Fuel charge registration in Canada

Who has to register

For purposes of the fuel charge, you may be required or permitted to register with the CRA under the Greenhouse Gas Pollution Pricing Act.

The fuel charge began to apply April 1, 2019 in certain provinces and territories.  The Government of Canada made regulations and published them in Part II of the Canada Gazette on August 21, 2019.  The Regulations implemented the fuel charge in Alberta effective January 1, 2020.

Persons that have business activities in a listed province (Alberta, Manitoba, Nunavut, Ontario, Saskatchewan, or Yukon), such as producers, distributors, importers, emitters, certain users of fuel, or combustible waste, as well as persons that are air, marine, rail, or road carriers, may have to register for one or more of the following types of registration:

  • distributor
  • importer
  • emitter
  • user of fuel
  • user of combustible waste
  • air carrier
  • specified air carrier
  • marine carrier
  • specified marine carrier
  • rail carrier
  • specified rail carrier
  • road carrier

To find out if you are required or permitted to register, see Fuel Charge Notice FCN1, Registration Under the Greenhouse Gas Pollution Pricing Act. Should you have technical enquiries with respect to the application of the Greenhouse Gas Pollution Pricing Act, contact one of the regional excise offices at Contact Information – Excise Duties, Excise Taxes, Fuel Charge and Air Travellers Security Charge.

When to register

You can submit your fuel charge registration forms electronically or by mail.

If your registration is mandatory:

  • you were required to register before April 1, 2019 if your business activities are in Manitoba, New BrunswickFootnote1 , Ontario, or Saskatchewan
  • you were required to register before July 1, 2019 if your business activities are in Nunavut, or Yukon
  • you were required to register before January 1, 2020 if your business activities are in Alberta

If you are a new business with activities in one of the listed provinces and registration is mandatory, you must register immediately.

For more information, see New registrants.

If your registration is voluntary, you may register at any time.

The processing of your application may take up to 30 calendar days from the date we receive it.

New registrants

If you are a new registrant with the fuel charge program and do not have a fuel charge account number, follow the instructions on How to register to complete your registration.

Registered emitter

If you are registered as an emitter under Part 1 of the Greenhouse Gas Pollution Pricing Act for certain covered facilities, and you wish to register additional facilities covered under either a provincial program, or under the opt-in program with Environment and Climate Change Canada, and you wish to register those facilities under the CRA’s fuel charge program, you will need to fill out Form L400, Fuel Charge Registration and file it with the related schedule for emitters.  A separate registration letter with a new registration account will be provided, which can be used to complete your exemption certificate for those newly registered facilities.

You will be required to provide a new exemption certificate for this new registration to cover newly added facilities.   The Fuel Charge Registry tool found in My Business Account can be used to confirm the status and registration type of a fuel charge account. For more information on exemption certificates, see Fuel charge relief.

Filing separate returns

If you are already registered for the fuel charge program and want to report your fuel charge activities by branch or division, you may do so by submitting a separate Form L400, Fuel Charge Registration, to identify each branch or division along with Form L400-1, Fuel Charge Registration Schedule, or Form L400-2, Fuel Charge Registration Schedule – Road Carrier, or both, depending on the type of registration for which you are applying.

See Fuel Charge Notice FCN1, Registration Under the Greenhouse Gas Pollution Pricing Act, for more information.

Consequence of not registering on time

If you fail to register, when required, by the due date, you are liable to pay a penalty of $2,000.

How to register

To register for the fuel charge program, use Form L400, Fuel Charge Registration.

If you have activities in more than one listed province, only one registration application is needed.

To indicate your registration type(s) and the type(s) of fuel that you use, transfer, deliver, divert, bring into, import in, or produce, and any combustible waste burned in each listed province, attach Form L400-1, Fuel Charge Registration Schedule to your L400, Fuel Charge Registration.

If you are required to register as a road carrier, attach Form L400-2, Fuel Charge Registration Schedule – Road Carrier to your L400, Fuel Charge Registration.

If you are a non-resident that keeps records outside Canada, attach Form L400-3 Non-Resident – Records kept outside Canada to your L400, Fuel Charge Registration.

