Legislative and Regulatory Proposals Relating to the Excise Tax Act, the Excise Act, 2001, the Air Travellers Security Charge Act and the Select Luxury Items Tax Act
Published by
The Honourable François-Philippe Champagne, P.C., M.P.
Minister of Finance and National Revenue
July 2026
Various clauses in these draft legislative proposals take into consideration the possibility that Bill C-31, introduced in the 1st session of the 45th Parliament and entitled A second Act to implement certain provisions of the budget tabled in Parliament on November 4, 2025, may be granted royal assent.
Related documents
Part 1Draft Amendments to the Excise Tax Act
1 (1) Paragraph (a) of the definition virtual payment instrument in subsection 123(1) of the Excise Tax Act is replaced by the following:
(a) confers a right, whether immediate or future and whether absolute or contingent, to be exchanged or redeemed for, or to be converted into, specific services or property other than financial instruments,
(2) Subsection 123(1) of the Act is amended by adding the following in alphabetical order:
- reverse charge supplies
reverse charge supplies means property or a service (other than a prescribed property or service) that is
(a) a service of providing, or a right of access to, capacity for the transmission of data, using Voice over Internet Protocol-based technology, for the purpose of enabling a voice communication service that
(i) involves one or more telephone numbers conforming with the North American Numbering Plan, or
(ii) provides access to the public switched telephone network, or
(b) a prescribed property or service; (fournitures assujetties au versement inversé)
(3) Subsection (1) is deemed to have come into force on May 18, 2019, but does not apply in respect of property that is supplied by a person if
(a) all of the consideration for the supply became due or was paid on or before Announcement Date; and
(b) on or before Announcement Date, the person charged, collected or remitted any amount as or on account of tax under Part IX of the Act in respect of the supply.
(4) Subsection (2) comes into force on the first day of the second month following the month in which the Act enacting that subsection receives royal assent.
2 (1) Section 130.1 of the Act is renumbered as subsection 130.1(1) and is amended by adding the following:
Marginal note:Retail Payment Activities Act trusts
(2) If a trust is deemed not to be a trust at any time under paragraph 104(32)(a) of the Income Tax Act, the trust is deemed not to be a trust at that time for the purposes of this Part.
(2) Subsection (1) is deemed to have come into force on September 8, 2025.
3 (1) Subparagraphs (c)(i) and (ii) of the definition qualifying member in subsection 156(1) of the Act are replaced by the following:
(i) the registrant has property (other than property having a nominal value and financial instruments) and has last manufactured, produced, acquired or imported all or substantially all of its property (other than property having a nominal value and financial instruments) for consumption, use or supply exclusively in the course of commercial activities of the registrant,
(ii) the registrant has no property (other than property having a nominal value and financial instruments) and has made supplies and all or substantially all of the supplies made by the registrant are taxable supplies, or
(2) The portion of subparagraph (c)(iii) of the definition qualifying member in subsection 156(1) of the Act before clause (A) is replaced by the following:
(iii) the registrant has no property (other than property having a nominal value and financial instruments) and has not made taxable supplies and it is reasonable to expect that
(3) Clause (c)(iii)(C) of the definition qualifying member in subsection 156(1) of the Act is replaced by the following:
(C) all or substantially all of the property (other than property having a nominal value and financial instruments) to be manufactured, produced, acquired or imported by the registrant within the next 12 months will be for consumption, use or supply exclusively in the course of commercial activities of the registrant. (membre admissible)
(4) Subparagraph (f)(ii) of the definition temporary member in subsection 156(1) of the Act is replaced by the following:
(ii) the supplied property includes property that is neither property having a nominal value nor a financial instrument, and
(5) The portion of subparagraph (f)(iii) of the definition temporary member in subsection 156(1) of the Act before clause (A) is replaced by the following:
(iii) all or substantially all of the supplied property (other than property having a nominal value and financial instruments)
4 (1) Paragraphs 164.1(1)(b) and (c) of the Act are replaced by the following:
(b) feed that is a complete feed, premix, specialty feed, supplement or mineral feed (other than a trace mineral salt feed), the supply of which in bulk quantities of at least 20 kg would be a zero-rated supply included in Part IV of Schedule VI; and
(c) by-products of the food processing industry and plant, fungus or animal products, the supply of which in bulk quantities of at least 20 kg would be a zero-rated supply included in Part IV of Schedule VI.
