Rights and Responsibilities of Collectors

Guide 103

Introduction

This guide explains the rights and responsibilities of collectors under the Debt Retirement Charge (DRC) program.

Collectors Defined

Collectors include:

distributors, retailers and others who sell or supply electricity to a user
the Independent Electricity Market Operator (IMO).

Registering

Starting May 1, 2002, all distributors and retailers of electricity must register with the Debt Retirement Charge program before selling or supplying electricity.

Charging and Collecting DRC

Collectors are required to charge and collect DRC from customers at the correct rate. Please refer to Guide 101 General Information for DRC rates.

When calculating DRC, round the amount to the nearest whole cent. If the calculation results in a half a cent or more, round up to the next cent.

Invoicing

On each invoice, separate the amount of DRC charged and describe this charge as the "Debt Retirement Charge" or "DRC". Include the following statement when charging DRC: " The debt retirement charge pays down the debt of the former Ontario Hydro".

Supporting Exempt Sales

You must retain Exemption Certificates or other required documentation to support exempt sales. Please refer to Guide 104 Exemption Certificates, Guide 108 Status Indians, Indian Bands and Band Councils for further information.

Metering

Collectors are required to meter electricity generated for own use or purchased exempt from DRC for own use.

There may be circumstances where installing a meter to measure electricity consumption is not feasible. The Ministry of Revenue may authorize a collector to estimate the consumption of electricity rather than install a meter. Please contact the Debt Retirement Charge program at the numbers listed at the end of this guide for more information.

Completing DRC Returns

When completing DRC returns for the period covered by the return, be sure to include:

DRC collectable on the sale or supply of electricity during the period covered by the return, whether or not the customer has paid for it in full
DRC payable on electricity which is consumed by you or by another person at your expense where it was purchased exempt of DRC or was self-generated. See Guide 102 Rights and Responsibilities of Self-Generating Users.

Filing DRC Returns

You are required to file completed returns and remit payment by cheque or money order payable to the Ontario Electricity Financial Corporation (OEFC) by the due date shown on the return. The cheque should be drawn in Canadian funds on a Canadian financial institution.

Returns must be filed even where there is no activity or DRC to report. If you do not receive a return, you are still required to provide the return information to the Ministry of Revenue, with payment, by the regular due date.

Changes to Your Business

You should notify the Ministry of Revenue of any changes such as:

a sale or discontinuance of the business
changes to the legal or trade name, address, or contact person
changes to the legal structure such as an amalgamation or the creation of, or changes to, a partnership
changes to the way the business sells, supplies or consumes electricity.

Directors' Liability

Directors of a corporation may be held jointly and severally liable for DRC owing if the corporation:

fails to collect DRC
collects DRC but does not remit it to the OEFC
fails to pay any interest or penalty relating to DRC.

Books and Records

You must keep books and records with enough information to support the amount of DRC charged, collected, payable and remitted.

You can keep records manually or electronically. Electronic records must be in a format that will provide an exact copy of the original.

Examples of Books and Records

Examples of records that you should keep include:

amount of electricity generated, purchased, acquired, sold or supplied
amount of DRC paid on purchases
amount of DRC collected on sales
amount of DRC payable on own use
amount of DRC remitted to the OEFC
amount of electricity consumed
names and addresses of suppliers
names and addresses of persons to whom you sold or supplied electricity.

Refunds

You may refund DRC collected if:

an error was made in calculating DRC
you are provided with information and/or documentation to support that the person is exempt from DRC and is entitled to a refund. Please see Guide 104 Exemption Certificates, Guide 108 Status Indians, and Indian Bands and Band Councils
the refund is requested within four years from the date the DRC was paid in error.

If you refund DRC, you may adjust your next DRC remittance or apply for a refund from the Ministry of Revenue. Adjustments or applications for refunds to the Ministry must be made within four years from the date you made the refund.

Download the "Request for Refund" form, or contact the Debt Retirement Charge Program at the numbers listed at the end of this guide.

Dispute Resolution

If you disagree with a DRC assessment, or a disallowance of a DRC refund, you may file a Notice of Objection with the Ministry of Revenue's Tax Appeals Branch within 180 days from the mailing date of the Notice of Assessment or Statement of Disallowance. To obtain a Notice of Objection form:

download the form Notice of Objection
call the Tax Appeals Branch at 1 866 ONT-TAXS (1 866 668-8297)
contact any Ontario Ministry of Revenue Tax Office
contact the Debt Retirement Charge Program at the numbers listed at the end of this guide.

Right to Appeal

If you are not satisfied with the Ministry's decision on the Notice of Objection, you may file a Notice of Appeal. The Notice of Appeal must be filed with the Superior Court of Justice and a copy of the Notice of Appeal served on the Minister of Revenue within 90 days from the date the Ministry's decision on the Notice of Objection was mailed.

Additional Information

DRC is governed by Part V.I of the Electricity Act, 1998 and Regulations 493/01 (Rates and Exemptions), 494/01 (Administration) and 160/99 (Definitions and Exemptions). Consult these documents for detailed information.

The information contained in this publication is only a guideline. For more information, please contact the Ontario Ministry of Revenue at 1 866 ONT-TAXS (1 866 668-8297) or visit our website at ontario.ca/revenue.

ISBN 0-7794-2870-6