If you are a non-resident and are required to register for the fuel charge, see Fuel charge information for non-resident applicants.

The processing of the fuel charge registration may be delayed in the case of missing or incomplete information.

Registration forms can be submitted electronically using the “Submit documents” function in My Business Account. If you submit your registration electronically, you will be provided with the confirmation number of your submission. This confirmation number should be retained for follow up on the status of your application if required.

You can also send your completed forms by mail to the following address:

Sudbury Tax Centre
Fuel Charge Program
Post Office Box 20000, Station A
Sudbury ON  P3A 5C1

After you submit your application

When your registration is processed, the CRA will advise you of your registration number and effective date of registration. You may also login to My Business Account to view the registration information and this will allow you to view your registration confirmation letter.

History of taxation in Canada

Taxes are mandatory payments by individuals and corporations to government. They are levied to finance government services, redistribute income, and influence the behavior of consumers and investors. The Constitution Act, 1867 gave Parliament unlimited taxing powers and restricted those of the provinces to mainly direct taxation (taxes on income and property, rather than on activities such as trade). Personal income tax and corporate taxes were introduced in 1917 to help finance the First World War. The Canadian tax structure changed profoundly during the Second World War. By 1946, direct taxes accounted for more than 56 per cent of federal revenue. The federal government introduced a series of tax reforms between 1987 and 1991; this included the introduction of the Goods and Services Tax (GST). In 2009, the federal, provincial and municipal governments collected $585.8 billion in total tax revenues.

Taxing Powers

The first recorded tax in Canada appears to date back to 1650. An export tax of 50 per cent on all beaver pelts, and 10 per cent on moose hides, was levied on the residents of New France.

Today, of the various methods available for financing government activities, only taxation payments are mandatory. Taxes are imposed on individuals, business firms and property. They are used to finance public services or enable governments to redistribute resources. Taxation allows governments to increase expenditures without causing price inflation, because private spending is reduced by an equivalent amount.

The Constitution Act, 1867 gave Parliament unlimited taxing powers. It also restricted those of the provinces to mainly direct taxation (taxes on income and property, rather than on activities such as trade). The federal government was responsible for national defence and economic development; the provinces for education, health, social welfare and local matters which then involved only modest expenditures. (See Distribution of Powers.) The provinces needed access to direct taxation mainly to enable their municipalities to levy property taxes.

Early 20th Century

For more than 50 years after Confederation, customs and excise duties provided the bulk of federal revenues; by 1913, they provided more than 90 per cent of the total. In 1917, however, to help finance the First World War, Parliament introduced personal income tax and corporate taxes. In 1920, a manufacturers’ sales tax and other sales taxes were also introduced.

Provincial revenue at this time came primarily from licences and permits; as well as the sales of commodities and services. In addition, the provinces received substantial federal subsidies. (See also Transfer Payments.) They hesitated to impose direct taxes; but by the late 1800s, they were taxing business profits and successions. Taxes on real and personal property were the bulwark of local government finance. By 1930, total municipal revenues surpassed those of the federal government.

The Great Depression bankrupted some municipalities and severely damaged provincial credit. Customs and excise duties declined by 65 per cent from 1929 to 1934. Parliament resorted more to personal and corporate taxation; it also raised sales taxes dramatically. Before the Depression was over, all provinces were taxing corporate income. All but two provinces levied personal income taxes, and two had retail sales taxes.

Second World War

The Canadian tax structure changed profoundly during the Second World War. To distribute the enormous financial burden of the war equitably, to raise funds efficiently and to minimize the impact of inflation, the major tax sources were gathered under a central fiscal authority. In 1941, the provinces agreed to surrender the personal and corporate income tax fields to the federal government for the duration of the war and for one year after. In exchange, they received fixed annual payments. (See Transfer Payments.) In 1941, the federal government introduced succession duties (on the transfer of assets after death). An excess profits tax was imposed. Other federal taxes increased drastically.

