FT 2-99, July 1999

Part I
Minister's Consent and Conditions and Restrictions of Consent regarding the Colouring of Fuel Destined for Export from Canada

Recent amendments to the Act provided statutory underpinning for the administrative practice which had been developed regarding the colouring of fuel destined for export from Canada. The administrative practice was set forth in PART I of Information Bulletin FTA 98-1, entitled NOTICE TO REGISTERED DYERS under the Fuel Tax Act.

The recent amendments are contained in subsections 4.18(4.1), (4.2) and (4.3) of the Act. The amendments provide, among other things, that the Minister of Revenue (Minister) may consent to manual blending of dye with fuel and to a higher concentration of dye to fuel than is normally permitted under the Act. As well, the amendments provide that the Minister may impose conditions and restrictions when granting such consent. The substance of the Consent and Conditions and Restrictions of Consent which has been issued pursuant to the amendments remains the same as the administrative practice set forth in Bulletin FTA 98-1.

With respect to the colouring of fuel destined for export from Canada as referred to in subsections 4.18(4.1) and (4.2) of the Act, this bulletin constitutes the prior written consent, and the conditions and restrictions of consent, of the Minister for all registered dyers under the Act, until replaced or withdrawn by a subsequent Ontario Tax Bulletin or notice in writing to registered dyers.

The Consent and the Conditions and Restrictions of Consent are as follows:

1. This consent and the conditions and restrictions of consent relate only to fuel destined for export from Canada.
2. This consent and the conditions and restrictions remain valid until registered dyers are notified by a notice in writing or by an Ontario Tax Bulletin of the withdrawal of this consent or of changes in the conditions or restrictions on registered dyers.
3. Registered dyers are permitted to mix dye with clear fuel in concentrations greater than the 170 to 190 parts per million, as established by the Minister for fuel for use in Ontario, if the fuel is coloured for the purposes of export from Canada.
4. Registered dyers are permitted to manually blend dye with fuel without further ministry approval. An officer of the ministry need not be present.
5. Registered dyers shall report with their monthly return the quantity of fuel that has been coloured during the prior month for export from Canada and the quantity of dye used to colour such fuel.
6. Registered dyers shall pay to the Minister the cost of the dye referred to in clause (e) in accordance with subsection 4.18(4.3) of the Act. Payment shall be accounted for in the monthly collector return. The ministry shall advise registered dyers of the cost of the dye, which may vary from time to time based on the ministry's supply contracts. The cost of dye under existing supply agreements is $1.058 per litre at the date of this consent. The payment for the dye for each month shall be determined by a registered dyer by multiplying the quantity of dye used in that month in litres by $1.058 (or the price per litre then in effect) and shall be entered in line 36 of the collector return. Registered dyers should attach details regarding the adjustment to the return.
7. Registered dyers shall not use in Ontario or Quebec, nor sell for use in Ontario or Quebec, fuel coloured at concentrations outside the range of 170 to 190 parts per million.

Please note that coloured fuel exported to Quebec is excluded from the above arrangements because Ontario and Quebec have a Reciprocal Dye Agreement which circumvents the need for the above provisions.

Please note also that one litre containers are available for those registered dyers that might find this useful where it is necessary to add dye manually to fuel destined for export from Canada. Registered dyers may make arrangements with and payment directly to Jacklyn Industries Limited for the packaging of dye in one litre containers and the transportation of such dye. In this instance the registered dyer will be paying Jacklyn for the packaging and any transportation, but will continue to be responsible to the Minister for the payment of the dye so packaged.

Part II
Minister's Approval of Chemical Substances (dye) Which May be Used to Colour Fuel
Minister's Establishment of Dye Concentration
Minister's Establishment of Threshold for "coloured fuel" and "clear fuel"

Recent amendments to the Fuel Tax Act (Act) provided the Minister with authority to:

1. approve the chemical substances that may be used to colour fuel (in other words, the dye recipe),
2. establish the quantity of dye in proportion to fuel to be used to colour fuel (dye concentration), and
3. establish the quantity of dye for the purposes of the definitions of "clear fuel" and "coloured fuel" (threshold between clear and coloured fuel) in subsection 1(1) of the Act.

The Minister's authority to establish and approve these matters is in place of the previous requirement, which was to prescribe these matters by regulation.

The Minister has approved the dye recipe, established the dye concentration and established the threshold between clear and coloured fuel, all effective as of January 1, 1999.

A copy of the Minister's approval and establishment document is attached for reference and in satisfaction of the requirement at subsection 28.3(3) of the Act that "The Minister shall notify registered dyers of the matters approved or established under this section".

Although these matters have now been approved and established by the Minister, the substance of the requirements remains as it was when prescribed by regulation.

For further information, please write to the:

Ministry of Revenue
Tax Compliance Branch
33 King Street West
Oshawa ON  L1H 8H9
attn. Senior Manager, Audit and Inspection

• Toll-free: 1 866 ONT-TAXS (1 866 668-8297)
• Fax: 905 436-4511
• Teletypewriter (TTY): 1 800 263-7776

© Queen's Printer for Ontario, 1999

ISBN 0-7778-8932-3

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June 9, 1999

Dye Recipe and Concentration

Re: Fuel Tax Act (Act), s.1, s.28.3

4. The Minister of Revenue (Minister) has authority under subsection 28.3(1) of the Act to approve chemical substances that may be used to colour fuel.

5. The Minister has authority under subsection 28.3(1) of the Act to establish the quantity of dye in proportion to fuel to be used to colour the fuel.

6. The Minister has authority under subsection 28.3(2) of the Act to establish the quantity of dye for the purposes of the definitions of "clear fuel" and coloured fuel" in subsection 1(1) of the Act.

7. By written delegation dated the 30th day of May, 1994, given under the authority of subsections 64(1) and (3) of the Capital Investment Plan Act, 1993, S.O. 1993, c.23, the Minister authorized the Assistant Deputy Minister, Tax Division, to exercise those powers and perform those duties conferred or imposed on the Minister under all sections of the Act and Regulations. On January 1, 1998, Tax Division was renamed Tax Revenue Division.

8. Under the authority delegated to him, the Assistant Deputy Minister approves and establishes as follows:

   1. The chemical substances, requirements and specifications therefore, set out in subsections 1(8), (9), (10) and (11) of Regulation 464, R.R.O. 1990, as that regulation read on December 31, 1998, are approved as the chemical substances which may be used to colour fuel.
   2. The quantity of dye in proportion to fuel to be used to colour fuel for the purposes of the definitions of "colouring" and "colour" in section 1 of the Act is not less than 170 and more than 190 parts of dye per million parts of fuel (as set out in subsection 1(3) of Regulation 464, R.R.O. 1990, as that regulation read on December 31, 1998).
   3. The quantity of dye for the purposes of the definitions of "clear fuel" and "coloured fuel" in subsection 1(1) of the Act is 3.42 parts of dye per million parts of fuel (as set out in subsection 1(2) of Regulation 464, R.R.O. 1990, as that regulation read on December 31, 1998).
   4. Clauses 1, 2 and 3 are effective as of January 1, 1999.

 

ORIGINAL SIGNED BY
Roy A. Lawrie
Assistant Deputy Minister
Tax Revenue Division