Tobacco Tax Act, R.S.O. 1990, c. T.10

 

Tobacco Tax Act

R.S.O. 1990, CHAPTER T.10

Historical version for the period December 16, 2004 to March 8, 2005.

Disclaimer: This consolidation is not an official copy of the law because it is affected by one or more retroactive provisions which have not been incorporated into it. For information about the retroactive provisions, see S.O. 2005, chapter 31, Schedule 22, subsection 2 (2) and S.O. 2006, chapter 33, Schedule Z.9, subsection 11 (2).

Amended by:  1991, c. 48; 1992, c. 28, s. 1; 1993, c. 27, Sched.; 1994, c. 18, s. 8; 1996, c. 18, s. 19; 1996, c. 29, s. 32-34; 1997, c. 10, s. 42; 1997, c. 19, s. 25; 1997, c. 43, Sched. E; 1998, c. 5, s. 49; 1998, c. 34, ss. 105-110; 2000, c. 42, ss. 97-116; 2001, c. 8, ss. 244, 245; 2001, c. 23, ss. 219-243; 2002, c. 8, Sched. M; 2002, c. 22, ss. 192-194; 2003, c. 7, s. 18; 2004, c. 7, ss. 19-34; 2004, c. 31, Sched. 36.

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CONTENTS

Definitions

1. In this Act,

“acquire” means, in respect of tobacco, to obtain tobacco by any means, including through manufacturing; (“acquérir”)

“consumer” means any person who,

(a) in Ontario, purchases or receives delivery of tobacco, or

(b) in the case of a person ordinarily resident in Ontario or carrying on business in Ontario, brings into Ontario tobacco acquired outside Ontario,

for their own use or consumption or for the use or consumption by others at their expense, or on behalf of, or as the agent for, a principal who desires to acquire the tobacco for use or consumption by themself or other persons at their expense; (“consommateur”)

“customs officer” means an officer as defined in section 2 of the Customs Act (Canada) who is employed at a customs office in Ontario; (“agent des douanes”)

“dealer” means any person who in Ontario sells tobacco or offers or keeps tobacco for sale, either at wholesale or at retail; (“marchand”)

“designated warehouse” means a location designated by the Minister for the purpose of storing unmarked cigarettes; (“entrepôt désigné”)

“exporter” means, with reference to a particular date, a person who takes tobacco in bulk out of Ontario during the 12 consecutive months before that date, or causes it to be taken out of Ontario during that period, and who may be accountable for the tax on that tobacco to the jurisdiction receiving the tobacco; (“exportateur”)

“importer” means, with reference to a particular date, a person who brings tobacco in bulk into Ontario during the 12 consecutive months before that date or causes it to be brought into Ontario during that period; (“importateur”)

“indicium” means a prescribed word or mark or both, and “indicia” means more than one indicium; (“timbre”)

“interjurisdictional transporter” means the operator of a motor vehicle, the operator or shipping agent of record of a vessel, the operator of railway equipment on rails or the operator of an aircraft who engages in the transportation of tobacco in bulk and who operates for such purposes,

(a) one or more motor vehicles inside and outside Ontario to which number plates are attached as required by the Highway Traffic Act,

(b) one or more vessels under the Canada Shipping Act,

(c) railway equipment on rails in connection with and as part of a public transportation system inside and outside Ontario, or

(d) aircraft, the operator of which is approved as a carrier of goods or passengers under the Aeronautics Act (Canada) or regulations made thereunder, or the National Transportation Act, 1987 (Canada), or regulations made thereunder,

and includes the consignee or consignor of tobacco in bulk who is not the holder of a permit to mark cigarettes; (“transporteur interterritorial”)

“manufacturer” means a person who manufactures, fabricates or produces tobacco products for distribution, sale or storage in Ontario; (“fabricant”)

“marked cigarettes” means packages of cigarettes, cartons and cases that are marked or stamped with an indicium as required under the regulations; (“cigarettes marquées”)

“mark-point” means a location designated by the Minister for the purposes of marking cigarettes; (“station de marquage”)

“Minister” means the Minister of Finance; (“ministre”)

“motor vehicle” means a machine operated, propelled or driven otherwise than by muscular power; (“véhicule automobile”)

“operator” means, when used with reference to a motor vehicle other than a motor vehicle designed for use as a vessel, an aircraft or railway equipment operated on rails,

(a) the registered owner, provided the motor vehicle is not leased to another person or, if leased, that the period of the lease is less than thirty-one consecutive days, or

(b) the lessee, if the motor vehicle is leased for more than thirty consecutive days; (“utilisateur”)

“package” includes a box, tin or other container in which tobacco is sold at retail; (“paquet”)

“prescribed” means prescribed by the regulations; (“prescrit”)

“registered importer” means an importer to whom a registration certificate has been issued under this Act; (“importateur inscrit”)

“registered wholesaler” means a wholesaler to whom a wholesaler’s permit has been issued under this Act; (“grossiste inscrit”)

“regulations” means the regulations made under this Act; (“règlements”)

“retail dealer” means any person who sells tobacco to a consumer; (“détaillant”)

“retail sale” means a sale to a consumer; (“vente au détail”)

“tax” includes penalties and interest; (“taxe”)

“tear tape” means the pressure-sensitive plastic ribbon that is wrapped around a package of cigarettes to facilitate the opening of the cellophane wrapping that encloses the package; (“languette”)

“tear tape manufacturer” means a person who manufactures tear tape for use in respect of the manufacture or production of cigarettes in packages for sale in Ontario; (“fabricant de languettes”)

“tobacco” means tobacco in any form in which it is used or consumed, and includes snuff; (“tabac”)

“tobacco in bulk” means 10,000 or more cigarettes, 200 or more cigars, or ten kilograms or more of any tobacco, other than cigarettes or cigars; (“tabac en vrac”)

“unmarked cigarettes” means cigarettes that are not marked cigarettes; (“cigarettes non marquées”)

“wholesaler” means a person who sells in Ontario tobacco for the purpose of resale, and includes a person who operates or maintains one or more cigarette vending machines in, at or upon premises owned or occupied by another person. (“grossiste”)  R.S.O. 1990, c. T.10, s. 1; 1991, c. 48, s. 1; 1992, c. 28, s. 1 (1); 1994, c. 18, s. 8 (1, 2); 1998, c. 34, s. 105; 2000, c. 42, s. 97; 2001, c. 23, s. 219; 2004, c. 7, s. 19; 2004, c. 31, Sched. 36, s. 1.

Exemptions under other Acts

1.1 No person otherwise subject to tax under this Act is exempt therefrom by reason of an exemption granted to the person, or to or in respect of the personal or real property of the person, by or under any other Act, unless the other Act expressly mentions this Act.  2001, c. 23, s. 220.

Tax on tobacco other than cigars

2. (1) Every consumer shall pay to Her Majesty in right of Ontario a tax at the rate of 11.1 cents on every cigarette and on every gram or part gram of tobacco, other than cigarettes and cigars, purchased by the consumer.  2004, c. 7, s. 20 (1).

(1.1) Repealed:  2004, c. 7, s. 20 (2).

(1.1.1) Repealed:  2004, c. 7, s. 20 (2).

(1.2) Repealed:  2004, c. 7, s. 20 (3).

(1.3) Repealed:  2004, c. 7, s. 20 (4).

(1.4) Repealed:  2004, c. 7, s. 20 (4).

Tax for cigars

(1.5) Every consumer shall pay to Her Majesty in right of Ontario a tax on every cigar purchased by the consumer at the rate of 56.6 per cent of the taxable price of the cigar.  2000, c. 42, s. 98 (2); 2002, c. 8, Sched. M, s. 1 (4).

Fraction of a cent

(1.6) If an amount of tax calculated under subsection (1.5) is a fraction of a cent, the fraction shall be counted as a full cent.  2000, c. 42, s. 98 (2).

Taxable price of cigar

(1.7) For the purposes of subsection (1.5), the taxable price of a cigar is the sum of the following amounts:

1. The price for which the cigar was purchased by its retail dealer, including the value in terms of Canadian money of any other consideration accepted by the wholesaler from whom the cigar passed as or on account of the price of the cigar.

2. The cost of, or charges for, customs and mailing, delivery or transportation, whether or not they are shown separately in the books of the wholesaler or on any invoice or in the computation of the price, or whether or not title has passed to the retail dealer before delivery to the retail dealer.

3. The amount of the tax imposed under the Excise Tax Act (Canada), other than the tax imposed by Part IX of that Act, or the duty imposed under the Excise Act (Canada) in respect of the cigar or in respect of the sale or acquisition of the cigar.

4. The amount determined by multiplying the prescribed percentage by the sum of the amounts described in paragraphs 1, 2 and 3.  2000, c. 42, s. 98 (2).

Same

(1.8) Despite subsection (1.7), if the importer or manufacturer of a cigar is also the retail dealer of the cigar, the taxable price of the cigar is equal to the price that the consumer is deemed to have paid for the cigar as described in subsection (1.9).  2000, c. 42, s. 98 (2).

Same

(1.9) For the purposes of subsection (1.8), the price that the consumer is deemed to have paid for the cigar is the sum of the following amounts:

1. The price for which the cigar was purchased by the consumer including the value in terms of Canadian money of any other consideration accepted as or on account of the price of the cigar by the retail dealer of the cigar.

2. The cost of, or charges for, customs and mailing, delivery or transportation, whether or not they are shown separately in the books of the retail dealer or on any invoice or in the computation of the price, or whether or not title has passed to the consumer before delivery to the consumer.

3. The amount of the tax imposed under the Excise Tax Act (Canada), other than the tax imposed by Part IX of that Act, or the duty imposed under the Excise Act (Canada) in respect of the cigar or in respect of the sale or acquisition of the cigar.  2000, c. 42, s. 98 (2).

Collection of tax

(2) The tax imposed by this Act shall be collected from the consumer by the retail dealer as agent of the Minister at the time of the sale to the consumer and shall be remitted by the retail dealer to the Minister at the time and in the manner provided under this Act.  R.S.O. 1990, c. T.10, s. 2 (2).

Determination of taxable price of a cigar

(2.1) If the Minister considers that any of the amounts in a retail dealer’s records for the matters described in paragraph 1 or 2 of subsection (1.7) or paragraph 1 or 2 of subsection (1.9) is artificially low or if the price referred to in paragraph 1 of subsection (1.7) or paragraph 1 of subsection (1.9) is below a reasonable wholesale market price, the Minister may determine the amount for the purpose of taxation under this Act and for the purpose of the applicable paragraph of subsection (1.7) or (1.9), unless it is established in an appeal under section 22 that the amount determined by the Minister is unreasonable.  2000, c. 42, s. 98 (3).

Regulations re tax rates

(2.2) The Minister may make regulations prescribing rates of tax that are different from those specified in this section.  2004, c. 7, s. 20 (5).

Same

(2.3) A regulation made under subsection (2.2) may provide for different rates of tax on different kinds of tobacco as may be prescribed by the Minister.  2004, c. 7, s. 20 (5).

M.L.A.s not disqualified

(3) No person acting as agent under subsection (2) shall thereby be made ineligible as a member of the Assembly.  R.S.O. 1990, c. T.10, s. 2 (3).

Amounts in lieu of tax

(4) Where any person selling tobacco receives any payment made as or in lieu of the tax payable under this Act, such payment shall be dealt with and accounted for as tax under this Act, and any person who fails to deal with and account for such payment in accordance with this Act and the regulations is liable to the same penalties and fines, and is guilty of the same offences, as would apply if the payment were the tax payable under this Act, and the Minister may collect and receive such payment by the same remedies and procedures as are provided by this Act or the regulations for the collection and enforcement of the tax payable under this Act and, for the purposes of the assessment and collection of such payment, the person receiving such payment as or in lieu of the tax payable under this Act is deemed to be a collector.  R.S.O. 1990, c. T.10, s. 2 (4).

Assignment of book debts

(5) Where a collector or a registered importer has made an assignment of their book debts, whether by way of specific or general assignment, or in any other manner disposes of their present or future right to collect their book debts, the assignment does not include the portion of the book debts that the collector or importer, as agent for the Minister, charged the person to whom the collector or importer sold the tobacco as tax under this Act, and any such assignee or any other person who collects the book debts shall be deemed to be a collector under this Act and shall collect, remit and account under this Act and the regulations for the unassigned portion.  R.S.O. 1990, c. T.10, s. 2 (5).

Liability for tax

(6) Every consumer is liable for the tax imposed by this Act until the consumer has paid it.  R.S.O. 1990, c. T.10, s. 2 (6).

Offence

(7) Every person who knowingly fails to pay tax as imposed by this section at the time the person is required to do so is guilty of an offence and on conviction is liable to a fine of not less than $500 and not more than three times the amount of the tax payable by that person.  2004, c. 7, s. 20 (6).

Penalty

(7.1) Every person who knowingly fails to pay tax as imposed by this section at the time the person is required to do so shall pay a penalty, when assessed therefor, equal to three times the amount of the tax payable by that person.  2004, c. 7, s. 20 (6).

Offence

(8) Every person who fails to comply with subsection (2) is guilty of an offence and on conviction is liable to a fine of not less than $1,000 and not more than $50,000.  R.S.O. 1990, c. T.10, s. 2 (8); 2004, c. 7, s. 20 (7).

Duty to provide invoice for cigars

2.1 (1) Every wholesaler shall inform the person to whom the wholesaler sells cigars of the quantity of cigars being sold and the tax collectable and payable on the cigars and shall deliver to the person, at the time of the purchase, an invoice containing the prescribed information.  2000, c. 42, s. 99.

Liability for tax

(2) Every person who purchases cigars from a wholesaler without obtaining an invoice containing the information required under subsection (1) remains liable for the tax collectable or tax payable under this Act in respect of the purchase until the tax is paid to the wholesaler or the Minister, as the case may be.  2000, c. 42, s. 99.

Same

(3) Subsection (2) applies whether or not the wholesaler is an agent of the Minister.  2000, c. 42, s. 99.

Duty of retail dealer

(4) Every retail dealer shall provide every consumer of cigars with an invoice specifying the tax payable and any other prescribed information or shall give the consumer that information by another reasonable means.  2000, c. 42, s. 99.

Wholesaler’s permit

3. (1) No person shall sell or deliver in Ontario tobacco for resale unless the person holds a wholesaler’s permit issued to the person in such form and manner as the Minister requires.  R.S.O. 1990, c. T.10, s. 3 (1).

Conditions and restrictions

(2) The Minister may, as a requirement for the issuance of a wholesaler’s permit, impose such reasonable conditions and restrictions as the Minister considers appropriate.  R.S.O. 1990, c. T.10, s. 3 (2).

Wholesaler’s permit required

(3) No person shall purchase or receive delivery in Ontario of tobacco from a wholesaler who does not hold a wholesaler’s permit issued under this section or from an importer who does not hold a registration certificate issued under this Act.  R.S.O. 1990, c. T.10, s. 3 (3).

Sale to retail dealer

(4) No wholesaler shall sell or deliver in Ontario tobacco to a person who does not hold a vendor’s permit issued to the person under the Retail Sales Tax Act.  R.S.O. 1990, c. T.10, s. 3 (4).

Vendor’s permit required

(5) No person shall sell or deliver in Ontario tobacco to a consumer unless the person holds a vendor’s permit issued to the person under the Retail Sales Tax Act.  R.S.O. 1990, c. T.10, s. 3 (5).

Change of business

(6) Every wholesaler shall forthwith notify the Minister in writing of all changes in the name or nature of the wholesaler’s business or of the termination of the business.  R.S.O. 1990, c. T.10, s. 3 (6).

