rates for fuels which are set to increase each year on April 1, until the year 2022.  You may find the complete rate chart by clicking here.  The rules require all carriers operating in the Provinces of Manitoba, New Brunswick, Ontario, and Saskatchewan to register as a Road Carrier by April 1, 2019.  Upon the release of these rules, TRALA became concerned that the CRA had not considered the truck renting and leasing industry when they developed their guidelines. 
 
TRALA, working with its Canadian representative, engaged with the CRA to seek guidance on how renting and leasing companies should comply with the new carbon tax.  During these discussions, it was clear that the CRA was unaware of how the truck renting and leasing industry operates, specifically with respect to fuel tax compliance for its customers.  Originally, the CRA believed that only TRALA customers would need to register as a Road Carrier.  However, upon further discussions, and explaining the fact that many TRALA members file fuel tax information with IFTA as part of their contractual obligations, the CRA said that TRALA members could actually register as a Road Carrier.  By registering as a Road Carrier, TRALA members will be able to submit their customers' quarterly carbon tax filings as mandated by this new law similarly to what TRALA members already do for IFTA compliance.  If a Road Carrier fails to register their business with the CRA before April 1, 2019, then they could be subject to penalties including a fine of up to $2,000.
 
You may find the definitions and requirements for a Road Carrier by clicking here.
 
In reaction to this law being passed, the Province of Ontario filed a lawsuit challenging the constitutionality of the law.  The Province of Ontario does not believe that the federal government can force a carbon tax solely on the provinces which have not passed their own carbon tax plan.  This lawsuit was filed in September of 2018 and it is expected that a decision could be reached in the next few months.  In its discussions with stakeholders in Canada, it is believed that the federal government will win this lawsuit, which would then require each of the provinces that have not adopted a carbon tax to implement one of their own, or be subject to the federal standard. 
 
What is critical for TRALA members to understand is that the fuel charge application forms L400 & L400-2 require a Canada Revenue Agency business number.  Any TRALA member that is going to register as a Road Carrier in order to administer this new carbon tax must follow the below directions:
 
For Non-Residents who need to request a nine digit Canada Revenue Agency Business Number (BN9) before applying for Fuel Charge registration, please follow these instructions:

  • This information will be required when calling the BN9 registration telephone number:

    • Owner(s) name and contact number(s)

    • Physical and mailing addresses

    • Incorporating jurisdiction

  • Please identify that you are requesting a BN9 for the purpose of registering for the fuel charge program

  • Toll Free: (Canada/United States) 1-866-453-0452

  • Local: 519-252-4705

  • Please note that you may hear a beep and experience a normal connection delay.

  • Hours of operation: 8:30 a.m. – 4:30 p.m. (ET) Monday to Friday

 
After you receive your BN9 over the phone, complete the L400 & L400-2 Fuel Charge application forms, including the 9 digit BN9.
 
Submit by fax to: “Fuel Charge Program” at 705-670-6234.
 
This new tax for fuel charges will be parallel to the IFTA program, meaning you will use the same mileage figures when reporting for both programs. 
 
Canadian based companies can report electronically but US based companies must file paper reports, at least in the short term.  The rebate and payment process for US based companies has not yet been confirmed, but TRALA is committed to working with the CRA over the coming several weeks to have a process in place as soon as possible.
 
For TRALA members who will be filing their customer's fuel usage and handling the taxes and ultimately the credits, this reporting will be done quarterly.  The forms to fill out quarterly results – which must be sent in via fax or by mail – are below.
 
Here are all the links to pertinent carbon tax information that you can download:
 
Registration Forms:

L400

Fuel Charge Registration under the Greenhouse Gas Pollution Pricing Act

 

 

L400-2

Fuel Charge Registration Schedule - Road Carrier under the Greenhouse Gas Pollution Pricing Act

Quarterly Return Forms:

B400

Fuel Charge Return - Registrant under the Greenhouse Gas Pollution Pricing Act

B400-12

Fuel Charge Return Schedule - Registered Road Carrier under the Greenhouse Gas Pollution Pricing Act

 
 
TRALA will be in contact with CRA representatives throughout this process so if you have specific questions, please e-mail them to me (jjacoby@trala.org) or to Andrew Stasiowski (astasiowski@trala.org) as soon as possible so we can get an answer quickly.
 
Remember, if you are providing fuel compliance for any customer operating in the four impacted provinces, you MUST file as a Road Carrier so we urge you to do so today.
 

 
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