(2) Paragraph 164.1(1)(b) of the Act, as enacted by subsection (1), is deemed to have come into force on June 17, 2024.
(3) Paragraph 164.1(1)(c) of the Act, as enacted by subsection (1), is deemed to have come into force on the day after Announcement Date.
5 The portion of subsection 168(7) of the Act after paragraph (b) is replaced by the following:
a part of the consideration for the supply pending full and satisfactory performance of the supply, or any part thereof, tax under this Division, calculated on the value of that part of the consideration, is payable on the earlier of the day that part is paid and the day it becomes due.
6 (1) Section 170 of the Act is amended by adding the following after subsection (2):
Marginal note:Restriction — reverse charge supplies
(3) In determining an input tax credit of a registrant, no amount shall be included in respect of the tax payable by the registrant in respect of reverse charge supplies acquired by the registrant if the registrant is not registered under Subdivision D of Division V at the time the tax becomes payable or is paid without having become payable.
(2) Subsection (1) comes into force on the first day of the second month following the month in which the Act enacting that subsection receives royal assent.
7 The portion of subsection 178.3(2) of the French version of the Act before paragraph (a) is replaced by the following:
Marginal note:Idem
(2) Lorsque l'entrepreneur indépendant donné d'un démarcheur auquel le présent article s'applique du fait qu'une approbation du ministre à cet effet en est vigueur effectue au Canada la fourniture taxable par vente, sauf une fourniture détaxée, d'un produit exclusif du démarcheur et que l'entrepreneur n'est pas un distributeur à l'égard duquel l'approbation accordée en application du paragraphe 178.2(4), à la suite de la demande faite conjointement avec le démarcheur, est alors en vigueur ou entre en vigueur immédiatement après la fourniture, les règles suivantes s'appliquent si le paragraphe (1) s'est appliqué à une fourniture antérieure du produit ou si le paragraphe 178.5(1) s'est déjà appliqué au produit :
8 (1) Subsection 221(2.1) of the Act is replaced by the following:
Marginal note:Exception — emission allowance
(2.1) A supplier (other than a prescribed supplier) that makes a taxable supply of an emission allowance, or of a property or service that is prescribed for the purposes of subsection 228(4), is not required to collect tax under Division II payable by the recipient in respect of the taxable supply.
Marginal note:Exception — reverse charge supplies
(2.2) A supplier (other than a prescribed supplier) that makes a taxable supply of reverse charge supplies is not required to collect tax under Division II payable by the recipient in respect of the taxable supply if the recipient is registered under Subdivision D at the time the tax becomes payable or is paid without having become payable.
(2) Subsection (1) comes into force on the first day of the second month following the month in which the Act enacting that subsection receives royal assent.
9 (1) Section 223 of the Act is amended by adding the following after subsection (1.3):
Marginal note:Disclosure of tax — reverse charge supplies
(1.4) If a registrant makes a taxable supply of reverse charge supplies, or of a property or service that is prescribed for the purposes of subsection 228(4), and is not required to collect the tax payable in respect of the taxable supply, the registrant must indicate to the recipient, either in prescribed manner or in the invoice or receipt issued to, or in an agreement in writing entered into with, the recipient in respect of the taxable supply,
(a) the consideration paid or payable by the recipient for the taxable supply; and
(b) that the tax payable in respect of the taxable supply is to be paid to the Receiver General by the recipient.
(2) Subsection (1) comes into force on the first day of the second month following the month in which the Act enacting that subsection receives royal assent.