Offence

(7) Every person who,

(a) operates as a wholesaler without obtaining a wholesaler’s permit required under this section; or

(b) being the holder of such a permit contravenes any condition or restriction contained in the permit or any other requirements specified in this section,

is guilty of an offence and on conviction is liable to a fine of not less than $1,000 and not more than $10,000, plus, in respect of a conviction under clause (a), to a fine of not less than three times the amount of tax that would be payable under section 2 had the tobacco the person sold during the period when the person did not hold a wholesaler’s permit been sold to a consumer liable to pay tax under this Act.  R.S.O. 1990, c. T.10, s. 3 (7); 2004, c. 7, s. 21.

Collection of tax

4. (1) The Minister may designate in writing any person to collect the tax imposed by this Act, and the person so designated shall be the agent of the Minister and shall collect and remit the tax to the Minister at the time or times and in the manner provided under this Act.  R.S.O. 1990, c. T.10, s. 4 (1); 1994, c. 18, s. 8 (4).

Conditions of designation

(1.1) The Minister may impose such conditions and restrictions with respect to a designation under subsection (1) as the Minister considers appropriate.  1998, c. 5, s. 49.

Termination

(1.2) In addition to any other grounds upon which the Minister may terminate a person’s designation under subsection (1), he or she may terminate the designation if the person has not sold or delivered tobacco products for a period of six consecutive months.  1998, c. 5, s. 49.

Wholesalers of cigars

(1.3) The Minister may designate in writing a wholesaler who sells or delivers cigars to retail dealers to collect the tax imposed on the cigars under subsection 2 (1.5) and a person so designated shall be the agent of the Minister and shall collect and remit the tax to the Minister at the time or times and in the manner provided under this Act.  2000, c. 42, s. 100 (1).

Conditions

(1.4) The Minister may impose any conditions and restrictions with respect to a designation under subsection (1.3) that the Minister considers appropriate.  2000, c. 42, s. 100 (1).

Collection of tax by collector

(2) Every collector shall collect the tax collectable and payable under this Act from every person to whom the collector sells or delivers tobacco in Ontario, and shall remit the tax, as well as the tax, if any, on all tobacco in respect of which the collector is a consumer, to the Minister at the times and in the manner required by this Act and the regulations.  R.S.O. 1990, c. T.10, s. 4 (2); 1994, c. 18, s. 8 (4).

Sale to another collector

(3) Subsection (2) does not apply,

(a) to require a collector designated under subsection (1) to collect tax under this Act on the sale or delivery of tobacco by the collector to another collector designated under subsection (1) who is not a consumer in respect of the tobacco; or

(b) to require a collector designated under subsection (1) or (1.3) to collect tax under this Act on the sale or delivery of cigars by the collector to another collector designated under subsection (1) or (1.3) who is not a consumer in respect of the cigars or to a registered importer who is not a consumer in respect of the cigars.  2000, c. 42, s. 100 (2); 2001, c. 8, s. 244.

Collection of tax by retail dealer

(4) Every retail dealer who is not a collector or a registered importer shall collect the tax on tobacco sold or delivered by the retail dealer to a consumer and pay the tax over to the collector, registered importer or registered wholesaler from whom the retail dealer purchased tobacco.  R.S.O. 1990, c. T.10, s. 4 (4).

Collection of tax by wholesaler

(5) Every wholesaler who is not a collector or registered importer shall collect, as agent for the Minister, the tax imposed by this Act from the retail dealer to whom the wholesaler sells or delivers tobacco and shall pay the tax over to the collector or registered importer from whom the wholesaler purchased the tobacco.  R.S.O. 1990, c. T.10, s. 4 (5).

Collection of tax by registered importer

(6) Every registered importer shall collect, as agent for the Minister, the tax collectable or payable under this Act from every person to whom the importer sells or delivers tobacco in Ontario.  2000, c. 42, s. 100 (3).

Duty to remit

(6.1) Every registered importer shall remit to the Minister the tax collected by the importer in accordance with subsection (6) as well as the tax, if any, in respect of which the importer is a consumer and shall do so at the times and in the manner required by this Act and the regulations.  2000, c. 42, s. 100 (3).

Agreements

(7) For the purpose of ensuring and facilitating the collection of tax under this Act, the Minister may enter into such arrangements and agreements as the Minister considers appropriate.  R.S.O. 1990, c. T.10, s. 4 (7).

Offence

(8) Every collector, importer, wholesaler or retail dealer who refuses or neglects to collect tax in accordance with this Act is guilty of an offence and on conviction is liable to a fine of not less than the amount of tax that such person refused or neglected to collect, plus a fine of not less than $1,000 and not more than $10,000.  R.S.O. 1990, c. T.10, s. 4 (8); 2004, c. 7, s. 22.

Registration certificate, importer or exporter

5. (1) Every importer of tobacco in bulk into Ontario and every exporter of tobacco in bulk out of Ontario shall apply for and the Minister shall issue a registration certificate in such form and manner as the Minister requires.  R.S.O. 1990, c. T.10, s. 5 (1).

Conditions and restrictions

(2) The Minister may, as a requirement for the issuance of a registration certificate, impose such reasonable conditions and restrictions as the Minister considers appropriate.  R.S.O. 1990, c. T.10, s. 5 (2).

Collection of tax

(3) Every registered importer shall, at the times and in the manner required by this Act and the regulations, collect and remit to the Minister the tax collectable and payable under this Act from every person to whom the registered importer has sold tobacco and the tax on all tobacco in respect of which the registered importer is a consumer.  R.S.O. 1990, c. T.10, s. 5 (3); 1994, c. 18, s. 8 (4).

Sales to collector

(4) Subsection (3) does not apply to require a registered importer to collect tax under this Act,

(a) on the sale or delivery of tobacco by the registered importer to a collector appointed under subsection 4 (1) who is not a consumer in respect of the tobacco; or

(b) on the sale or delivery of cigars by the registered importer to another registered importer who is not a consumer in respect of the cigars or to a collector designated under subsection 4 (1) or (1.3) who is not a consumer in respect of the cigars.  2000, c. 42, s. 101 (1); 2001, c. 8, s. 245.

Agent to collect tax

(5) Every registered importer is deemed to be an agent of the Minister to collect the tax imposed by this Act from every person to whom the registered importer sells tobacco.  R.S.O. 1990, c. T.10, s. 5 (5).

Non-registered importer

(6) Every dealer who purchases or acquires tobacco from an importer who does not hold a registration certificate issued to the importer under this section shall, at the time and in the manner prescribed, remit to the Minister the tax collectable and payable on the tobacco purchased or acquired by the dealer.  R.S.O. 1990, c. T.10, s. 5 (6); 1994, c. 18, s. 8 (4).

Interjurisdictional transporter

(7) Every registered importer or exporter who is an interjurisdictional transporter shall keep in the possession of the driver of any motor vehicle operated on behalf of the importer or exporter a true copy of the registration certificate issued to the importer or exporter.  R.S.O. 1990, c. T.10, s. 5 (7); 2004, c. 31, Sched. 36, s. 2.

Idem

(8) A registered importer or exporter shall provide an interjurisdictional transporter transporting the importer’s or exporter’s tobacco with a true copy of the registration certificate issued to the importer or exporter.  R.S.O. 1990, c. T.10, s. 5 (8); 2004, c. 31, Sched. 36, s. 2.

Export of tobacco

(9) Every exporter shall forward to the Minister information in the form and manner required by the Minister in respect of tobacco to be exported.  1997, c. 19, s. 25 (1).

Return by exporter

(10) Following delivery of the tobacco by the exporter to a location outside Ontario, the exporter shall file the required return in the prescribed manner and provide evidence satisfactory to the Minister that the tobacco has been exported out of Ontario.  R.S.O. 1990, c. T.10, s. 5 (10).

Penalty

(11) An exporter who fails to comply with subsections (9) and (10) shall pay a penalty, when assessed therefor, on the tobacco exported or to be exported equal to the tax that would be payable on the tobacco exported or to be exported had it been sold to a consumer liable to pay tax under this Act.  R.S.O. 1990, c. T.10, s. 5 (11); 2004, c. 7, s. 23 (1).

Penalty on unregistered importer or exporter

(11.1) Every person who operates as an importer or exporter in Ontario without holding a subsisting registration certificate under this section shall pay a penalty, when assessed therefor, that is equal to the tax that would be payable under section 2 had the tobacco imported into or exported out of Ontario by the person during the period when the person did not hold the subsisting certificate been sold to a consumer liable to pay tax under this Act.  2004, c. 7, s. 23 (2).

Notification

(12) Every importer or exporter shall forthwith notify the Minister in writing of all changes in the name or nature of the importer’s or exporter’s business or of the termination of the business.  R.S.O. 1990, c. T.10, s. 5 (12).

Offence

(13) Every person who operates as an importer or exporter in Ontario without holding a registration certificate under this section or who, being the holder of such a certificate, contravenes any condition or restriction contained in the certificate or any other requirement specified in this section is guilty of an offence and on conviction is liable,

(a) to a fine of not less than $1,000 and not more than $10,000; and

(b) in respect of a conviction for operating as an importer or exporter without holding a registration certificate, to an additional fine of not less than three times the amount of tax that would be payable under section 2, had the tobacco imported into or exported out of Ontario by the person during the period when the person did not hold a registration certificate been sold to a consumer liable to pay tax under this Act.  2004, c. 7, s. 23 (3).

Offence

(14) Every person who purchases or receives tobacco from an importer who does not hold a registration certificate issued under this Act is guilty of an offence and on conviction is liable to a fine of not less than $500 and not more than $10,000 plus three times the amount of tax that would be payable under section 2 had the tobacco purchased or received from the importer during the period when the importer did not hold a certificate been sold to a consumer liable to pay tax under this Act.  R.S.O. 1990, c. T.10, s. 5 (14); 2004, c. 7, s. 23 (4).

Registration certificate of interjurisdictional transporter

6. (1) Every interjurisdictional transporter shall apply for and the Minister shall issue a registration certificate in such form and manner as the Minister requires.  R.S.O. 1990, c. T.10, s. 6 (1).

Conditions and restrictions

(2) The Minister may, as a requirement for the issuance of a registration certificate, impose such reasonable conditions and restrictions as the Minister considers appropriate.  R.S.O. 1990, c. T.10, s. 6 (2).

Offence, failure to register

(2.1) Every interjurisdictional transporter transporting tobacco in bulk into or out of Ontario who is not registered as an interjurisdictional transporter under this Act is guilty of an offence and on conviction is liable to a fine of not less than $1,000 and not more than $10,000.  2002, c. 22, s. 192.

Penalty, failure to register

(2.2) Every interjurisdictional transporter transporting tobacco in bulk into or out of Ontario who does not hold a registration certificate under this Act shall pay to the Minister a penalty, when assessed therefor, equal to the sum of $500 and 5 per cent of the tax that would be payable under this Act on all such tobacco transported by the transporter into or out of Ontario during the period that the transporter did not hold a registration certificate, calculated as if that tobacco had been purchased by a consumer.  2002, c. 22, s. 192.

Information

(3) Every interjurisdictional transporter shall maintain the information prescribed by the Minister in respect of every shipment of tobacco in bulk transported by the interjurisdictional transporter into or out of Ontario and shall maintain that information in a form approved by the Minister.  2004, c. 31, Sched. 36, s. 3 (1).

Transporter to obtain certificate

(4) Before undertaking to transport tobacco in bulk into or out of Ontario, an interjurisdictional transporter shall obtain a true copy of the registration certificate required to be provided under subsection 5 (8).  R.S.O. 1990, c. T.10, s. 6 (4); 2004, c. 31, Sched. 36, s. 3 (2).

Possession of documents

(5) When transporting tobacco in bulk, every interjurisdictional transporter shall keep in the possession of the driver of the motor vehicle in which the tobacco in bulk is being transported,

(a) the interjurisdictional transporter’s registration certificate issued under subsection (1);

(b) the information required under subsection (3); and

(c) if the tobacco in bulk is being transported for an importer or exporter, the true copy of the registration certificate obtained in accordance with subsection (4) or the transit permit issued under subsection 10 (1) to the owner of the tobacco in bulk being transported.  R.S.O. 1990, c. T.10, s. 6 (5); 2004, c. 31, Sched. 36, s. 3 (3, 4).

Detention of vehicles

(6) Any person who is authorized for the purpose by the Minister and who has reasonable and probable grounds to believe that an interjurisdictional transporter does not hold a registration certificate or is transporting tobacco in bulk on behalf of an importer or exporter who does not hold a registration certificate issued under this Act may, without warrant, stop and detain any vehicle operated in Ontario by the interjurisdictional transporter and require production of the documents specified in subsection (5).  1991, c. 48, s. 3.

Seizure, etc., of tobacco

(7) Where, following a detention under subsection (6), the person fails to produce the documents specified in subsection (5), a person authorized for the purpose by the Minister may, without a warrant but subject to subsections (8), (9) and (11), seize, impound, hold and dispose of the tobacco, unless the interjurisdictional transporter complies with subsection (9).  R.S.O. 1990, c. T.10, s. 6 (7).

No seizure, etc.

(8) Despite subsection (7), no seizure, impounding, holding or disposal shall be made if the driver of the vehicle detained under subsection (6) provides proof satisfactory to the person making the detention,

(a) that the driver holds a registration certificate issued under subsection (1);

(b) as to the quantity and destination of the tobacco being transported; and

(c) that the importer or exporter for whom the tobacco is being transported, if such is the case, holds a registration certificate under subsection 12 (1) or holds a transit permit issued under subsection 10 (1) to the owner of the tobacco being transported.  R.S.O. 1990, c. T.10, s. 6 (8).

Penalty

(9) Tobacco seized under subsection (7) shall be forfeited to Her Majesty to be disposed of as the Minister directs unless, within thirty days following the seizure, the person from whom the tobacco was seized, or the owner of the tobacco, pays to the Minister an amount, as a penalty, equal to the tax that would be payable under section 2 if the tobacco were sold to a consumer in Ontario.  R.S.O. 1990, c. T.10, s. 6 (9); 1994, c. 18, s. 8 (4); 2001, c. 23, s. 221 (1).

Application

(10) Where tobacco has been seized under subsection (7) and the person from whom the tobacco has been seized, or the owner of the tobacco, claims to have the right to possession of the tobacco, the person or owner may apply within thirty days following the seizure, to the Superior Court of Justice to establish the right to possession of the tobacco.  R.S.O. 1990, c. T.10, s. 6 (10); 2001, c. 23, s. 221 (2).

Right to possession

(11) For the purposes of an application under subsection (10), the applicant has the right to possession of the tobacco if,

(a) the driver of the vehicle, when the tobacco was seized, held a true copy of the registration certificate issued under this Act to the interjurisdictional transporter;

(b) in the case of tobacco transported on behalf of an importer or exporter, the driver of the vehicle, when the tobacco was seized, held a true copy of the registration certificate issued under this Act to the importer or exporter or held a true copy of the transit permit issued under this Act to the owner of the tobacco; and

(c) when the tobacco was seized, the driver of the vehicle held the information required under subsection (3) or the operator of the vehicle delivered the information required under subsection (3) within five days after the seizure.  2004, c. 31, Sched. 36, s. 3 (5).

Disposition of application

(12) If, upon application under subsection (10), the court is satisfied that the applicant has the right to possession of the tobacco, the court may order the tobacco be returned to the applicant or that the proceeds of sale of the tobacco be paid to the applicant.  R.S.O. 1990, c. T.10, s. 6 (12).

