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U.S. Carriers Subject To Canada’s Carbon Tax

US carriers subject to canada's carbon tax

As of April 1st, 2019, 4 Canadian provinces, (Saskatchewan, Manitoba, Ontario, and New Brunswick), are now subject to the Canadian federal carbon pricing system, which was announced last fall.  Beginning July 1st, 2019, the provinces of Nunavut and Yukon will also be added to this list.  Non-Canadian carriers operating in any of those provinces will be subject to the fuel surcharge, need be registered with the Canadian Revenue Agency (CRA) and the federal tax authority, and are also required to submit quarterly reports. 

The surcharge in fuel prices is part 1 of 2 of the Canadian Greenhouse Gas Pollution Pricing Act, an effort to protect the environment.  According to the Government of Canada’s website, “The Greenhouse Gas Pollution Pricing Act, which implements the federal carbon pollution pricing system, is composed of two key parts. Part 1, administered by the Canada Revenue Agency (CRA), applies a charge to 21 types of fuel and combustible waste. Part 2, administered by Environment and Climate Change Canada, introduces an output-based pricing system (OBPS) for industrial facilities.”

Which carriers do the mandatory CRA registration apply to?  According to the Canadian Revenue Agency “Every inter-jurisdictional road carrier that uses fuel that is gasoline, light fuel oil (diesel), marketable natural gas or propane, in a specified commercial vehicle, in a listed province is required to be registered as a road carrier with the CRA. Generally, any road carrier that provides commercial transportation of individuals or goods by road from one province to another or from a location that is outside of Canada to another location in Canada, and travels to or through a listed province, will be required to register. These road carriers must register with the CRA by April 1, 2019, for business activities in Manitoba, New, Ontario and Saskatchewan, and July 1, 2019, for business activities in Nunavut and Yukon.”

In addition to registering with the CRA, inter-jurisdictional road carriers are expected to report fuel that is used in listed provinces by completing and filing quarterly returns that identify the quantity of fuel used within each listed province.  The road carrier may then either be entitled to claim a rebate or required to pay a fuel charge. Also, the fuel surcharge purchases do affect all purchases of fuel in the listed provinces.  However, fuel purchases made in a listed province, but used outside of a listed province may be eligible for a rebate.  The fuel surcharge is around 0.20 Canadian cents per gallon and fines for failure to register with the CRA could cost up to 2,000 Canadian dollars.  


Inter-jurisdictional carriers in Saskatchewan, Manitoba, Ontario, and New Brunswick should have registered already by now.  For carriers that do business activities in Nunavut and Yukon, they must register before July 1st, 2019.  For more information on how to register, visit the website.

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