Vol. 144, No. 10 — May 12, 2010

Registration

SOR/2010-88 April 22, 2010

CUSTOMS TARIFF

Renewable Fuel Used as Ships’ Stores Remission Order

P.C. 2010-484 April 22, 2010

Her Excellency the Governor General in Council, on the recommendation of the Minister of Public Safety and Emergency Preparedness, pursuant to section 115 (see footnote a) of the Customs Tariff (see footnote b), hereby makes the annexed Renewable Fuel Used as Ships’ Stores Remission Order.

RENEWABLE FUEL USED AS SHIPS’ STORES REMISSION ORDER

INTERPRETATION

1. In this Order, “renewable fuel” includes fuel that is produced from biomass, waste material or feedstock of biological origin, whether or not the fuel is blended with a petroleum product.

REMISSION

2. Remission is granted of the customs duties paid or payable under the Customs Tariff in respect of renewable fuels that are imported into Canada during the period beginning on April 1, 2006 and ending on June 17, 2009 and that are laden on board a conveyance for use as ships’ stores.

CONDITIONS

3. The remission is granted on the following conditions:

(a) the renewable fuels are either released and subsequently exported in the same condition in which they were imported or released, processed in Canada and subsequently exported;

(b) the conveyance on board of which the renewable fuels are laden for use is one set out in column I of the schedule to the Ships’ Stores Regulations, as it read on June 17, 2009 for the purposes of the Customs Tariff, and any limits, set out in the notes to that schedule, that are applicable to petroleum products with respect to that conveyance are met or not exceeded, as the case may be;

(c) a written claim for remission is made by the importer to the Minister of Public Safety and Emergency Preparedness within two years after the day on which this Order comes into force;

(d) the importer provides the Canada Border Services Agency with evidence or information that demonstrates that they are entitled to remission under this Order; and

(e) no claim for refund or drawback under the Customs Act or Customs Tariff has been made with respect to the customs duties paid or payable in respect of the renewable fuels in question.

COMING INTO FORCE

4. This Order comes into force on the day on which it is registered.

REGULATORY IMPACT
ANALYSIS STATEMENT

(This statement is not part of the Order.)

Issue and objectives

Formerly, the Customs Tariff together with the Ships’ Stores Regulations only granted relief from customs duties and excise taxes for certain petroleum products and diesel fuels imported into Canada, laden onboard qualifying conveyances and used as ships stores. However, this relief was not granted for renewable fuels, such as ethanol and biodiesel. With the recent amendments to the Ships’ StoresRegulations, duty and tax relief has been extended to renewable fuels used as ships’ stores.

The objective of the Renewable Fuel Used as Ships’ Stores Remission Order is to provide relief from the duties collected on renewable fuels imported into Canada during the period commencing on April 1, 2006 and ending on June 17, 2009, and subsequently laden on board a qualifying conveyance for use as ships’ stores. The Order will allow renewable fuels imported under these circumstances to be eligible for the same relief in customs duties as was granted to petroleum based fuels for that period.

Description and rationale

The Ships’ Stores Regulations, which are made jointly under the authority of the Customs Tariff and the Excise Tax Act, designate certain classes of goods as ships’ stores for use onboard qualifying conveyances. Such classes of goods are generally eligible for relief from customs duties and excise taxes. Until recently, the Ships’ Stores Regulations only granted relief from customs duties and excise taxes on certain petroleum products and diesel fuels, but did not extend relief to renewable fuels. However, the Ships’ Stores Regulations were recently amended to qualify “renewable fuels” as eligible for relief when used as ships’ stores. This amendment is a result of emerging technological advances and market changes which have seen a gradual conversion from petroleum-based fuels to renewable fuels on certain marine vessels. The amendment ensures that those in the industry using the renewable fuels will not be placed at a competitive disadvantage.

The Order would remit customs duties on renewable fuels used in the manner of ships’ stores paid or payable between April 1, 2006 (the beginning of the fiscal year in which industry groups brought to light that renewable fuels, imported for this purpose, were receiving different treatment under the Customs Tariff than petroleum fuels used in the same manner) and ending on June 17, 2009, the day before the date of registration of the Regulations Amending the Ships’ Stores Regulations (2009). The Order would remit an estimated $8 million of customs duties levied on renewable fuels that were imported into Canada, laden onboard qualifying conveyances and used in the manner of ships’ stores during that period.

Consultation

The CBSA has consulted with the Canada Revenue Agency and the Department of Finance. There is unanimous support for the Order. This Order also has the support of the cruise ship industry.

Contact

Rod McKenzie
Senior Program Advisor
Tariff Policy Division
Trade Programs Directorate
Admissibility Branch
Canada Border Services Agency
150 Isabella Street, 8th Floor
Ottawa, Ontario
K1A 0L8
Telephone: 613-954-6898

Footnote a
S.C. 2005, c. 38, par. 145(2)(j)

Footnote b
S.C. 1997, c. 36

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