Disposal of tobacco pending disposition

(13) If a final order is not made under subsection (12) within sixty days after the filing of the application under subsection (10), the Minister may dispose of the tobacco and retain the proceeds pending the determination of the application.  R.S.O. 1990, c. T.10, s. 6 (13).

Forfeiture of tobacco

(14) Upon dismissal of the application under subsection (12) and the expiry of the appeal period therefrom, the tobacco is forfeited to Her Majesty to be disposed of as the Minister directs.  R.S.O. 1990, c. T.10, s. 6 (14).

Payment of proceeds of sale

(15) If a sale of tobacco is directed under subsection (9) or (14) or if the proceeds of the sale are retained under subsection (13) and the application is dismissed, the proceeds of the sale remaining after payment of the costs incurred by the Minister in seizing, storing and disposing of the tobacco and after payment of the penalty under subsection (9) shall be paid to the person from whom the tobacco was seized or to the owner of the tobacco.  R.S.O. 1990, c. T.10, s. 6 (15).

Offence

(16) Every interjurisdictional transporter transporting tobacco in bulk into or out of Ontario who fails to produce any of the documents required to be kept in the possession of the driver under subsection (5) is guilty of an offence and on conviction is liable to a fine of not less than $200 and not more than $1,000 for each document not produced.  R.S.O. 1990, c. T.10, s. 6 (16).

Registration certificate of manufacturer

7. (1) Every manufacturer shall apply for and the Minister shall issue a registration certificate in such form and manner as the Minister requires.  R.S.O. 1990, c. T.10, s. 7 (1).

Conditions and restrictions

(2) The Minister may, as a requirement for the issuance of a registration certificate, impose such reasonable conditions and restrictions as the Minister considers appropriate.  R.S.O. 1990, c. T.10, s. 7 (2).

Change of business

(3) Every manufacturer shall forthwith notify the Minister of all changes in the name or nature of the manufacturer’s business or of the termination of the business.  R.S.O. 1990, c. T.10, s. 7 (3).

Offence

(4) Every person who operates as a manufacturer in Ontario without holding a registration certificate required by this section or who, being the holder of such a certificate, contravenes any condition or restriction contained in the certificate or any other requirement specified in this section is guilty of an offence and on conviction is liable,

(a) to a fine of not less than $1,000 and not more than $10,000; and

(b) in respect of a conviction for operating as a manufacturer without holding a registration certificate, to an additional fine of not less than three times the amount of tax that would be payable under section 2 had the tobacco manufactured by the person during the period when the person did not hold a certificate been sold to a consumer liable to pay tax under this Act.  2004, c. 7, s. 24.

Penalty, failure to register

(5) Every person who operates as a manufacturer in Ontario without holding a registration certificate required by this section shall pay to the Minister a penalty, when assessed therefor, in an amount equal to the tax that would be payable under this Act on the volume of tobacco that the person manufactured during the period that the person did not hold a registration certificate, calculated as if that tobacco had been purchased by a consumer.  2002, c. 22, s. 193.

Permit to manufacture tear tape

7.1 (1) Every tear tape manufacturer shall apply, in a form approved by the Minister, for a permit to manufacture tear tape for use in Ontario and the Minister shall issue a permit to the tear tape manufacturer in the form and manner that the Minister requires.  2001, c. 23, s. 222.

Conditions and restrictions

(2) The Minister may, as a requirement for the issuance of a permit to manufacture tear tape, impose such reasonable conditions and restrictions that the Minister considers appropriate.  2001, c. 23, s. 222.

Change of business

(3) Every holder of a permit to manufacture tear tape shall forthwith notify the Minister in writing of all changes in the name or nature of the manufacturer’s business or of the termination of the business.  2001, c. 23, s. 222.

Cancellation of permit

(4) The Minister may cancel or suspend a permit to manufacture tear tape if a tear tape manufacturer sells, distributes or delivers tear tape marked in accordance with the regulations to a person who is not the holder of a permit to mark or stamp cigarettes under section 8.  2001, c. 23, s. 222.

Requirements

(5) Every holder of a permit to manufacture tear tape shall,

(a) in accordance with the regulations, mark the tear tape the holder manufactures for use in Ontario; and

(b) account for and take reasonable steps to safeguard tear tape in its possession.  2001, c. 23, s. 222.

Prohibition

(6) No holder of a permit to manufacture tear tape shall sell, distribute or deliver tear tape marked in accordance with the regulations to a person unless the person holds a permit to mark or stamp cigarettes under section 8.  2001, c. 23, s. 222.

Penalty

(7) Every person who operates as a tear tape manufacturer without holding a permit to manufacture tear tape required by this section shall pay a penalty, when assessed for it, in an amount equal to the tax that would be payable under section 2, had the tear tape that the person manufactured for use in Ontario during the period when the person did not hold the permit to manufacture tear tape been affixed to packages of cigarettes and sold to a consumer liable to pay tax under this Act.  2001, c. 23, s. 222.

Same, holder of permit

(8) Every holder of a permit to manufacture tear tape who,

(a) fails to mark, in accordance with the regulations, the tear tape the holder manufactures for use in Ontario;

(b) fails to account for any tear tape in accordance with the regulations; or

(c) sells, distributes or delivers tear tape marked in accordance with the regulations to a person who does not hold a permit to mark or stamp cigarettes under section 8,

shall pay a penalty, when assessed for it, equal to the tax that would be payable under section 2, had the subject tear tape been affixed to packages of cigarettes and sold to a consumer liable to pay tax under this Act.  2001, c. 23, s. 222.

Offence

(9) Every person who manufactures tear tape for use in Ontario without holding a permit required by this section, or who, being the holder of such permit, contravenes any condition or restriction contained in the permit or any other requirement specified in this section, is guilty of an offence and on conviction is liable to a fine of not less than $1,000 and not more than $10,000.  2001, c. 23, s. 222.

Marking or stamping packages

8. (1) No person shall sell to a consumer required to pay tax under this Act a package of cigarettes or a carton or case that contains packages of cigarettes unless the package, carton or case is marked or stamped in accordance with the regulations.  R.S.O. 1990, c. T.10, s. 8 (1).

Permit to mark cigarettes

(2) No person shall mark packages of cigarettes, cartons or cases unless the person holds a permit to mark cigarettes issued to the person under the regulations.  R.S.O. 1990, c. T.10, s. 8 (2).

Permit to stamp cigarettes

(3) No person shall stamp packages of cigarettes, cartons or cases unless the person holds a permit to stamp cigarettes issued to the person under the regulations.  R.S.O. 1990, c. T.10, s. 8 (3).

Idem

(4) The Minister may, as a requirement for the issuance of a permit to mark or stamp cigarettes under the regulations, impose such reasonable conditions and restrictions as the Minister considers appropriate.  R.S.O. 1990, c. T.10, s. 8 (4).

Mark-point

(5) The Minister may specify the number and location of mark-points that the holder of a permit to mark or stamp cigarettes may establish and operate and the person shall not mark or stamp cigarettes at any other location.  R.S.O. 1990, c. T.10, s. 8 (5).

Storage of unmarked cigarettes

(6) No person shall store unmarked cigarettes at a location other than a mark-point or a designated warehouse.  R.S.O. 1990, c. T.10, s. 8 (6).

Cancellation of permit

(7) The Minister may cancel or suspend a permit to mark or stamp cigarettes issued to a person who permits the marking or stamping of cigarettes at a location not specified by the Minister under subsection (5).  R.S.O. 1990, c. T.10, s. 8 (7).

Tear tape acquisition

(7.1) Every holder of a permit to mark or stamp cigarettes shall obtain all tear tape used in marking packages of cigarettes for sale in Ontario from a holder of a permit to manufacture tear tape under section 7.1.  2001, c. 23, s. 223 (1).

Accounting for indicia

(8) Every holder of a permit to mark or stamp cigarettes shall, as required by the regulations, account for all indicia received from the Minister and all tear tape received from the holder of a permit to manufacture tear tape under section 7.1.  2001, c. 23, s. 223 (2).

Penalty

(9) Any indicia or tear tape for which the holder of a permit to mark or stamp cigarettes fails to account under the regulations shall be deemed to have been affixed to packages of cigarettes or cartons, as the case may be, and sold to consumers liable to pay tax under this Act, and the holder of the permit shall pay a penalty equal to the tax, when assessed therefor.  R.S.O. 1990, c. T.10, s. 8 (9); 2001, c. 23, s. 223 (3).

Same, tear tape

(9.1) Every holder of a permit to mark or stamp cigarettes who obtains tear tape for use in Ontario from a person other than a holder of a permit to manufacture tear tape, shall pay a penalty, when assessed for it, equal to the tax that would be payable under section 2, had the tear tape obtained been affixed to packages of cigarettes and sold to a consumer liable to pay tax under this Act.  2001, c. 23, s. 223 (4).

Offence

(10) Every person who marks or stamps cigarettes, including a carton or case that contains packages of cigarettes, without holding a permit issued by the Minister under the regulations or who, being the holder of such a permit, contravenes any condition or restriction contained in the permit or any other requirement specified in this section is guilty of an offence and on conviction is liable,

(a) to a fine of not less than $1,000 and not more than $10,000; and

(b) in respect of a conviction for marking or stamping cigarettes without holding a permit, to a fine of not less than three times the amount of tax that would be payable under section 2, had the cigarettes that were marked or stamped by the person during the period when the person did not hold a permit been sold to a consumer liable to pay tax under this Act.  2004, c. 7, s. 25.

Offence

(11) Every holder of a permit to mark cigarettes who refuses or neglects to mark packages of cigarettes, cartons or cases in accordance with the regulations is guilty of an offence and on conviction is liable to a fine of not less than $50,000 and not more than $1,000,000.  R.S.O. 1990, c. T.10, s. 8 (11).

Offence

(12) Every holder of a permit to stamp cigarettes who refuses or neglects to stamp packages of cigarettes, cartons or cases in accordance with the regulations is guilty of an offence and on conviction is liable to a fine of not less than $5,000 and not more than $500,000.  R.S.O. 1990, c. T.10, s. 8 (12).

Permit to purchase unmarked cigarettes

9. (1) No person shall purchase, possess, store or sell unmarked cigarettes in Ontario unless the person has applied for and been issued a permit to purchase and sell unmarked cigarettes under the regulations.  R.S.O. 1990, c. T.10, s. 9 (1).

Conditions and restrictions

(2) The Minister may attach such reasonable conditions and restrictions to a permit to purchase and sell unmarked cigarettes as the Minister considers necessary to ensure that the unmarked cigarettes received by the applicant for the permit will be dealt with in accordance with this Act and the regulations.  R.S.O. 1990, c. T.10, s. 9 (2).

Notification

(3) Every holder of a permit to purchase and sell unmarked cigarettes shall forthwith notify the Minister in writing of all changes in the name or nature of the person’s business or of the termination of the business.  R.S.O. 1990, c. T.10, s. 9 (3).

Penalty

(4) Every person who, being the holder of a permit to purchase and sell unmarked cigarettes, sells or permits the sale of unmarked cigarettes to another person who is liable to collect or to pay tax under this Act shall pay a penalty, when assessed therefor, equal to the tax that would be payable under section 2 if the cigarettes were marked cigarettes sold to a consumer in Ontario.  2001, c. 23, s. 224.

Offence

(5) Every person who, being the holder of a permit to purchase and sell unmarked cigarettes, contravenes this Act or the regulations or any condition or restriction contained in the person’s permit is guilty of an offence and on conviction is liable to a fine of not less than $1,000 and not more than $10,000, plus a fine of not less than an amount equal to three times the amount of tax, if any, that should have been paid or remitted by the person in compliance with this Act or the regulations.  R.S.O. 1990, c. T.10, s. 9 (5).

Unauthorized delivery of unmarked cigarettes

9.1 (1) No person shall deliver, or cause to be delivered, unmarked cigarettes to a person in Ontario who is not authorized under this Act or the regulations to purchase, possess, store or sell unmarked cigarettes.  2004, c. 31, Sched. 36, s. 4.

Same

(2) Unless authorized under this Act or the regulations, no person shall deliver, or cause to be delivered, to another person unmarked cigarettes that are intended to be sold to consumers liable to pay tax under section 2.  2004, c. 31, Sched. 36, s. 4.

Penalty

(3) Every person who contravenes subsection (1) or (2) shall pay a penalty, when assessed therefor, equal to the tax that would be payable if the unmarked cigarettes were marked cigarettes sold to a consumer liable to pay tax under section 2.  2004, c. 31, Sched. 36, s. 4.

Offence

(4) Every person who contravenes subsection (1) or (2) is guilty of an offence and on conviction is liable to,

(a) a fine of not less than $1,000 and not more than $10,000; and

(b) an additional fine of not less than three times the amount of tax that would have been payable if the unmarked cigarettes were marked cigarettes sold to a consumer liable to pay tax under section 2.  2004, c. 31, Sched. 36, s. 4.

Transit permit

10. (1) Every person who is not a registered importer or exporter under this Act and who wishes to transport or cause to be transported tobacco in bulk owned by the person from a location outside Ontario, through Ontario and continuing to another location outside Ontario shall apply to the Minister for a transit permit prior to the transport.  R.S.O. 1990, c. T.10, s. 10 (1).

Conditions

(2) The Minister may, as a requirement for the issuance of a transit permit, impose such reasonable conditions, including the posting of security, as the Minister considers appropriate.  R.S.O. 1990, c. T.10, s. 10 (2).

Copy of transit permit

(3) Every person to whom a transit permit is issued under this section and who is an interjurisdictional transporter shall keep in the possession of the driver of any motor vehicle operated by the holder of the transit permit a true copy of the permit.  R.S.O. 1990, c. T.10, s. 10 (3); 2004, c. 31. Sched. 36, s. 5 (1).

Idem

(4) Every interjurisdictional transporter who is transporting tobacco in bulk on behalf of a person to whom a transit permit has been issued under subsection (1) shall secure from the person true copies of the transit permit.  R.S.O. 1990, c. T.10, s. 10 (4); 2004, c. 31. Sched. 36, s. 5 (2).

Permit not valid

(5) A transit permit is not valid in respect of the transport of marked cigarettes.  R.S.O. 1990, c. T.10, s. 10 (5).

Refusal to designate, etc.

11. (1) The Minister may refuse to designate a person under subsection 4 (1) or (1.3) or to issue a registration certificate or permit under this Act or the regulations if,

(a) the person has not paid all of the tax that the person is liable to pay under this Act;

(a.1) the person has not collected and remitted all of the tax that the person is required to collect and remit under this Act;

(b) the person, or any officer, director, shareholder, employee or partner of the person,

(i) has failed to pay a fine levied upon conviction under this Act,

(ii) has been convicted of an offence of fraud or tax evasion within the previous five years, or

(iii) held a registration certificate or permit issued under this Act or the regulations that was cancelled within the preceding five years;

(c) the person fails to satisfy the Minister of the person’s ability to perform the conditions proposed by the Minister to be contained in the designation, registration or permit; or

(d) the person fails to provide security as demanded by the Minister under subsection 12 (2).  R.S.O. 1990, c. T.10, s. 11 (1); 2000, c. 42, s. 102; 2004, c. 7, s. 26 (1, 2).

Suspension or cancellation of designation, etc.

