Overview

Effective July 1 until June 30, 2024, the gasoline tax rate on unleaded gasoline will decrease from 14.7 cents per litre to 9.0 cents per litre and the fuel tax rate on clear diesel (including blended), clear kerosene and biodiesel will decrease from 14.3 cents per litre to 9.0 cents per litre. 

The Ministry of Finance has developed a credit adjustment process for retailers, wholesalers, collectors, and importers who may have inventories of gasoline and/or fuel for which tax was pre-paid at the higher rates.

Wholesalers who hold inventory purchased at the higher rate are required to record inventory amounts held at 12:01 a.m., on July 1, 2022, and submit this information to their supplier.

Wholesalers will also accept inventory reports from their dealers, issue credits and then apply to their supplier for the credit.

Preparing for the tax rate change

Ensure that the lower tax rate will be in effect in your systems from the beginning of July 1, 2022, until the end of June 30, 2024. 

Prepare to complete an inventory report of all eligible products you have on hand at 12:01 a.m. on July 1, 2022 and be ready to submit this information to your supplier.

Before the tax rate change, communicate with your dealers if you:

Your supplier may provide you similar requirements. 

Fuel and Gasoline Products Inventory Report

Dealers will use the ministry’s Fuel and Gasoline Products Inventory Report unless you have your own inventory report for them to use.  
If you create your own inventory report, include the following information:

  • The dealer’s:
    • legal name
    • business address
    • business number
    • supplier’s name
  • A description and quantity of tax-paid products on hand at the time of the tax rate decrease
  • The tax rate difference for each of those products (5.7 cents for gasoline and 5.3 cents for fuel)
  • The tax credit owed for each product 
  • The total tax credit claimed
  • Certification as displayed on the ministry’s Gasoline and Fuel Products Inventory Report form
  • A space for a signature, as well as the signatory’s printed name. Electronic signatures are acceptable.

You may accept inventory reports electronically.

If you have not received all the inventory reports from your dealers by October 1, 2022, you should contact the ministry at 1-866-668-8297 ext. 16011 for assistance. 

Completing your inventory report

At 12:01 a.m. on July 1, 2022, record inventory amounts of all eligible products you have on hand . This includes inventory in terminals, bulk plants, delivery trucks or any other location. 

Complete and submit the inventory report to your supplier as soon as possible.

Use the ministry’s Fuel and Gasoline Products Inventory Report unless your supplier has told you they have created their own inventory report for you to use.

Multiple locations 

You can consolidate your inventory from multiple locations on one inventory report, if all gasoline and/or fuel products are purchased from the same supplier.

Multiple suppliers 

If you have inventory from multiple suppliers, you should request a credit from each supplier based on the remaining volume of eligible product purchased from those suppliers.

If you cannot determine what product is from which supplier, then you may request a credit based upon the percentage of eligible products purchased from each supplier in the past 30 days.  

Consignment

If you have provided eligible products to dealers on a consignment basis, you must include that inventory on your own inventory report rather than having a dealer claim it on their report.

Crediting your dealers’ accounts

Receive inventory reports from dealers and apply credits to their accounts for their next purchase of gasoline or fuel products.

Reject any inventory reports from customers who you know are end users.

If you are unable to process a request from any of your dealers, you should inform your dealer of the reason you are unable to do so and ask them to contact the ministry at 1-866-668-8297 ext. 16011 for assistance. 

Getting your credit

After you submit your inventory report to your supplier, they may require some time to process your credit request. Once they do so, they will apply a credit to your account for you to use towards your next purchase of gasoline or fuel products.

You may ask for a payment instead of a credit if you recently switched suppliers.

If your supplier has recently gone out of business or refuses to provide you a credit or payment you believe you are entitled to, please call the ministry at 1-866-668-8297 ext. 16011 for assistance.  

Contact the ministry before December 15, 2022, if you have any concerns about receiving your credit or payment from your supplier. 

Fuel and Gasoline Products Summary Report

In some cases, there may be commercial sensitivity around sharing the inventory reports received from your dealers with your supplier. 

If this is the case, you may consolidate the information from those dealers onto a Fuel and Gasoline Products Summary Report.

You may then use this summary report, along with your own inventory report, to claim a credit from your supplier.

Record keeping

You must keep a copy of your Fuel and Gasoline Products Inventory Report and documentation in support of the report for a period of seven years.

You must also keep a copy of all Fuel and Gasoline Products Inventory Report(s) or Fuel and Gasoline Products Summary Report(s) you received from your dealers for a period of seven years.

HST guidance from the Canada Revenue Agency

If a registered supplier refunds an amount to a registered retailer or distributor (for example, the customer) the supplier has the option to refund or not refund the Harmonized Sales Tax (HST).

If a supplier refunds the gasoline and fuel tax including the HST to the customer, the supplier will be required to provide a credit note to the customer or the customer may issue a debit note to the supplier for the HST. The supplier will be able to deduct the amount of the HST paid to the customer when calculating its net tax for the period when the credit/debit note was issued.  The customer is required to add the amount of HST adjusted, refunded or credited when determining its net tax for the reporting period in which the credit/debit note was issued.

If the registered supplier does not refund the HST to the customer when the gasoline and fuel tax is refunded, then there are no HST consequences.  Specifically, as the customer was entitled to claim an input tax credit (for example, customer was allowed to claim a credit on their GST/HST return) for the amount initially paid for the gasoline/fuel, this means that the gasoline or fuel held as inventory by the customer would not have imbedded HST. Therefore there is no need to refund or credit the HST when the gasoline and fuel tax is refunded.

For more information about HST please contact the Canada Revenue Agency at 1-800-959-8287.

Contact us

For any questions regarding this program, please contact us:

Stay connected

For up-to-date information on changes about the gasoline and fuel tax programs please subscribe to the Ministry of Finance’s email alert service.

Definitions

Collector:
a person designated as a collector under the Gasoline Tax Act and/or Fuel Tax Act.
Dealer:
a person who purchases gasoline or fuel for resale. This could be either a retailer or wholesaler as set out in the glossary.
End user:
a person who purchases gasoline or fuel for their own use; they do not re-sell the product.
Eligible product:
gasoline or fuel for which an amount on account of tax has been pre-paid prior to the temporary tax decrease that will begin on July 1, 2022.
Fuel:
diesel, blended diesel, clear kerosene and biodiesel.
Gasoline:
unleaded gasoline and ethanol blended gasoline.
Importer:
a person who brings or causes to be brought into Ontario fuel or gasoline in bulk.
Retailer:
a person who purchases gasoline or fuel to sell to end users.
Supplier:
a person who sells gasoline or fuel to a wholesaler or retailer. This could be either a wholesaler or collector as set out in this glossary.
Wholesaler:
a person who purchases gasoline or fuel to sell for resale. Wholesalers may or may not be a designated collector. If the person is not a designated collector, all the person’s purchases of gasoline and/or fuel products include an amount equal to the tax for the purpose of resale.