10 (1) The portion of subsection 228(4) of the Act before paragraph (b) is replaced by the following:
Marginal note:Real property and emission allowance — self-assessment
(4) If tax under Division II is payable by a person in respect of a supply of property that is real property or an emission allowance or a supply of a prescribed property or service and the supplier is not required to collect the tax and is not deemed to have collected the tax,
(a) if the person is a registrant and acquired the property or service for use or supply primarily in the course of commercial activities of the person, the person shall, on or before the day on or before which the person's return for the reporting period in which the tax became payable is required to be filed, pay the tax to the Receiver General and report the tax in that return; and
(2) Section 228 of the Act is amended by adding the following after subsection (4):
Marginal note:Reverse charge supplies — self-assessment
(5) If tax under Division II is payable by a person in respect of a supply of reverse charge supplies and the supplier is not required to collect the tax and is not deemed to have collected the tax, the person shall, on or before the day on or before which the person's return for the reporting period in which the tax became payable is required to be filed, pay the tax to the Receiver General and report the tax in that return.
(3) Subsections (1) and (2) come into force on the first day of the second month following the month in which the Act enacting those subsections receives royal assent.
11 (1) The portion of subsection 261(2.1) of the Act before paragraph (a) is replaced by the following:
Marginal note:Restriction — emission allowance and reverse charge supplies
(2.1) A rebate in respect of an amount paid in respect of a supply of an emission allowance, a supply of reverse charge supplies or a supply of a property or service that is prescribed for the purposes of subsection 228(4) is not to be paid under subsection (1) to a person unless
(2) Subsection (1) comes into force on the first day of the second month following the month in which the Act enacting that subsection receives royal assent.
12 Paragraphs 274(5)(a) and (b) of the French version of the Act are replaced by the following:
a) tout crédit de taxe sur les intrants et toute déduction dans le calcul de la taxe ou de la taxe nette payable peut être en totalité ou en partie admis ou refusé;
b) tout ou partie de ce crédit ou de cette déduction peut être attribué à une personne;
13 Subsection 286(2) of the French version of the Act is replaced by the following:
Marginal note:Registres insuffisants
(2) Le ministre peut exiger que la personne qui ne tient pas les registres nécessaires à l'application de la présente partie tienne ceux qu'il précise. Dès lors, la personne est tenue d'obtempérer.
14 (1) Section 295 of the Act is amended by adding the following after subsection (6.1):
Marginal note:Disclosure of registration status
(6.2) On being provided by any person with a number, an official may provide to the person confidential information specifying whether or not the number is a business number described in paragraph (a) or (a.1) of the definition business number in subsection (1) and, if it is such a business number, any of the following confidential information:
(a) the name of (including any trade name or other name used by) the holder of the business number;
(b) under which of either Subdivision E of Division II or Subdivision D of Division V the business number was assigned and the effective date of the registration of the holder of the business number; and
(c) if the registration under the business number has been cancelled, the date on which the cancellation became effective.
(2) Subsection (1) comes into force on the day on which the Act enacting that subsection receives royal assent.
15 (1) Paragraph 298(1)(b) of the Act is replaced by the following:
(b) in the case of an assessment of tax payable by the person under Division II in respect of a supply to which any of subsections 221(2) to (2.2) applies, more than four years after the later of the day on or before which the person was required to file the return in which that tax was required to be reported and the day the return was filed;
(2) Subsection (1) comes into force on the first day of the second month following the month in which the Act enacting that subsection receives royal assent.
16 Subsection 301(5) of the Act is replaced by the following:
Marginal note:Notice of decision
(5) After reconsidering an assessment under subsection (3) or confirming an assessment under subsection (4), the Minister shall send notice of the Minister's decision in writing to the person objecting.
17 (1) Subsection 303(5) of the Act is replaced by the following:
Marginal note:Duties of Minister
(5) On receipt of an application made under subsection (1), the Minister shall, with all due dispatch, consider the application and grant or refuse it, and shall notify the person of the decision in writing.
(2) Subsection 303(6) of the English version of the Act is replaced by the following:
Marginal note:Date of objection if application granted
(6) If an application made under subsection (1) is granted, the notice of objection or the request shall be considered to have been filed on the day the decision of the Minister is sent to the person.