(2) The Minister may suspend or cancel a person’s designation under subsection 4 (1) or (1.3) or a registration certificate or permit issued to a person under this Act or the regulations if,

(a) the person has not paid all of the tax that the person is liable to pay under this Act;

(b) the person has not collected and remitted all of the tax that the person is required to collect and remit under this Act;

(c) the person, or any officer, director, shareholder, employee or partner of the person,

(i) has failed to pay a fine levied on conviction under this Act, or

(ii) has been convicted of an offence of fraud or tax evasion within the previous five years;

(d) the person contravenes or permits the contravention of this Act or the regulations or of any condition or restriction contained in the designation, registration certificate or permit; or

(e) the person fails to provide security as demanded by the Minister under subsection 12 (2).  2004, c. 7, s. 26 (3).

Hearing

(3) Where the Minister proposes to take action under subsection (1), (2) or 8 (7), the Minister shall, before the refusal, suspension or cancellation is made, afford the person the opportunity to appear before the Minister to show cause why the designation, the registration certificate or the permit should not be refused, suspended or cancelled, as the case may be.  R.S.O. 1990, c. T.10, s. 11 (3).

Suspension forthwith

(4) Despite subsection (3), where a collector, a holder of a registration certificate or a holder of a permit under this Act or the regulations fails to deliver a return as required by this Act and the regulations or fails to remit the tax collectable and payable by the person, the Minister may, by notice in writing to the person stating the reasons therefor, suspend forthwith the designation, registration certificate or permit, but the person may, within 180 days of the service of the notice, request a hearing before the Minister on a day to be fixed not more than ten days from the date of the receipt of the request by the Minister, to determine whether the suspension may be rescinded and, if so, upon what conditions the suspension may be rescinded.  R.S.O. 1990, c. T.10, s. 11 (4); 2004, c. 7, s. 26 (4).

Service of notice

(5) A notice under subsection (1), (2) or (4) is properly served by personal service or by registered mail sent to the last known address of the person referred to in the subsection.  R.S.O. 1990, c. T.10, s. 11 (5).

Information and security

12. (1) The Minister may demand information or additional information from any person for the purposes of evaluating the suitability of a person to be a collector, registered importer, or exporter, or to hold a permit to mark or stamp cigarettes, to manufacture tear tape or to purchase and sell unmarked cigarettes, or to ascertain the amount of security to be furnished by a person in accordance with subsection (2) and the person shall deliver the information or further information the Minister requires within the time specified in the Minister’s demand.  R.S.O. 1990, c. T.10, s. 12 (1); 2001, c. 23, s. 225 (1).

Security

(2) The Minister shall demand security in a form acceptable to the Minister from,

(a) every collector appointed under subsection 4 (1) in an amount equal to the average three months’ tax collectable and payable by the collector calculated for the 12-month period preceding the date of the Minister’s demand, or $1 million, whichever is the greater;

(a.1) every collector appointed under subsection 4 (1.3) in an amount equal to the average three months’ tax collectable and payable by the collector calculated for the 12-month period preceding the date of the Minister’s demand, or $10,000, whichever is the greater;

(b) every importer who acquires marked cigarettes outside Ontario for distribution in Ontario, in an amount equal to the greater of $500,000 or the average three months’ tax that would be collectable and payable by the importer calculated on the basis of the twelve-month period immediately preceding the date of the Minister’s demand, if the cigarettes were sold to a consumer in Ontario in the twelve-month period;

(b.1) every importer who acquires tobacco products, other than marked cigarettes, outside Ontario for distribution in Ontario, in an amount equal to the greater of $10,000 or the average tax that would be collectable and payable by the importer for any three months in the 12-month period immediately preceding the date of the Minister’s demand if the tobacco products were sold to a consumer in Ontario in that 12-month period;

(c) every exporter in an amount specified by the Minister upon the forwarding to the Minister of information required in respect of tobacco to be exported for the purposes of subsection 5 (9);

(d) every person who applies for or is the holder of a permit to mark cigarettes in an amount equal to the greater of $1,000,000 or the average three months’ tax that would be collectable and payable by the person calculated on the basis of the twelve-month period preceding the Minister’s demand if the production of marked cigarettes were sold to consumers in Ontario during the twelve-month period;

(e) every person who applies for or is the holder of a permit to stamp cigarettes in an amount equal to the greater of $500,000 or the average three months’ tax that would be collectable and payable by the person calculated on the basis of the twelve-month period preceding the Minister’s demand if the production of stamped cigarettes were sold to consumers in Ontario during the twelve-month period;

(f) every person who applies for or is the holder of a permit to purchase or sell unmarked cigarettes in an amount equal to the greater of $500,000 or the average three months’ tax that would be collectable or payable by the person calculated on the basis of the twelve-month period preceding the Minister’s demand, if the person’s acquisition of unmarked cigarettes were marked cigarettes that were sold to consumers in Ontario during the twelve-month period; and

(g) every person who applies for or is the holder of a permit to manufacture tear tape, in an amount specified by the Minister.  R.S.O. 1990, c. T.10, s. 12 (2); 1998, c. 34, s. 106; 2000, c. 42, s. 103; 2001, c. 23, s. 225 (2); 2004, c. 7, s. 27.

Idem

(3) Every person shall, upon receipt of a demand under subsection (2), forthwith furnish the amount of security to the Minister.  R.S.O. 1990, c. T.10, s. 12 (3).

Idem

(4) The Minister may, at any time, increase or decrease the amount of security furnished or to be furnished under subsection (2).  R.S.O. 1990, c. T.10, s. 12 (4).

Application of security

(5) Where the Minister has, under this Act, assessed any person who has provided security under subsection (2), all or any part of the security may be paid into the Consolidated Revenue Fund in satisfaction of all or any part of the person’s assessed liability.  R.S.O. 1990, c. T.10, s. 12 (5).

Tobacco brought into or received in Ontario

13. Every person ordinarily resident in Ontario or carrying on business in Ontario who brings into Ontario or who receives delivery in Ontario of tobacco acquired for value by them for their own consumption or use or for the consumption or use by other persons at their expense, or on behalf of, or as agent for, a principal who desires to acquire such tobacco for the consumption or use by such principal or other persons at their expense, shall immediately report the matter in writing to the Minister and shall supply the Minister with the invoice and all other pertinent information required from them by the Minister in respect of the consumption or use of such tobacco, and shall pay to Her Majesty in right of Ontario the same tax in respect of the consumption and use of such tobacco as would have been payable if the tobacco had been purchased in Ontario.  R.S.O. 1990, c. T.10, s. 13.

Tax on returning resident

13.1 (1) In this section,

“returning resident” means an individual who,

(a) resides, ordinarily resides or carries on business in Ontario, and

(b) brings tobacco or causes tobacco to be brought into or receives delivery of tobacco in Ontario from outside Canada,

(i) for the individual’s own consumption or use,

(ii) for the consumption or use by another person at the individual’s expense, or

(iii) on behalf of or as agent for a principal for consumption or use by the principal or by another person at the principal’s expense.  1992, c. 28, s. 1 (2).

Returning resident to pay tax

(2) Subject to subsection (4), every returning resident shall, at the time he or she brings tobacco or causes tobacco to be brought into, or receives delivery of tobacco in Ontario,

(a) make such report to a customs officer as the customs officer requires with respect to the tobacco;

(b) provide the customs officer with all information required by the customs officer in respect of the tobacco; and

(c) remit the tax payable on the tobacco to the customs officer as agent of the Minister.  1992, c. 28, s. 1 (2).

Amount of tax payable

(3) For the purposes of subsection (2), the tax payable by a returning resident on the tobacco is an amount equal to the tax that would have been payable had the tobacco been purchased in Ontario.  1992, c. 28, s. 1 (2).

Exception

(4) No tax is payable on tobacco under this section if no tax is payable on the tobacco under Division III of Part IX of the Excise Tax Act (Canada).  1992, c. 28, s. 1 (2).

Taxable price

(5) For the purposes of determining the amount equal to the tax payable on a cigar under this section, the taxable price of a cigar shall be deemed to be the same as the value of the cigar determined for the purpose of calculating the tax payable on the cigar under Division III of Part IX of the Excise Tax Act (Canada).  1992, c. 28, s. 1 (2); 2000, c. 42, s. 104.

Application of subs. (2)

(6) Subsection (2) applies only while an agreement under section 13.3 is in force.  1992, c. 28, s. 1 (2).

Failure to report or pay tax

13.2 (1) If a returning resident fails or refuses to comply with subsection 13.1 (2), the customs officer may detain the tobacco until the earlier of,

(a) payment of the tax payable in respect of the tobacco, and the costs, if any, relating to its detention; or

(b) the expiry of sixty days after the date of the commencement of the detention.  1992, c. 28, s. 1 (2).

Return of tobacco

(2) If the tax payable in respect of the tobacco is paid, the tobacco shall be returned to the returning resident.  1992, c. 28, s. 1 (2).

Forfeiture of tobacco

(3) If the period of sixty days after the date of commencement of the detention has expired, the tobacco is forfeited to Her Majesty in right of Ontario and may be disposed of as directed by the Minister.  1992, c. 28, s. 1 (2).

Immunity of customs officers or agents

(4) No action or proceeding shall be brought against a customs officer or agent in respect of any act done or omitted to be done in good faith by the customs officer or agent,

(a) in the performance or intended performance of any duty under this Act or an agreement under section 13.3; or

(b) in the exercise or intended exercise of any power under this Act or an agreement under section 13.3.  1992, c. 28, s. 1 (2); 2001, c. 23, s. 226 (1).

Liability of the Crown

(5) Despite subsections 5 (2) and (4) of the Proceedings Against the Crown Act, subsection (4) does not relieve Her Majesty in right of Ontario of a liability to which it would otherwise be subject in respect of a tort.  2001, c. 23, s. 226 (2).

Agreement with federal government

13.3 (1) The Minister, on behalf of Her Majesty in right of Ontario, may enter into an agreement with the Government of Canada respecting the administration and enforcement of this Act in respect of tobacco,

(a) that is brought or caused to be brought into Ontario from outside Canada by a returning resident; or

(b) that is delivered in Ontario from outside Canada to a returning resident.  1992, c. 28, s. 1 (2).

Compensation

(2) The agreement may authorize payment to the Government of Canada in respect of services under the agreement.  1992, c. 28, s. 1 (2).

Payments

(3) Payments in respect of the on-going costs of services under the agreement shall be paid out of the amounts collected on behalf of the Minister.  1992, c. 28, s. 1 (2).

Authorization

(4) The Government of Canada may, as agent of Her Majesty in right of Ontario, act in accordance with the agreement,

(a) to collect tax owing in respect of tobacco that is released from customs without payment of all or part of the tax; and

(b) to refund an amount collected by a customs officer that is in excess of the amount of the tax payable in respect of tobacco.  1992, c. 28, s. 1 (2).

Agreement to share information

13.4 For the purposes of enforcing and administering this Act, the Minister, on behalf of Her Majesty in right of Ontario, may enter into an agreement with the Government of Canada respecting the sharing of information gathered under this Act.  2004, c. 31, Sched. 36, s. 6.

Sales of tobacco under Bulk Sales Act

14. (1) No wholesaler shall dispose of their stock of tobacco through a sale in bulk as defined in the Bulk Sales Act without first obtaining a certificate in duplicate from the Minister that all taxes collectable or payable under this Act by such wholesaler have been paid or that such person has entered into an arrangement satisfactory to the Minister for the payment of such taxes or for securing their payment.  R.S.O. 1990, c. T.10, s. 14 (1); 2000, c. 42, s. 105 (1).

Idem

(2) Every person purchasing tobacco stock through a sale in bulk as defined in the Bulk Sales Act shall obtain from the wholesaler selling such stock the duplicate copy of the certificate furnished under subsection (1), and if the person fails to do so, the person is responsible for payment to the Minister of all taxes collectable or payable under this Act by the wholesaler thus disposing of their tobacco stock through a sale in bulk.  R.S.O. 1990, c. T.10, s. 14 (2); 1994, c. 18, s. 8 (4); 2000, c. 42, s. 105 (2).

Absorption of tax

15. No retail dealer shall advertise or hold out or state to the public or to any consumer directly or indirectly that the tax or any part thereof imposed by this Act will be assumed or absorbed by the retail dealer or that it will not be considered as an element in the price to the consumer or, if added, that it or any part thereof will be refunded.  R.S.O. 1990, c. T.10, s. 15.

Tax money is trust money

16. (1) Every person who collects any tax imposed by this Act shall be deemed to hold it in trust for Her Majesty in right of Ontario and shall pay it over to the Minister at the time and in the manner prescribed by the regulations or by agreement made under the regulations.  R.S.O. 1990, c. T.10, s. 16 (1); 1994, c. 18, s. 8 (4).

Default in payment over to Minister

(2) If any person who has collected any tax imposed by this Act fails to pay it over to the Minister at the time and in the manner prescribed by the regulations or by agreement made under the regulations, as the case may be, the amount thereof becomes a debt due from such person to Her Majesty in right of Ontario.  R.S.O. 1990, c. T.10, s. 16 (2); 1994, c. 18, s. 8 (4).

Compensation to collectors, etc.

(3) For each 12-month period commencing on April 1, there may be paid to each person designated a collector under this Act and to each registered importer who is not also a person designated as a collector under this Act, as compensation for their services in collecting and remitting the tax imposed by this Act, the lesser of,

(a) $2,000; or

(b) the total of,

(i) 4 per cent of the tax collected by the person in that period and shown in a return that is made in accordance with this Act and the regulations and in which the tax shown to have been collected is $75 or more,

(ii) $3 for each return with respect to tax collected by the person in that period that is made in accordance with this Act and the regulations and in which the tax shown to have been collected exceeds $3 but does not exceed $75, and

(iii) the tax collected by the person in that period and shown on a return that is made in accordance with this Act and the regulations and in which the tax shown to have been collected does not exceed $3.  2000, c. 42, s. 106.

Same

(3.1) A person to whom compensation may be paid under subsection (3) may deduct that compensation from the amount otherwise to be remitted to the Minister in accordance with this Act and the regulations.  2000, c. 42, s. 106.

(4) Repealed:  2001, c. 23, s. 227.

Returns by collectors, etc.

17. (1) Every collector, importer, exporter, interjurisdictional transporter, wholesaler, manufacturer, or holder of a permit to mark or stamp cigarettes, to manufacture tear tape or to purchase and sell unmarked cigarettes, or holder of a transit permit shall deliver to the Minister such returns as the Minister requires for the purpose of this Act,

(a) without notice or demand at the time and in the manner prescribed; or

(b) on or before the day designated in the demand of the Minister served by personal service or by registered mail.  R.S.O. 1990, c. T.10, s. 17 (1); 2001, c. 23, s. 228 (1).

Idem

(2) Every return shall be verified by the certificate of the person required to file the return, and if the person is not an individual, of its president or resident manager or representative in Ontario, that the financial and other statements of information included in or attached to the return are in agreement with the books of the person and contain true, correct and complete information for the period covered by the return.  R.S.O. 1990, c. T.10, s. 17 (2).

Offence, failure to deliver a return

(3) Every person who fails to deliver a return as required by subsection (1) is guilty of an offence and on conviction is liable to a fine of not less than $500 and not more than $5,000.  2002, c. 22, s. 194 (1); 2004, c. 7, s. 28 (1).

Same, holder of a permit to manufacture tear tape

(3.1) Despite subsection (3), every holder of a permit to manufacture tear tape who fails to deliver a return as required by subsection (1) is guilty of an offence and on conviction is liable to a fine of not less than $500 and not more than $10,000.  2002, c. 22, s. 194 (2).