By 1946, direct taxes accounted for more than 56 per cent of federal revenue. The provinces received grants, and the yields from gasoline and sales taxes increased substantially. The financial position of the municipalities improved with higher property tax yields. In 1947, contrary to the 1942 plan, federal control was extended to include succession duties as well. However, Ontario and Quebec opted out; they chose to operate their own corporate income tax procedures. There was public pressure for federal action in many areas. The White Paper on Employment and Income advocated federal responsibility for these areas.

As a result, direct taxes became a permanent feature of federal finance. But the provinces also have a constitutional right to these taxes. There is a growing demand for services under provincial jurisdiction; such as health, education and social welfare. The difficulties of reconciling the legitimate claims of both levels of government for income taxation powers have since dominated many federal-provincial negotiations.

Late 20th Century

From 1947 to 1962, the provinces, with mounting reluctance, accepted federal grants as a substitute for levying their own direct taxes. In 1962, however, Ottawa reduced its own personal and corporate income tax rates to make tax room available to the provinces. Because taxpayers would pay the same total amount, provincial tax rates would not be risky politically. Further federal concessions between 1962 and 1977 raised the provincial share of income tax revenues significantly.

Provincial income tax calculations were traditionally integrated into federal tax returns. All provinces except Quebec used the federal definition of taxable income. (Quebec has operated its own income tax since 1954.) Provincial tax rates, which now differ considerably among the provinces, were simply applied to basic federal tax. In recent years, that trend has been weakening. For example, in Ontario, personal income tax payable is now calculated separately from federal income tax payable.

Principles of Taxation

Fairness

The criteria by which a tax system is judged include equity; efficiency; economic growth; stabilization; and ease of administration and compliance. According to one view, taxes, to be fair, should be paid in accordance with the benefits received. But the difficulty of assigning the benefits of certain government expenditures — such as defence — restricts the application of this principle. Provincial gasoline taxes are one instance of the benefit principle, with fuel taxes providing revenue for roads and highways.

According to another view, individuals should be taxed based on their ability to pay (typically indicated by income). The personal income tax is in part a reflection of this principle. Horizontal equity (individuals with equal incomes are treated equally) is not easily achieved; this is because income alone is an imperfect measure of an individual’s ability to pay.

Vertical equity (higher incomes are taxed at higher rates than lower incomes — a principle not at odds with horizontal equity) has been opposed by business and those with higher incomes. They claim that progressive tax rates discourage initiative and investment. At the same time, under a progressive tax system, deductions benefit those with high taxable incomes. In recent years, this realization has led governments to convert many deductions to tax credits. However, this significantly complicates the tax preparation process.

Limiting Growth

Taxes can affect the rate of economic growth as well. Income taxes limit capital accumulation. Corporate and capital taxes reduce capital investment. Payroll taxes reduce job creation. Businesses in Canada have strongly opposed the full inclusion of corporate gains as taxable income. As a result, only 50 per cent of capital gains were taxable when the capital gains tax was introduced in 1972. The inclusion rate for capital gains was raised to 75 per cent by 1990. It was cut back to 50 per cent in 2000.

Shifting and Incidence

Taxes levied on some persons but paid ultimately by others are “shifted” forward to consumers wholly or partly by higher prices; or, they are “shifted” backward on workers if wages are lowered to compensate for the tax. Some part of corporate income taxes, federal sales and excise taxes, payroll taxes and local property taxes is shifted. This alters and obscures the final distribution of the tax burden.

Revenue Elasticity

The more elasticity (the percentage change in tax revenue resulting from a change in national income) a tax has, the greater its contribution to economic stabilization policy. Income taxes with fixed monetary exemptions and rate brackets have an automatic stabilization effect. This is because tax collections will grow faster than income in times of economic growth; conversely, they will fall more sharply than income in a recession.

In Canada, the revenue elasticity of personal income tax is weakened by indexing. Since 1974, both personal exemptions and tax brackets have been adjusted according to changes in the Consumer Price Index. But sales taxes have less revenue elasticity because consumption changes less rapidly in response to changes in income, and these taxes are not progressive in relation to consumption. Property tax yields do not grow automatically with rising national income; but they do exhibit some revenue elasticity.