18 The portion of subsection 304(1) of the English version of the Act after paragraph (b) is replaced by the following:
but no application under this section may be made after the expiration of thirty days after the day the decision has been sent to the person under subsection 303(5).
19 Subsection 332(2) of the French version of the Act is replaced by the following:
Marginal note:Deux infractions ou plus
(2) Toute dénonciation ou plainte à l'égard d'une infraction aux dispositions de la présente partie peut viser une ou plusieurs infractions. Les dénonciations, plaintes, mandats, déclarations de culpabilité ou autres procédures dans une poursuite intentée en vertu de la présente partie ne sont ni susceptibles d'opposition ni insuffisants du fait que deux infractions ou plus sont visées.
20 (1) Section 2 of Part IX of Schedule VI to the Act is amended by striking out "and" at the end of paragraph (c) and by adding the following after that paragraph:
(c.1) where the policy is a policy in respect of tangible personal property, it relates to tangible personal property that is situated primarily outside Canada;
(c.2) where the policy is a policy in respect of intangible personal property, it relates to intangible personal property that can be used only outside Canada; and
(2) Subsection (1) is deemed to have come into force on Announcement Date.
Part 2Draft Amendments to the Excise Act, 2001
21 Subsection 195(10) of the Excise Act, 2001 is replaced by the following:
Marginal note:Notice of decision
(10) After reconsidering an assessment under subsection (8) or confirming an assessment under subsection (9), the Minister shall send notice of the Minister's decision in writing to the person objecting.
22 Subsection 196(5) of the Act is replaced by the following:
Marginal note:Duties of Minister
(5) On receipt of an application, the Minister shall, without delay, consider the application and grant or refuse it, and shall notify the person of the decision in writing.
23 Subsection 197(2) of the English version of the Act is replaced by the following:
Marginal note:When application may not be made
(2) No application may be made after the expiry of 30 days after the decision referred to in subsection 196(5) was sent to the person.
24 Subsection 206(6) of the French version of the Act is replaced by the following:
Marginal note:Registres insuffisants
(6) Le ministre peut exiger par écrit que la personne qui ne tient pas les registres nécessaires à l'application de la présente loi tienne ceux qu'il précise. Dès lors, la personne est tenue d'obtempérer.
25 Subsection 229(2) of the French version of the Act is replaced by the following:
Marginal note:Deux infractions ou plus
(2) Toute dénonciation ou plainte à l'égard d'une infraction à la présente loi peut viser une ou plusieurs infractions. Les dénonciations, plaintes, mandats, déclarations de culpabilité ou autres procédures dans une poursuite intentée en vertu de la présente loi ne sont ni susceptibles d'opposition ni insuffisants du fait que deux infractions ou plus sont visées.
Part 3Draft Amendments to the Air Travellers Security Charge Act
26 The portion of subsection 15(4) of the English version of the Air Travellers Security Charge Act before paragraph (a) is replaced by the following:
Marginal note:Extension of trust
(4) Despite any other provision of this Act, any other enactment of Canada (except the Bankruptcy and Insolvency Act), any enactment of a province or any other law, if at any time an amount deemed by subsection (1) to be held by a person in trust for His Majesty is not remitted to the Receiver General or withdrawn in the manner and at the time provided under this Act, property of the person and property held by any secured creditor of the person that, but for a security interest, would be property of the person, equal in value to the amount so deemed to be held in trust, is deemed
27 Subsection 37(5) of the French version of the Act is replaced by the following:
Marginal note:Registres insuffisants
(5) Le ministre peut exiger par écrit que la personne qui ne tient pas les registres nécessaires à l'application de la présente loi tienne ceux qu'il précise. Dès lors, la personne est tenue d'obtempérer.
28 Subsection 43(10) of the Act is replaced by the following:
Marginal note:Notice of decision
(10) After reconsidering an assessment under subsection (8) or confirming an assessment under subsection (9), the Minister shall notify the person objecting to the assessment of the Minister's decision in writing.