Penalty, failure to deliver a return

(4) Every person who is a collector, importer, exporter, wholesaler, manufacturer, holder of a permit to mark or stamp cigarettes or to purchase and sell unmarked cigarettes or holder of a transit permit who fails to deliver a return as required by subsection (1) shall pay to the Minister, when assessed therefor, a penalty equal to 10 per cent of the tax collectable or 5 per cent of the tax payable, as the case may be, by the person for the period covered by the return.  2002, c. 22, s. 194 (3).

Same, interjurisdictional transporter

(4.1) Every person who is an interjurisdictional transporter who fails to deliver a return as required by subsection (1) shall pay to the Minister, when assessed therefor, a penalty of $1,000 for the return that the transporter has failed to deliver.  2002, c. 22, s. 194 (3).

Same, holder of a permit to manufacture tear tape

(4.2) Every holder of a permit to manufacture tear tape who fails to deliver a return as required by subsection (1) shall pay to the Minister, when assessed therefor, a penalty of $1,000 for the return that the holder has failed to deliver.  2002, c. 22, s. 194 (4).

Penalty, failure to remit taxes with return

(4.3) Every person who fails to remit with the return required by subsection (1) the tax collectable or the tax payable by the person shall pay to the Minister, when assessed therefor, a penalty equal to 10 per cent of the tax collectable or 5 per cent of the tax payable, as the case may be, by the person for the period covered by the return.  2002, c. 22, s. 194 (5).

Offence

(5) Every person who fails to complete the information required in a return required under subsection (1) is guilty of an offence and on conviction is liable to a fine of not less than $500 and not more than $5,000.  R.S.O. 1990, c. T.10, s. 17 (5); 2004, c. 7, s. 28 (2).

Enlargement of time

(6) The Minister may enlarge the time for making a return before or after the time for making it.  R.S.O. 1990, c. T.10, s. 17 (6).

Declarations and affidavits

(7) Declarations and affidavits in connection with returns under this Act may be taken before any person having authority to administer an oath or affirmation, or before any person specifically authorized for that purpose by the Lieutenant Governor in Council, but a person so specifically authorized shall not charge a fee therefor.  R.S.O. 1990, c. T.10, s. 17 (7).

Transmission of tax

18. (1) Every collector or importer shall, with the return required under subsection 17 (1), transmit the tax payable or payable and collectable by the collector or importer.  R.S.O. 1990, c. T.10, s. 18 (1).

(2) Repealed:  1994, c. 18, s. 8 (6).

Refund of tax claimed

(3) Despite subsection (1), a collector designated under subsection 4 (1) may retain the amount of a refund for which the collector has made application under this Act or the regulations until the refund for which the collector has applied is, in whole or in part, approved or refused by the Minister and until notice of the Minister’s decision is sent to the collector.  2000, c. 42, s. 107.

Repayment of refund taken

(4) Despite subsection (3), upon receiving a statement of disallowance under subsection 19 (4) in respect of the application referred to in subsection (3), the collector shall, with the collector’s next return or at such earlier time as is specified in the statement of disallowance, whether or not an objection or appeal therefrom has been made or taken, transmit to the Minister the amount of any refund refused, together with interest thereon at the rate prescribed for the period during which the amount was retained by the collector and, upon being notified of the approval of any refund claimed, the collector may, subject to section 40, retain the amount so approved.  R.S.O. 1990, c. T.10, s. 18 (4); 1994, c. 18, s. 8 (4).

Application of subs. (3)

(5) Subsection (3) only applies to a collector, who, in a return filed by the collector in accordance with this Act and the regulations, shows that tax under this Act is to be remitted by the collector and who, at the time the return is delivered to the Minister, has also applied for a refund under this Act or the regulations.  R.S.O. 1990, c. T.10, s. 18 (5).

Offence

(6) Every person who is required to pay over to a collector or registered importer or to remit to the Minister the tax imposed by this Act and who fails to pay over or remit the tax is guilty of an offence and on conviction is liable to a fine of not less than an amount equal to 25 per cent of the tax and not more than an amount equal to three times the amount of the tax that should have been paid over or remitted.  R.S.O. 1990, c. T.10, s. 18 (6); 1994, c. 18, s. 8 (4); 2004, c. 7, s. 29.

Interest

18.1 (1) If on a particular date a debt as calculated under subsection (2) is payable by any person, the person shall be charged interest payable to the Minister at the prescribed rate and calculated in the prescribed manner on the amount of the debt from that date to the date the amount is received by the Minister.  1994, c. 18, s. 8 (7).

Amount of debt calculation

(2) In this section, the amount of the debt payable by a person under this Act at a particular date is the amount by which,

(a) the aggregate of,

(i) all tax under this Act that is collectable or that is payable by the person before that date,

(ii) all amounts or penalties or both assessed under this Act against the person at any time before that date,

(iii) all refunds taken under subsection 18 (3) that are disallowed in respect of a period of time ending before that date, and

(iv) the total of all amounts charged under this section against the person in respect of a period of time ending before that date,

exceeds,

(b) the aggregate of,

(i) the amount of all taxes remitted or paid by the person under this Act and the amount of any refund owing under any other Act that has been applied by the Minister to the person’s liabilities under this Act prior to that date,

(ii) the amount of all refunds taken under subsection 18 (3) prior to that date, and

(iii) the total of all amounts of interest credited to the person in respect of a period of time ending before that date.  1994, c. 18, s. 8 (7).

Compounding

(3) The interest under subsection (1) shall be compounded daily to the date on which it is paid.  1994, c. 18, s. 8 (7).

Minimum liability

(4) Where the amount of interest is less than a minimum amount to be determined from time to time by the Minister, no interest shall be paid under this section.  1994, c. 18, s. 8 (7).

Interest on penalties

(5) For the purposes of this section, interest on all penalties imposed by this Act shall be calculated from the date the default to which they apply first occurred.  1994, c. 18, s. 8 (7).

Note:  Section 18.1 applies in determining the amount of interest in respect of any day that is on or after July 1, 1993 and, for the purpose of determining the amount of interest in respect of any prior period, subsections 18 (2), 20 (1) and 20 (2) apply as they read before July 1, 1993.  See:  1994, c. 18, s. 8 (27).

Assessment

19. (1) The Minister may, at any time the Minister considers reasonable, assess or reassess,

(a) any tax that any person, as agent of the Minister, has collected and has failed to remit;

(b) any tax, interest or penalty payable by any person under this Act or the regulations;

(b.1) any amount that a person is responsible to pay under subsection 14 (2);

(b.2) any amount for which a person is liable under subsection 24.1 (5); and

(c) any amount deemed to be tax under section 40.  R.S.O. 1990, c. T.10, s. 19 (1); 2001, c. 23, s. 229 (1).

Assessment re amounts held in trust

(1.1) The amount assessed under clause (1) (b.1) shall be deemed to be tax collectable, collected or payable, as the case may be, by the person.  2001, c. 23, s. 229 (2).

Same

(1.2) The amount assessed under clause (1) (b.2) shall be deemed to be tax collectable or collected, as the case may be, by the person.  2001, c. 23, s. 229 (2).

Penalty for failure to collect tax

(2) The Minister may assess a penalty against every person who fails to collect tax that the person is responsible to collect under this Act or the regulations equal to,

(a) the amount that the person failed to collect; and

(b) an additional amount equal to 10 per cent of the amount referred to in clause (a).  1994, c. 18, s. 8 (8).

Note:  Subsection 19 (2) applies with respect to any failure to collect tax required to be collected on or after February 1, 1995.  See:  1994, c. 18, s. 8 (26).

Assessment on inspection

(3) Where it appears from an inspection, audit or examination of the books of account, records or documents of any collector, importer, exporter, wholesaler, retail dealer, consumer, interjurisdictional transporter, holder of a permit to mark or stamp cigarettes or holder of a transit permit that this Act or the regulations have not been complied with, the person making the inspection, audit or examination shall calculate the tax collectable or payable in such manner and form and by such procedure as the Minister considers adequate and expedient, and the Minister shall assess the amount of tax that any person as agent of the Minister has collected and has failed to remit and the amount of the tax, interest or penalty, as the case may be, payable by the person for which the person has not accounted.  R.S.O. 1990, c. T.10, s. 19 (3).

Limitation

(3.1) Subject to subsections (3.2) to (3.3), the Minister may assess or reassess any tax, interest or penalty payable under clause (1) (b) or tax payable as determined under subsection (3) within four years after the day on which the tax becomes payable.  2000, c. 42, s. 108; 2004, c. 31, Sched. 36, s. 7 (1).

Same

(3.2) If the Minister establishes that a person liable to pay the tax, interest or penalty under clause (1) (b) has made a misrepresentation that is attributable to neglect, carelessness or wilful default or has committed any fraud in making a return, in supplying information under this Act or in omitting to disclose information under this Act, the Minister may assess or reassess the tax, interest or penalty for which the person is liable at any time the Minister considers reasonable.  2000, c. 42, s. 108.

Exception, waiver of limitation

(3.2.1) Despite subsection (3.1), the Minister may assess or reassess a person at any time if the person has filed with the Minister a waiver in a form approved by the Minister before the expiry of the time provided in subsection (3.1).  2004, c. 31, Sched. 36, s. 7 (2).

Revocation of waiver

(3.2.2) If a person files a waiver under subsection (3.2.1), the person may file a notice of revocation of the waiver in a form approved by the Minister.  2004, c. 31, Sched. 36, s. 7 (2).

Effect of revocation

(3.2.3) If a person files a notice of revocation of the waiver under subsection (3.2.2), the Minister shall not issue an assessment or reassessment under subsection (3.1) in reliance on the waiver more than one year after the date on which the notice of revocation is filed.  2004, c. 31, Sched. 36, s. 7 (2).

Same

(3.3) Subsections (3.1) and (3.2) do not apply in respect of a reconsideration under subsection 21 (3).  2000, c. 42, s. 108.

Penalty for excess losses

(3.4) Every person who has excess unverifiable losses, determined in accordance with the regulations, shall pay a penalty, when assessed therefor, equal to the tax that would have been collectable by the person if the quantity of tobacco that exceeds the prescribed threshold for an unverifiable loss had been sold to a consumer liable to pay tax under this Act.  2001, c. 23, s. 229 (3).

Disallowance of refund

(4) Where a person has, in accordance with this Act and the regulations, applied for a refund under this Act or the regulations, and the claim is in whole or in part refused, the Minister shall cause to be issued a statement of disallowance and the statement shall specify the amount of the disallowance and the reasons therefor and the statement of disallowance shall be served in the same manner as a notice of assessment under subsection (5).  R.S.O. 1990, c. T.10, s. 19 (4).

Deemed tax

(4.1) A debt due to the Crown under section 8.1 of the Financial Administration Act in respect of a payment or remittance under this Act shall be deemed, when the Minister so assesses under subsection (1), to be tax payable under this Act by the person from whom the payment or remittance is payable, and may be collected and enforced as tax under the provisions of this Act, except that sections 21 and 22 do not apply.  1994, c. 18, s. 8 (9).

Notice of assessment

(5) Where the Minister has made an assessment under subsection (1), (2) or (3), the Minister shall deliver a notice of assessment by personal service or shall send such notice of assessment by mail or registered mail to the person so assessed at the person’s last known address, or where the person has more than one address, one of which is in Ontario, to the address in Ontario, and the amount of the assessment shall, subject to subsection (6), be remitted to the Minister by the person so assessed within thirty days from the date of personal service or mailing of the notice of assessment.  R.S.O. 1990, c. T.10, s. 19 (5); 1994, c. 18, s. 8 (4).

Idem

(6) Where the Minister has made an assessment under subsection (1), (2) or (3), the notice of assessment may provide that the amount assessed is payable forthwith.  R.S.O. 1990, c. T.10, s. 19 (6).

Continuation of liability for tax

(7) Liability for tax imposed by this Act is not affected by an incorrect or incomplete assessment or by the fact that no assessment has been made.  R.S.O. 1990, c. T.10, s. 19 (7).

Minister not bound by returns

(8) The Minister is not bound by a return or information delivered by or on behalf of any person under this Act and may, despite any return or information that has been delivered, assess the tax payable under this Act.  R.S.O. 1990, c. T.10, s. 19 (8).

Assessment valid and binding

(9) An assessment, subject to being varied or vacated on an objection or appeal and subject to a reassessment, shall be deemed to be valid and binding despite any error, defect or omission therein or in any proceeding under this Act relating thereto.  R.S.O. 1990, c. T.10, s. 19 (9).

Idem

(10) The amount of any assessment is payable within the time required by the notice of assessment whether or not an objection or appeal from the assessment is made or taken.  R.S.O. 1990, c. T.10, s. 19 (10).

Limitation

(11) No penalty under subsection (2) shall be made with respect to tax that should have been collected more than four years before the date of the assessment under subsection (2), except that, where the Minister establishes that the person has made any misrepresentation that is attributable to neglect, carelessness or wilful default, or has committed any fraud, in making a return or in supplying any information under this Act or the regulations or in omitting to disclose any information, the Minister may, where the Minister considers it expedient, impose the penalty provided under subsection (2) for tax that should have been collected more than four years before the date of assessment.  R.S.O. 1990, c. T.10, s. 19 (11).

Assessment, non-arm’s length transfers

19.1 (1) In this section,

“member of his or her family” means, in relation to a transferor, the parent, spouse, grandparent, child, grandchild, son-in-law, daughter-in-law, father-in-law or mother-in-law of the transferor; (“membre de sa famille”)

“same-sex partner” means same-sex partner as defined in section 29 of the Family Law Act; (“partenaire de même sexe”)

“spouse” means spouse as defined in section 29 of the Family Law Act. (“conjoint”)  2001, c. 23, s. 230.

Liability to pay

(2) If at any time a person transfers property (including money), either directly or indirectly, by means of a trust or by any other means to a member of his or her family, to his or her same-sex partner, to an individual who is less than 18 years old at the time of the transfer, or to another person with whom the transferor is not dealing at arm’s length, the transferor and transferee are jointly and severally liable to pay under this Act the amount determined under subsection (4).  2001, c. 23, s. 230.

Same

(3) For the purpose of subsection (2), persons shall be deemed not to deal with each other at arm’s length if, by reason of subsections 251 (1) to (6) of the Income Tax Act (Canada), they are related to each other for the purposes of that Act.  2001, c. 23, s. 230.

Amount payable

(4) The amount referred to in subsection (2) is the lesser of “A” and “B” where,

  “A” is the amount, if any, by which the fair market value of the property transferred, at the time of the transfer, exceeds the fair market value, at the time of the transfer, of the consideration given by the transferee for the transfer, and

  “B” is the total of all amounts each of which is,

(a) any tax payable by the transferor under this Act at the time of the transfer or at any previous time but not paid,

(b) any tax collected, collectable or payable but not remitted or transmitted as required under this Act by the transferor for the reporting period during which the transfer took place or any previous reporting period,

(c) any penalty or interest for which the transferor is liable under this Act at the time of the transfer.  2001, c. 23, s. 230.

Same

(5) Nothing in subsection (2) or (4) limits the liability of the transferor or transferee under any other provision of this Act.  2001, c. 23, s. 230.

Assessment

(6) The Minister may assess a transferee at any time in respect of any amount payable by reason of this section, and sections 21 and 22 apply, with necessary modifications, to the assessment.  2001, c. 23, s. 230.

Effect of payment

(7) If a transferor and transferee are jointly and severally liable to pay an amount under this section,

(a) a payment by the transferee on account of the transferee’s liability discharges the joint liability, to the extent of the payment; and

(b) a payment by the transferor on account of the transferor’s liability under this Act discharges the transferee’s liability under this section to the extent that the payment reduces the balance of the transferor’s liability under this Act to an amount less than the amount of the transferee’s liability under this section.  2001, c. 23, s. 230.

