An often-overlooked aspect of Canadian indirect tax is the degree to which provincial fuel and carbon tax statutes vary across the country — and the surprising and significant consequences for non-resident businesses with limited connections to Canada.
US and international petroleum traders selling fuel into Canada present a good example of the complexities in this area, and how the rules can vary substantially from province-to-province leading to unforeseen registration, licensing, and Fuel Tax collection requirements!
Carbon pricing in Canada can be confusing for both new entrants to the market and established players. This comes from Canada’s patchwork system of rules which vary across the country. Adding to the complexity is the fact that the federal Greenhouse Gas Pollution Pricing Act (“GGPPA”) only applies (as a “backstop”) where provincial/territorial legislation is not strict enough (in the opinion of the federal government)!
US businesses with Canadian carbon activities need to be aware of multiple different rules – federal (under the GGPPA, which applies in the so-called “listed provinces” outlined below) and provincial/territorial (applicable to the particular province in which they are operating).
Figuring out where one has to register is just the first step!