29 Subsection 44(5) of the Act is replaced by the following:
Marginal note:Duties of Minister
(5) On receipt of an application, the Minister shall, without delay, consider the application and grant or refuse it, and shall notify the person of the decision in writing.
30 Subsection 45(2) of the English version of the Act is replaced by the following:
Marginal note:When application may not be made
(2) No application may be made after the expiry of 30 days after the decision referred to in subsection 44(5) was sent to the person.
31 Subsection 69(2) of the French version of the Act is replaced by the following:
Marginal note:Deux infractions ou plus
(2) Toute dénonciation ou plainte à l'égard d'une infraction à la présente loi peut viser une ou plusieurs infractions. Les dénonciations, plaintes, mandats, déclarations de culpabilité ou autres procédures dans une poursuite intentée en vertu de la présente loi ne sont ni susceptibles d'opposition ni insuffisants du fait que deux infractions ou plus sont visées.
Part 4Draft Amendments to the Select Luxury Items Tax Act
32 Subsection 129(2) of the French version of the Select Luxury Items Tax Act is replaced by the following:
Marginal note:Deux infractions ou plus
(2) Toute dénonciation ou plainte à l'égard d'une infraction à la présente loi peut viser une ou plusieurs infractions. Les dénonciations, plaintes, mandats, déclarations de culpabilité ou autres procédures dans une poursuite intentée en vertu de la présente loi ne sont ni susceptibles d'opposition ni insuffisants du fait que deux infractions ou plus sont visées.
PART 5Draft Amendments to Various Regulations
DIVISION 1Games of Chance (GST/HST) Regulations
33 (1) Section 3 of the Games of Chance (GST/HST) Regulations is amended by adding the following after paragraph (d):
(d.1) iGaming Ontario;
(2) Paragraphs 3(i) and (j) of the Regulations are replaced by the following:
(i) the Lotteries and Gaming Saskatchewan Corporation;
(3) Subsection (1) is deemed to have come into force on July 6, 2021.
(4) Subsection (2) is deemed to have come into force on June 1, 2023.
DIVISON 2Agriculture and Fishing Property (GST/HST) Regulations
34 (1) The Agriculture and Fishing Property (GST/HST) Regulations are amended by adding the following after section 2:
3 Property that is described in subsection 1(5) of the schedule, when supplied by way of lease, licence or similar arrangement, is prescribed property for the purposes of section 10 of Part IV of Schedule VI to the Excise Tax Act.
(2) Subsection (1) is deemed to have come into force on the day after Announcement Date.
35 (1) Paragraph 1(2)(a) of the Schedule to the Regulations is replaced by the following:
(a) is a complete feed, premix, specialty feed, supplement or mineral feed (other than a trace mineral salt feed), as those terms are defined in the Feeds Regulations, 2024,
(2) Subsection 1(3) of the Schedule to the Regulations is replaced by the following:
(3) By-products of the food processing industry and plant, fungus or animal products, when sold in bulk quantities of at least 20 kg (44 lbs) or in bags that contain at least 20 kg (44 lbs), that are ordinarily used as feed, or as ingredients in feed, for farm livestock, fish or poultry described in subparagraph (2)(c)(i) or for rabbits, ostriches, rheas, emus or bees.
(3) Subsection (1) is deemed to have come into force on June 17, 2024.
(4) Subsection (2) is deemed to have come into force on the day after Announcement Date.
DIVISION 3Federal Book Rebate (GST/HST) Regulations
36 The schedule to the Federal Book Rebate (GST/HST) Regulations is amended by adding the following in alphabetical order :
Wonderful World of Books
DIVISION 4Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations
37 (1) Subsection 24(3) of the Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations is amended by striking out "and" at the end of paragraph (c) and by adding the following after that paragraph:
(c.1) if the policy is a policy in respect of tangible personal property, the policy relates to tangible personal property that is situated primarily outside Canada;
(c.2) if the policy is a policy in respect of intangible personal property, the policy relates to intangible personal property that can be used only outside Canada; and
(2) Subsection (1) applies in respect of any reporting period of a person that ends after Announcement Date.