Exception

(8) Subsection (2) does not apply with respect to a transfer of property (including money) between spouses or same-sex partners,

(a) under a decree, order or judgment of a competent tribunal; or

(b) under a written separation agreement if, at the time of the transfer, the transferor and transferee were living separate and apart as a result of a breakdown of their relationship.  2001, c. 23, s. 230.

Exemption from payment of interest

20. (1) Repealed:  1994, c. 18, s. 8 (10).

(2) Repealed:  1994, c. 18, s. 8 (10).

Exemption from payment of interest

(3) Where, owing to special circumstances, it is considered inequitable that the whole amount of interest payable by any person under this Act be paid, the Minister may exempt the person from any payment of the whole or any part of such interest.  R.S.O. 1990, c. T.10, s. 20 (3).

Notice of objection

21. (1) A person that objects to an assessment of tax or interest, or the assessment or payment of a penalty or the disallowance of a refund under section 19, may, within 180 days from the day of mailing or delivery by personal service of the notice of assessment or statement of disallowance, serve on the Minister a notice of objection in the form approved by the Minister.  1997, c. 43, Sched. E, s. 1 (1).

Facts and reasons to be given

(1.1) The notice of objection shall,

(a) clearly describe each issue raised by way of objection; and

(b) fully set out the facts and reasons relied on by the person in respect of each issue.  1997, c. 43, Sched. E, s. 1 (1).

Same

(1.2) If a notice of objection does not fully set out the facts and reasons relied on by the person in respect of an issue, the Minister may in writing request the person to provide the information, and the person shall be deemed to have complied with clause (1.1) (b) in respect of the issue if the person provides the information to the Minister in writing within 60 days after the day the request is made by the Minister.  1997, c. 43, Sched. E, s. 1 (1).

Computation of time

(1.3) For the purpose of calculating the number of days mentioned in subsection (1), (1.2) or 22 (1), the day on which a notice of assessment or statement is mailed under subsection (1), a request is made under subsection (1.2) or a notification is given under subsection (3) is the date stated in the notice of assessment, statement, request or notification.  1997, c. 43, Sched. E, s. 1 (1).

Limitation

(1.4) A person shall not raise, by way of objection under this section to a fresh statement or reassessment or to a variation of an assessment or statement under subsection (3), any issue that the person is not entitled to raise by way of appeal under section 22 in respect of the fresh statement or reassessment or of a variation of the assessment or statement.  1997, c. 43, Sched. E, s. 1 (1).

Service

(2) A notice of objection under this section shall be served by being sent by registered mail addressed to the Minister or by such other method of service as the Minister prescribes.  R.S.O. 1990, c. T.10, s. 21 (2); 1997, c. 43, Sched. E, s. 1 (2).

Minister to reconsider

(3) Upon receipt of a notice of objection, the Minister shall with all due dispatch reconsider the assessment or disallowance or penalty objected to and vacate, confirm or vary the assessment or disallowance or penalty or reassess or serve a fresh statement of disallowance, and the Minister shall thereupon notify the person making the objection of his or her action in writing.  R.S.O. 1990, c. T.10, s. 21 (3); 1997, c. 43, Sched. E, s. 1 (3).

Appeal

22. (1) After the Minister has given the notification required by subsection 21 (3), a person who has served notice of objection under section 21 may appeal to the Superior Court of Justice to have the assessment, statement of disallowance or penalty vacated or varied or reassessed, but no appeal under this section shall be instituted after the expiration of ninety days from the day notice has been mailed to such person under subsection 21 (3).  R.S.O. 1990, c. T.10, s. 22 (1); 2001, c. 23, s. 231 (1).

Appeal, how instituted

(2) An appeal to the Superior Court of Justice shall be instituted by,

(a) filing a notice of appeal with the court in the form approved by the Minister;

(b) paying a fee to the court in the same amount and manner as the fee payable under regulations made under the Administration of Justice Act on the issue of a statement of claim; and

(c) serving on the Minister a copy of the notice of appeal as filed.  1997, c. 43, Sched. E, s. 2; 2001, c. 23, s. 231 (2).

Limitation

(2.1) A person is entitled to raise by way of appeal only those issues raised by the person in a notice of objection to the assessment or statement being appealed and in respect of which the person has complied or was deemed to have complied with subsection 21 (1.1).  1997, c. 43, Sched. E, s. 2.

Exception

(2.2) Despite subsection (2.1), a person may raise by way of appeal an issue forming the basis of a fresh statement or reassessment or of a variation of an assessment or statement under subsection 21 (3) if the issue was not part of the assessment or statement with respect to which the person served the notice of objection.  1997, c. 43, Sched. E, s. 2.

Application, subss. (2.1) and (2.2)

(2.3) Subsections (2.1) and (2.2) apply only in respect of appeals in respect of which the period of 90 days referred to in subsection (1) begins after December 31, 1997.  1997, c. 43, Sched. E, s. 2.

Waived right of objection or appeal

(2.4) Despite subsection (1), no person shall institute an appeal under this section to have an assessment or statement vacated or varied in respect of an issue for which the right of objection or appeal has been waived in writing by or on behalf of the person.  1997, c. 43, Sched. E, s. 2.

Service

(3) A notice of appeal shall be served on the Minister by being sent by registered mail addressed to the Minister.  R.S.O. 1990, c. T.10, s. 22 (3).

Content of notice of appeal

(4) The person appealing shall set out in the notice of appeal a statement of the allegations of fact and the statutory provisions and reasons that the person intends to submit in supporting the appeal.  R.S.O. 1990, c. T.10, s. 22 (4).

Reply to notice of appeal

(5) The Minister shall, with all due dispatch, serve on the appellant and file with the court a reply to the notice of appeal admitting or denying the facts alleged and containing a statement of the allegations of fact and of the statutory provisions and reasons the Minister intends to rely on.  2000, c. 42, s. 109 (1).

Same

(5.1) If the Minister does not serve the reply within 180 days after the notice under subsection (2) is served on him or her, the appellant may, upon 21 days notice to the Minister, apply to the court for an order requiring the reply to be served within such time as a judge shall order.  2000, c. 42, s. 109 (1).

Same

(5.2) If the judge considers it proper in the circumstances, the judge may also order that, upon the failure of the Minister to serve the reply in the time specified by the order, the assessment or statement of disallowance with respect to which the appeal is made shall be vacated and any tax levied pursuant to the assessment shall be repaid to the appellant or the refund disallowed shall be paid to the appellant.  2000, c. 42, s. 109 (1).

Same

(5.3) Nothing in this section revives an appeal that is void or affects a statement of disallowance or assessment that has become valid and binding.  2000, c. 42, s. 109 (1).

Matter deemed action

(6) Upon the filing of the material referred to in subsection (5), the matter shall be deemed to be an action in the court.  R.S.O. 1990, c. T.10, s. 22 (6).

Disposition of appeal

(7) The court may dispose of the appeal by such order as it considers just and the Minister shall, subject to the final decision of any court to which the order is appealed, vacate or vary, where necessary, the assessment or statement of disallowance so as to carry out the final order of the court.  R.S.O. 1990, c. T.10, s. 22 (7).

Idem

(8) The court may, in delivering judgment disposing of an appeal, order payment or refund of tax or penalty by the appellant or by the Minister, as the case may be, and may make such order as to costs as is considered proper.  R.S.O. 1990, c. T.10, s. 22 (8); 1994, c. 18, s. 8 (4).

Procedure

(9) The practice and procedure of the Superior Court of Justice, including the right of appeal and the practice and procedure relating to appeals, apply to every matter that is deemed to be an action under subsection (6), and every judgment and order given or made in every such action may be enforced in the same manner and by the like process as a judgment or order given or made in an action commenced in the court.  R.S.O. 1990, c. T.10, s. 22 (9); 2001, c. 23, s. 231 (3).

Irregularities

(10) No assessment or statement of disallowance shall be vacated or varied on appeal by reason only of an irregularity, informality, omission or error on the part of any person in the observance of any directory provision of this Act.  R.S.O. 1990, c. T.10, s. 22 (10); 2000, c. 42, s. 109 (2).

Extension of time

(11) The time within which a notice of objection or a notice of appeal is to be served may be extended by the Minister if application for extension is made,

(a) in respect of a notice of objection under subsection 21 (1),

(i) before the expiration of the time allowed under that subsection for service of notice of the objection, or

(ii) within one year from the day of mailing or delivery by personal service of the notice of assessment or statement of disallowance that is the subject of the objection where the person wishing to make objection furnishes to the Minister an explanation satisfactory to the Minister that explains why the notice of objection could not be served in accordance with subsection 21 (1); or

(b) in respect of a notice of appeal, before the expiration of the time allowed under subsection (1) of this section for the service of the notice of appeal.  R.S.O. 1990, c. T.10, s. 22 (11).

Records to be kept

22.1 (1) Every collector, importer, exporter, interjurisdictional transporter, wholesaler, retail dealer or manufacturer shall keep at its principal place of business in Ontario records and books of account in the form and containing the information that will enable the accurate determination of the tax collectable and payable under this Act.  2000, c. 42, s. 110.

Same, tear tape

(1.1) Every holder of a permit to mark or stamp cigarettes or to manufacture tear tape shall keep at its principal place of business in Ontario records and books of account in the form and containing the information that will enable the accurate determination of tear tapes that have been manufactured for use in Ontario or used in marking packages of cigarettes for sale in Ontario.  2001, c. 23, s. 232 (1).

Same

(2) Every person referred to in subsection (1) or (1.1) shall maintain the records and books of account, as well as any other document necessary to verify the information in the records and books, for a period of seven years following the end of the person’s fiscal year to which the records and books relate, unless written permission for their disposal is received from the Minister.  2000, c. 42, s. 110; 2001, c. 23, s. 232 (2).

Investigation

23. (1) Any person thereunto authorized by the Minister for any purpose related to the administration or enforcement of this Act may at all reasonable times enter into any premises or place where any business is carried on or any property is kept or anything is done in connection with any business or any books or records are or should be kept pursuant to this Act, and may,

(a) audit or examine any books and records and any account, voucher, letter, telegram or other document that relates or may relate to the tax imposed by this Act;

(b) examine the property described by an inventory or any property, process or matter, an examination of which may, in his or her opinion, assist in determining the accuracy of an inventory or in ascertaining the information that is or should be in the books or the amount of any tax imposed by this Act;

(b.1) examine any inventory of cigarettes, and any individual packages of cigarettes in any inventory, in the premises or place;

(c) require a dealer liable to collect or pay over or considered possibly liable to collect or pay over tax imposed under this Act, or, if such dealer is a partnership or corporation, require a partner or the president, manager, secretary or any director, agent or representative thereof and any other person on the premises of such dealer to give him or her all reasonable assistance with the audit or examination, or the determination by him or her of the retail price of any tobacco sold, and to answer all questions relating to such audit, examination or determination, either orally or, if he or she so requires, in writing, on oath or by statutory declaration, and for that purpose require such person to attend at the premises or place with him or her; and

(d) if during the course of an audit or examination it appears to him or her that there has been a contravention of this Act or the regulations, seize and take away any of the records, books, accounts, vouchers, letters, telegrams or other documents and retain them until they are produced in any court proceedings.  R.S.O. 1990, c. T.10, s. 23 (1); 1992, c. 28, s. 1 (3).

Idem

(2) Every holder of a permit to mark or stamp cigarettes shall permit any person authorized for the purpose by the Minister to enter any mark-point or designated warehouse operated by the holder during normal business hours and the authorized person may,

(a) audit or examine any books and records and any account, voucher, letter, telegram or other document that is kept at the mark-point;

(b) examine the property described in an inventory or any other property, process or matter, the examination of which may, in the person’s opinion, assist in determining the accuracy of an inventory or in ascertaining information that is or should be in the books or records or in a return, or the amount of any tax imposed by this Act; and

(c) examine any inventory of,

(i) marked or unmarked cigarettes,

(ii) used or unused indicia, and

(iii) used or unused containers or materials designed to pack cigarettes.  R.S.O. 1990, c. T.10, s. 23 (2).

Investigation, tear tape manufacturer

(2.1) Every holder of a permit to manufacture tear tape shall permit any person authorized for the purpose by the Minister to,

(a) audit or examine any books and records and any account, voucher, letter, telegram or other document that may relate to the manufacture, sale, distribution or delivery of tear tape;

(b) examine the property described in an inventory or any other property, process or matter, the examination of which may, in the person’s opinion, assist in determining the accuracy of an inventory or in ascertaining information that is or should be in the books or records or in a return; and

(c) examine any inventory of tear tape and materials used to manufacture tear tape.  2001, c. 23, s. 233.

Demand for information

(3) The Minister may, by registered letter or by a demand served personally, require from any person, partnership, syndicate, trust or corporation or from his, her or its agent or officer any information, additional information, a return, a more complete or sufficient return or the production or production under oath of any books, letters, accounts, invoices, statements, financial or otherwise, or other documents in the possession or control of such person, partnership, syndicate, trust or corporation or of his, her or its agent or officer for the purpose of administering or enforcing this Act or of determining what tax, if any, is collectable or payable under this Act and production of such information or documentation shall be made within such reasonable time as is stipulated in such registered letter or demand.  R.S.O. 1990, c. T.10, s. 23 (3).

Demand to keep records

(4) Upon giving notice by registered letter or by demand served personally or by courier, the Minister may require any person who fails or refuses to keep adequate records and books of account to keep those records and books of account specified in the notice for the length of time required by the Minister.  2000, c. 42, s. 111.

Copies

(5) Where a book, record or other document has been seized, examined or produced under this section, the person by whom it is seized or examined or to whom it is produced, or any officer of the Ministry of Finance, may make, or cause to be made, one or more copies thereof, and a document purporting to be certified by the Minister or a person thereunto authorized by the Minister to be a copy made under this subsection is admissible in evidence and has the same probative force as the original document would have had if it had been proved in the ordinary way.  R.S.O. 1990, c. T.10, s. 23 (5); 1994, c. 18, s. 8 (11).

Admission of evidence

(5.1) The Minister, or a person authorized by the Minister, may, for any purpose relating to the administration and enforcement of this Act, reproduce from original data stored electronically any document previously issued by the Minister under this Act, and the electronically reproduced document is admissible in evidence and shall have the same probative force as the original would have had if it had been proved in the ordinary way.  1994, c. 18, s. 8 (12).

Same

(5.2) If a return, document or any other information has been delivered by a person to the Minister on computer disk or other electronic medium, or by electronic filing as permitted under this Act, a document, accompanied by the certificate of the Minister, or of a person authorized by the Minister, stating that the document is a print-out of the return, document or information received by the Minister from the person and certifying that the information contained in the document is a true and accurate representation of the return, document or information delivered by the person, is admissible in evidence and shall have the same probative force as the original return, document or information would have had if it had been delivered in paper form.  1994, c. 18, s. 8 (12).

Same

(5.3) If the data contained on a return or other document received by the Minister from a person is stored electronically by the Minister on computer disk or other electronic medium and the return or other document has been destroyed by a person so authorized by the Minister, a document, accompanied by the certificate of the Minister, stating that the document is a print-out of the data contained on the return and other document received and stored electronically by the Minister and certifying that the information contained in the document is a true and accurate representation of the data contained on the return or document delivered by the person, is admissible in evidence and shall have the same probative force as the original return or document would have had if it had been proved in the ordinary way.  1994, c. 18, s. 8 (12).

Interference

(6) No person shall hinder or molest or interfere with any person doing anything that he or she is authorized by this section to do, or prevent or attempt to prevent any person doing any such thing.  R.S.O. 1990, c. T.10, s. 23 (6).

Inventory report

(7) The Minister at any time for any purpose related to the administration or enforcement of this Act and the regulations may require a dealer to complete an inventory report showing all tobacco in the dealer’s possession.  R.S.O. 1990, c. T.10, s. 23 (7).

Seizure of unmarked cigarettes

23.1 (1) If, on an inspection under subsection 23 (1), a person authorized by the Minister discovers that a wholesaler or retail dealer is in possession of unmarked cigarettes, and the person has reasonable and probable grounds to believe that the possession is contrary to the provisions of clause 29 (1) (b), the person may, subject to subsection (2), seize, impound, hold and dispose of the unmarked cigarettes.  2004, c. 31, Sched. 36, s. 8.

Application to court

(2) Unmarked cigarettes seized under subsection (1) are forfeited to Her Majesty to be disposed of as the Minister directs unless, within 30 days following the seizure, the person from whom the unmarked cigarettes were seized, or the owner of the unmarked cigarettes, applies to the Superior Court of Justice to establish the right to possession of the unmarked cigarettes.  2004, c. 31, Sched. 36, s. 8.

Right to possession of unmarked cigarettes

(3) For the purposes of an application under subsection (2), the applicant has a right to possession of the cigarettes if, at the time the seizure was made, the premises from which the unmarked cigarettes were seized was a mark-point or designated warehouse and the applicant was the holder of a valid permit issued under subsection 9 (1) with respect to the premises.  2004, c. 31, Sched. 36, s. 8.

Disposal pending final determination by court

(4) Where a final order is not made within 60 days after the filing of an application under subsection (2), the Minister may dispose of the unmarked cigarettes and retain the proceeds, if any, pending the determination of the application.  2004, c. 31, Sched. 36, s. 8.

Order

(5) If the court is satisfied on an application under subsection (2) that the applicant has a right to possession of the unmarked cigarettes, the court may order that the unmarked cigarettes be returned to the applicant or that the proceeds of sale of the unmarked cigarettes be paid to the applicant.  2004, c. 31, Sched. 36, s. 8.

Forfeiture after dismissal of application

(6) On dismissal of an application under subsection (2) and the expiry of the appeal period provided therefor, the unmarked cigarettes are forfeited to Her Majesty to be disposed of as the Minister directs.  2004, c. 31, Sched. 36, s. 8.

Proceeds of sale

(7) Where a sale of unmarked cigarettes is authorized under subsection (2) or (6), or where the proceeds of a sale are retained under subsection (4) and the application is dismissed, the proceeds of the sale remaining after payment of the costs incurred by the Minister in seizing, storing and disposing of the unmarked cigarettes shall be paid into the Consolidated Revenue Fund.  2004, c. 31, Sched. 36, s. 8.

Detention of vehicles, etc.

24. (1) For any purpose relating to the administration and enforcement of this Act and the regulations, any person authorized for the purpose by the Minister who has reasonable and probable grounds to believe that the vehicle, trailer attached to a vehicle, vessel, railway equipment on rails or aircraft contains evidence of any contravention of this Act,

(a) may, without warrant, stop and detain any vehicle, including any trailer attached to the vehicle, any vessel, railway equipment on rails or aircraft;

(b) may examine the contents thereof including any cargo, manifests, records, accounts, vouchers, papers or things that may afford evidence as to the contravention of this Act or the regulations;

(c) subject to subsections (2), (2.2) and (2.4), may seize and take away any of the manifests, records, accounts, vouchers, papers or things and retain them until they are produced in any court proceedings; and

(d) may use any investigative technique, procedure or test that is, in the person’s opinion, necessary to determine whether cigarettes found during a detention are marked or stamped in accordance with this Act and the regulations.  R.S.O. 1990, c. T.10, s. 24 (1); 1991, c. 48, s. 4; 2004, c. 31, Sched. 36, s. 9 (1).

Application for retention of documents

(2) If documents are seized under subsection (1), the Minister shall, within 14 days, apply to a justice under the Provincial Offences Act for an order to permit the retention of the documents.  2004, c. 31, Sched. 36, s. 9 (2).

Application to include information under oath

(2.1) An application under subsection (2) must be supported by information under oath from a person who has reasonable and probable grounds for believing that the documents may afford evidence of a contravention of this Act or the regulations.  2004, c. 31, Sched. 36, s. 9 (2).

Order of justice re seized documents

(2.2) If the justice who considers an application under subsection (2) is satisfied, on reasonable grounds, that documents seized may afford evidence of a contravention of this Act or the regulations, the justice may, without notice, order that the documents be retained by a person named in the order for no longer than three months from the date of seizure and may make any provisions that, in the opinion of the justice, are necessary for the preservation of the documents.  2004, c. 31, Sched. 36, s. 9 (2).

Same

(2.3) If the justice who considers an application under subsection (2) is not satisfied, on reasonable grounds, that documents seized may afford evidence of a contravention of this Act or the regulations, he or she may direct that the documents be returned to the person from whom they were seized.  2004, c. 31, Sched. 36, s. 9 (2).

Time limit for retention

(2.4) No documents shall be retained under an order made under subsection (2.2) for a period of more than three months from the date of seizure unless, before the expiry of that period,

(a) an application to the justice is made for retention of the documents for an additional period and the justice is satisfied that, having regard to the nature of the inspection, the further retention of the documents for a specified period is warranted and makes an order for the continuing retention of the documents for the specified period;

(b) a proceeding is instituted in which the retained document may be required; or

(c) the owner of the documents consents to the continued retention of the documents.  2004, c. 31, Sched. 36, s. 9 (2).

Seizure and disposal of tobacco

(3) Subject to subsections (4), (4.1), (5) and (6), a person who is authorized by the Minister for the purpose may seize, impound, hold and dispose of tobacco found following a detention under subsection (1) if one of the following circumstances exists:

1. More than 200 unmarked cigarettes are found in the control of a person who does not hold a permit under subsection 9 (1) and who is not otherwise authorized by this Act or the regulations to purchase, possess, store, sell or transport unmarked cigarettes.

2. More than 200 unmarked cigarettes are being transported or stored in Ontario for a person described in paragraph 1.

3. Tobacco in bulk is found in the control of a person who has not been designated as a collector under subsection 4 (1) or (1.3), does not hold a registration certificate under subsection 5 (1) or 7 (1) and does not hold a permit under subsection 3 (1) or 8 (2).

4. Tobacco in bulk is being transported or stored in Ontario for a person described in paragraph 3.  2004, c. 31, Sched. 36, s. 9 (3).

Saving, tobacco in bulk

(4) Despite subsection (3), if tobacco found following a detention under subsection (1) is tobacco in bulk, no seizure, impounding, holding or disposal shall be made of the tobacco in bulk if the person from whom it would have been seized,

(a) is an interjurisdictional transporter registered under subsection 6 (1) who has the documents described in subsection 6 (5) in his, her or its possession;

(b) holds a wholesaler’s permit under subsection 3 (1) and can provide proof satisfactory to the person authorized by the Minister for the purposes of subsection (3) that the tobacco in bulk was purchased from a collector;

(c) holds a vendor’s permit issued under the Retail Sales Tax Act and can provide proof satisfactory to the person authorized by the Minister that the tobacco in bulk was purchased from a registered wholesaler; or

(d) has in the person’s possession the original or a true copy of a transit permit issued to the owner of the tobacco in bulk under subsection 10 (1).  R.S.O. 1990, c. T.10, s. 24 (4); 1998, c. 34, s. 107; 2004, c. 31, Sched. 36, s. 9 (4, 5).

Saving, unmarked cigarettes

(4.1) Despite subsection (3), where tobacco found following a detention under subsection (1) is in the form of unmarked cigarettes, no seizure, impounding, holding or disposal shall be made of the tobacco if the person from whom it would have been seized,

(a) is an interjurisdictional transporter registered under subsection 6 (1) who has the documents and information described in subsection 6 (5) in their possession; or

(b) has in their possession the original or a true copy of a transit permit issued to the owner of the unmarked cigarettes under subsection 10 (1).  2004, c. 31, Sched. 36, s. 9 (6).

Application

(5) Tobacco seized under subsection (3) is forfeited to Her Majesty to be disposed of as the Minister directs unless, within thirty days following the seizure, the person from whom the tobacco was seized, or the owner of the tobacco, applies to the Superior Court of Justice to establish the right to possess the tobacco.  R.S.O. 1990, c. T.10, s. 24 (5); 2001, c. 23, s. 234 (1); 2004, c. 31, Sched. 36, s. 9 (7).

Right to possession of tobacco

(6) For the purposes of an application under subsection (5), the applicant has a right to possession of the tobacco if the owner, or the person for whom the tobacco was being transported, was, at the time the seizure was made, a person specified in subsection (3), (4) or (4.1) as someone from whom tobacco was not to be seized.  2004, c. 31, Sched. 36, s. 9 (8).

Order

(7) Where, on an application under subsection (5), the court is satisfied that the applicant has the right to possession of the tobacco, the court may order that the tobacco be returned to the applicant or that the proceeds of sale of the tobacco be paid to the applicant.  R.S.O. 1990, c. T.10, s. 24 (7); 2004, c. 31, Sched. 36, s. 9 (9).

Disposal pending final determination by court

(8) Where a final order has not been made under subsection (7) within sixty days after the filing of the application under subsection (5), the Minister may dispose of the tobacco and retain the proceeds pending the determination of the application.  R.S.O. 1990, c. T.10, s. 24 (8); 2004, c. 31, Sched. 36, s. 9 (9).

Forfeiture after dismissal of application

(9) Upon dismissal of an application under subsection (5) and the expiry of the appeal period provided therefor, the tobacco is forfeited to Her Majesty to be disposed of as the Minister directs.  R.S.O. 1990, c. T.10, s. 24 (9); 2004, c. 31, Sched. 36, s. 9 (9).

Proceeds of sale

(10) Where a sale of tobacco is directed under subsection (5) or (9), or where the proceeds of a sale are retained under subsection (8) and the application is dismissed, the proceeds of the sale remaining after payment of the costs incurred by the Minister in seizing, storing and disposing of the tobacco shall be paid into the Consolidated Revenue Fund.  R.S.O. 1990, c. T.10, s. 24 (10); 2004, c. 31, Sched. 36, s. 9 (9).

Definition

(11) For the purposes of this section,

“vehicle” means a motor vehicle to which a number plate is attached as required by the Highway Traffic Act and includes anything attached to the motor vehicle.  1994, c. 18, s. 8 (13).

Penalty

(12) Every person from whom tobacco is seized under subsection (3) shall pay a penalty, when assessed therefor, equal to three times the tax that would have been payable under section 2 if the seized tobacco had been sold to a consumer liable to pay tax under this Act.  2004, c. 31, Sched. 36, s. 9 (10).

Saving

(13) No penalty shall be assessed under subsection (12) in respect of any person where an order has been made under subsection (7).  R.S.O. 1990, c. T.10, s. 24 (13).

Trust for money collected

24.1 (1) Any amount collected or collectable as or on account of tax under this Act by a collector or registered importer shall be deemed, despite any security interest in the amount so collected or collectable, to be held in trust for Her Majesty in right of Ontario and separate and apart from the person’s property and from property held by any secured creditor that but for the security interest would be the person’s property and shall be paid over by the person in the manner and at the time provided under this Act and the regulations.  1997, c. 43, Sched. E, s. 3.

Extension of trust

(2) Despite any provision of this or any other Act, where at any time an amount deemed by subsection (1) to be held in trust is not paid as required under this Act, property of the collector or registered importer and property held by any secured creditor of the person that but for a security interest would be property of the person, equal in value to the amount so deemed to be held in trust shall be deemed,

(a) to be held, from the time the amount was collected or collectable by the person, separate and apart from the property of the person in trust for Her Majesty in right of Ontario whether or not the property is subject to a security interest; and

(b) to form no part of the estate or property of the person from the time the amount was so collected or collectable whether or not the property has in fact been kept separate and apart from the estate or property of the person and whether or not the property is subject to such security interest.  1997, c. 43, Sched. E, s. 3.

Same

(3) The property described in subsection (2) shall be deemed to be beneficially owned by Her Majesty in right of Ontario despite any security interest in such property or in the proceeds of such property, and the proceeds of such property shall be paid to the Minister in priority to all such security interests.  1997, c. 43, Sched. E, s. 3.

Exception

(4) This section and subsection 26 (2.1) do not apply in proceedings to which the Bankruptcy and Insolvency Act (Canada) or the Companies’ Creditors Arrangement Act (Canada) apply.  1997, c. 43, Sched. E, s. 3.

Minister’s certificate

(5) Every person who, as assignee, liquidator, administrator, receiver, receiver-manager, secured or unsecured creditor or agent of the creditor, trustee or other like person, other than a trustee appointed under the Bankruptcy and Insolvency Act (Canada), takes control or possession of the property of any collector or registered importer shall, before distributing such property or the proceeds from the realization thereof under that person’s control, obtain from the Minister a certificate that the amount deemed by subsection (1) to be held in trust, including any interest and penalties payable by the collector or registered importer, has been paid or that security acceptable to the Minister has been given.  1997, c. 43, Sched. E, s. 3.

No distribution without Minister’s certificate

(6) Any person described in subsection (5) who distributes any property described in that subsection or the proceeds of the realization thereof without having obtained the certificate required by that subsection is personally liable to Her Majesty in right of Ontario for an amount equal to the amount deemed by subsection (1) to be held in trust, including any interest and penalties payable by the collector or registered importer.  1997, c. 43, Sched. E, s. 3.

Notice to be given

(7) The person described in subsection (5) shall, within 30 days from the date of that person’s assumption of possession or control, give written notice thereof to the Minister.  1997, c. 43, Sched. E, s. 3.

Minister to advise of indebtedness

(8) As soon as practicable after receiving such notice, the Minister shall advise the person described in subsection (5) of the amount deemed by subsection (1) to be held in trust, including any interest and penalties thereon.  1997, c. 43, Sched. E, s. 3.

Definitions

(9) In this section and in subsection 26 (2.1),

“secured creditor” means a person who has a security interest in the property of another person or who acts for or on behalf of that person with respect to the security interest, and includes a trustee appointed under a trust deed relating to a security interest, a receiver or receiver-manager appointed by a secured creditor or by a court on the application of a secured creditor and any other person performing a similar function; (“créancier garanti”)

“security interest” means any interest in property that secures payment or performance of an obligation, and includes an interest created by or arising out of a debenture, mortgage, lien, pledge, charge, deemed or actual trust, assignment or encumbrance of any kind whatsoever or whenever arising, created or deemed to arise or otherwise provided for, but does not include a security interest prescribed by the Minister as one to which this section does not apply. (“sûreté”)  1997, c. 43, Sched. E, s. 3.

Application

(10) This section, subsection 25.1 (11.1) and clauses 30.1 (2) (b) and (c) apply in respect of any tax collected or collectable by a collector or registered importer on or after January 1, 1998, whether or not the security interest was acquired before that date.  1997, c. 43, Sched. E, s. 3.

Recovery of tax

25. (1) Upon default of payment by any person of any amount payable, or to be remitted under this Act as tax, interest, or a penalty, other than a penalty imposed as a result of a prosecution for an offence under this Act,

(a) the Minister may bring an action for recovery thereof in any court in which a debt or money demand of a similar amount may be collected, and every such action shall be brought and executed in and by the name of the Minister or his or her name of office and may be continued by his or her successor in office as if no change had occurred and shall be tried without a jury; and

(b) the Minister may issue a warrant directed to the sheriff for any area in which any property of a person liable to make a payment or remittance under this Act is located or situate for the amount of the tax, interest and penalty or any of them owing by the person, together with interest thereon from the date of the issue of the warrant and the costs and expenses of the sheriff, and such warrant has the same force and effect as a writ of execution issued out of the Superior Court of Justice.  R.S.O. 1990, c. T.10, s. 25 (1); 2001, c. 23, s. 235.

Security for tax

(2) Where the Minister considers it advisable to do so, the Minister may accept security for the payment of taxes in any form the Minister considers appropriate.  R.S.O. 1990, c. T.10, s. 25 (2).

Compliance to be proved by affidavit

(3) For the purpose of any proceeding taken under this Act, the facts necessary to establish compliance on the part of the Minister with this Act as well as the failure of any person, partnership, syndicate, trust or corporation to comply with the requirements of this Act shall, unless evidence to the contrary satisfactory to the court is adduced, be sufficiently proved in any court of law by affidavit of the Minister or of any officer of the Ministry of Finance.  R.S.O. 1990, c. T.10, s. 25 (3); 1996, c. 29, s. 32.

Remedies for recovery of tax

(4) The use of any of the remedies provided by this section does not bar or affect any of the other remedies therein provided, and the remedies provided by this Act for the recovery and enforcement of the payment of any tax imposed by this Act are in addition to any other remedies existing by law, and no action or other proceeding taken in any way prejudices, limits or affects any lien, charge or priority existing under this Act or at law in favour of Her Majesty in right of Ontario.  R.S.O. 1990, c. T.10, s. 25 (4).

Lien on taxpayer’s property

25.1 (1) Any tax payable or required to be remitted under this Act by any taxpayer is, upon registration by the Minister in the proper land registry office of a notice claiming a lien and charge conferred by this section, a lien and charge on any interest the taxpayer liable to pay or remit the tax has in the real property described in the notice.  1994, c. 18, s. 8 (14).

Lien on personal property

(2) Any tax payable or required to be remitted under this Act by any taxpayer is, upon registration by the Minister with the registrar under the Personal Property Security Act of a notice claiming a lien and charge under this section, a lien and charge on any interest in personal property in Ontario owned or held at the time of registration or acquired afterwards by the taxpayer liable to pay or remit the tax.  1994, c. 18, s. 8 (14).

Amounts included and priority

(3) The lien and charge conferred by subsection (1) or (2) is in respect of all amounts for which the taxpayer is liable under this Act at the time of registration of the notice or any renewal of it and all amounts for which the taxpayer afterwards becomes liable while the notice remains registered and, upon registration of a notice of lien and charge, the lien and charge has priority over,

(a) any perfected security interest registered after the notice is registered;

(b) any security interest perfected by possession after the notice is registered; and

(c) any encumbrance or other claim that is registered against or that otherwise arises and affects the taxpayer’s property after the notice is registered.  1994, c. 18, s. 8 (14).

Exception

(4) For the purposes of subsection (3), a notice of lien and charge under subsection (2) does not have priority over a perfected purchase money security interest in collateral or its proceeds and shall be deemed to be a security interest perfected by registration for the purpose of the priority rules under section 28 of the Personal Property Security Act.  1994, c. 18, s. 8 (14).

Lien effective

(5) A notice of lien and charge under subsection (2) is effective from the time assigned to its registration by the registrar or branch registrar and expires on the fifth anniversary of its registration unless a renewal notice of lien and charge is registered under this section before the end of the five-year period, in which case the lien and charge remains in effect for a further five-year period from the date the renewal notice is registered.  1994, c. 18, s. 8 (14); 2001, c. 23, s. 236 (1).

Same

(6) If taxes remain outstanding and unpaid at the end of the period, or its renewal, referred to in subsection (5), the Minister may register a renewal notice of lien and charge; the lien and charge remains in effect for a five-year period from the date the renewal notice is registered, until the amount is fully paid, and shall be deemed to be continuously registered since the initial notice of lien and charge was registered under subsection (2).  2001, c. 23, s. 236 (2).

Where taxpayer not registered owner

(7) Where a taxpayer has an interest in real property but is not shown as its registered owner in the proper land registry office,

(a) the notice to be registered under subsection (1) shall recite the interest of the taxpayer in the real property; and

(b) a copy of the notice shall be sent to the registered owner at the owner’s address to which the latest notice of assessment under the Assessment Act has been sent.  1994, c. 18, s. 8 (14).

Secured party

(8) In addition to any other rights and remedies, if taxes or other amounts owed by a taxpayer remain outstanding and unpaid, the Minister has, in respect of a lien and charge under subsection (2),

(a) all the rights, remedies and duties of a secured party under sections 17, 59, 61, 62, 63 and 64, subsections 65 (4), (5), (6) and (7) and section 66 of the Personal Property Security Act;

(b) a security interest in the collateral for the purpose of clause 63 (4) (c) of that Act; and

(c) a security interest in the personal property for the purposes of sections 15 and 16 of the Repair and Storage Liens Act, if it is an article as defined in that Act.  1994, c. 18, s. 8 (14).

Registration of documents

(9) A notice of lien and charge under subsection (2) or any renewal of it shall be in the form of a financing statement or a financing change statement as prescribed under the Personal Property Security Act and may be tendered for registration at a branch office established under Part IV of that Act, or by mail addressed to an address prescribed under that Act.  1994, c. 18, s. 8 (14).

Errors in documents

(10) A notice of lien and charge or any renewal thereof is not invalidated nor is its effect impaired by reason only of an error or omission in the notice or in its execution or registration, unless a reasonable person is likely to be materially misled by the error or omission.  1994, c. 18, s. 8 (14).

Bankruptcy and Insolvency Act (Canada) unaffected

(11) Subject to Crown rights provided under section 87 of the Bankruptcy and Insolvency Act (Canada), nothing in this section affects or purports to affect the rights and obligations of any person under this Act.  1994, c. 18, s. 8 (14).

Effect of deemed trust

(11.1) The registration of a notice of lien and charge under this section does not affect the operation of section 24.1 and shall apply to secure any liability of a taxpayer in addition to any deemed trust under that section.  1997, c. 43, Sched. E, s. 4.

Definitions

(12) In this section,

“real property” includes fixtures and any interest of a taxpayer as lessee of real property; (“bien immeuble”)

“taxpayer” means any person assessed under this Act for tax, interest or penalties. (“contribuable”)  1994, c. 18, s. 8 (14).

Garnishment

26. (1) When the Minister has knowledge or suspects that a person (a “third party”) is, or within 365 days will become, indebted or liable to make any payment to a person (a “tax debtor”) liable to make a payment or remittance under this Act, the Minister may, by registered letter or by letter served personally, require the third party to promptly pay to the Minister any money that is otherwise payable by the third party to the tax debtor in whole or in part during the 365 days after the third party receives the letter.  2001, c. 23, s. 237 (1).

Idem

(2) The receipt of the Minister for money paid as required under this section is a good and sufficient discharge of the original liability to the extent of the payment.  R.S.O. 1990, c. T.10, s. 26 (2); 1994, c. 18, s. 8 (4).

Same

(2.1) Despite any provision of this or any other Act, when the Minister has knowledge or suspects that a person is, or within 365 days will become, indebted or liable to make any payment to,

(a) a person whose property is subject to the deemed trust created by subsection 24.1 (1); or

(b) a secured creditor who has a right to receive the payment that, but for a security interest in favour of the secured creditor, would be payable to the person referred to in clause (a),

the Minister may by ordinary mail or by demand served personally, require the first-named person to pay forthwith to the Minister on account of the liability of the person referred to in clause (a) all or part of the money that would otherwise be paid, and any such payment shall become the property of Her Majesty in right of Ontario despite any security interest in it and shall be paid to the Minister in priority to any such security interest.  1997, c. 43, Sched. E, s. 5; 2001, c. 23, s. 237 (2).

Application

(2.2) Subsection (2.1) applies to amounts that become subject to a deemed trust under subsection 24.1 (1) on or after January 1, 1998, whether or not the security interest was acquired before that date.  1997, c. 43, Sched. E, s. 5.

Liability of debtor

(3) Every person who has discharged any liability to a person liable to make a payment or remittance under this Act without complying with the requirements under this section is liable to pay to the Minister an amount equal to the liability discharged or the amount the person was required under this section to pay to the Minister, whichever is the lesser.  R.S.O. 1990, c. T.10, s. 26 (3); 1994, c. 18, s. 8 (4).

Service of garnishee

(4) If a person (a “third party”) who is, or within 365 days will become, indebted or liable to make a payment to a person liable to make a payment or remittance under this Act carries on business under a name or style other than the third party’s own name, the letter under this section from the Minister to the third party may be addressed using the name or style under which the third party carries on business and, in the case of personal service, the letter shall be deemed to have been validly served if it is left with an adult employed at the place of business of the addressee.  2001, c. 23, s. 237 (3).

Same

(5) If persons (“partners”) who are, or within 365 days will become, indebted or liable to make a payment to a person liable to make a payment or remittance under this Act carry on business in partnership, the letter under this section from the Minister to the partners may be addressed to the partnership name and, in the case of personal service, the letter shall be deemed to have been validly served if it is served on a partner or left with an adult employed at the place of business of the partnership.  2001, c. 23, s. 237 (3).

Garnishment of wages

(6) Subject to the Wages Act, where the Minister has under this section required an employer to pay to the Minister on account of an employee’s liability under this Act money otherwise payable by the employer to the employee as remuneration, the requirement is applicable to all future payments by the employer to the employee in respect of remuneration until the liability under this Act is satisfied and operates to require payments to the Minister out of each payment of remuneration of such amount as may be stipulated by the Minister in the registered letter or letter served personally.  R.S.O. 1990, c. T.10, s. 26 (6); 1994, c. 18, s. 8 (4).

Failure to remit

(7) Where any person, without reasonable excuse, has failed to remit to the Minister the money as required under this section, the Minister may apply to the Superior Court of Justice for an order directing such person to remit the money which the person has failed to remit.  R.S.O. 1990, c. T.10, s. 26 (7); 1994, c. 18, s. 8 (4); 2001, c. 23, s. 237 (4).

Use of remedy

27. The use of a remedy does not bar or affect any other remedy, and the remedies provided by this Act for the recovery and enforcement of payment or collection, or both, of any tax or penalty, or both, imposed by this Act are in addition to other remedies existing at law, and no action or other proceeding in any way prejudices, limits or affects any lien charge or priority under this Act or otherwise.  R.S.O. 1990, c. T.10, s. 27.

False statements

28. (1) Repealed:  1994, c. 18, s. 8 (15).

(2) Repealed:  1994, c. 18, s. 8 (15)

False statements

(3) Every person who has,

(a) made, or participated in, assented to or acquiesced in the making of, false or deceptive statements in a return, certificate, statement or answer, delivered or made as required by or under this Act or the regulations;

(b) to evade payment of a tax imposed by this Act, destroyed, altered, mutilated, secreted or otherwise disposed of the records or books of account of a collector, importer, exporter, interjurisdictional transporter, consumer, wholesaler, retail dealer or holder of a permit to mark or stamp cigarettes or to manufacture tear tape;

(c) made, or assented to or acquiesced in the making of, false or deceptive entries or omitted, or assented to or acquiesced in the omission, to enter a material particular in records or books of account of a collector, importer, exporter, interjurisdictional transporter, consumer, wholesaler, retail dealer or holder of a permit to mark or stamp cigarettes or to manufacture tear tape;

(d) wilfully, in any manner, evaded or attempted to evade compliance with this Act or payment of taxes imposed by this Act; or

(e) conspired with any person to commit any offence described in clauses (a) to (d),

is guilty of an offence and, in addition to any penalty otherwise provided by this Act, is liable on conviction to a fine of not less than $500 and not more than $10,000 plus not more than double the amount of the tax that should have been declared to be collectable or payable or that was sought to be evaded or to imprisonment for a term of not more than two years or to both.  R.S.O. 1990, c. T.10, s. 28 (3); 1993, c. 27, Sched.; 2001, c. 23, s. 238.

Prohibition re unmarked cigarettes

29. (1) No person shall, unless permitted under this Act or the regulations to do so,

(a) have in the person’s possession more than 200 unmarked cigarettes; or

(b) have in the person’s possession, purchase or receive any number of unmarked cigarettes for the purposes of sale.  2004, c. 7, s. 31 (1).

Seizure of unmarked cigarettes

(1.1) If a person authorized by the Minister has reasonable and probable grounds to believe that a person is in possession of unmarked cigarettes contrary to the provisions of clause (1) (b), the person may, subject to subsection (1.2), stop and detain the person and may seize, impound, hold and dispose of the unmarked cigarettes.  2004, c. 31, Sched. 36, s. 10 (1).

Application

(1.2) Unmarked cigarettes seized under subsection (1.1) are forfeited to Her Majesty to be disposed of as the Minister directs unless, within 30 days following the seizure, the person from whom the unmarked cigarettes were seized, or the owner of the unmarked cigarettes, applies to the Superior Court of Justice to establish a right to possession of the unmarked cigarettes.  2004, c. 31, Sched. 36, s. 10 (1).

Right to possession of unmarked cigarettes

(1.3) For the purposes of an application under subsection (1.2), the applicant has a right to possession of the unmarked cigarettes if, at the time the seizure was made,

(a) the applicant was a consumer with possession or control of not more than 200 unmarked cigarettes that were not for sale and were not kept or offered for sale; or

(b) the applicant was the holder of a valid permit issued under subsection 9 (1).  2004, c. 31, Sched. 36, s. 10 (1).

Disposal pending final determination by court

(1.4) If a final order under this section is not made within 60 days after the filing of the application under subsection (1.2), the Minister may dispose of the unmarked cigarettes and retain the proceeds, if any, pending the determination of the application.  2004, c. 31, Sched. 36, s. 10 (1).

Order

(1.5) If the court is satisfied on an application under subsection (1.2) that the applicant has a right to possession of the unmarked cigarettes, the court may order that the unmarked cigarettes be returned to the applicant or that the proceeds of sale of the unmarked cigarettes be paid to the applicant.  2004, c. 31, Sched. 36, s. 10 (1).

Forfeiture after dismissal of application

(1.6) On dismissal of an application under subsection (1.2) and the expiry of the appeal period provided therefor, the unmarked cigarettes are forfeited to Her Majesty to be disposed of as the Minister directs.  2004, c. 31, Sched. 36, s. 10 (1).

Proceeds of sale

(1.7) Where a sale of unmarked cigarettes is authorized under subsection (1.2) or (1.6), or where the proceeds of a sale are retained under subsection (1.4) and the application is dismissed, the proceeds of the sale remaining after payment of the costs incurred by the Minister in seizing, storing and disposing of the unmarked cigarettes shall be paid into the Consolidated Revenue Fund.  2004, c. 31, Sched. 36, s. 10 (1).

Offence

(2) Every person who contravenes subsection (1) is guilty of an offence and on conviction is liable to,

(a) a fine of not less $500 and not more than $10,000; and

(b) an additional fine of not less than three times the amount of tax that would be payable under section 2 had the cigarettes been sold to a consumer liable to pay tax under this Act.  2004, c. 7, s. 31 (2).

Imprisonment

(2.0.1) Where a person convicted of an offence under subsection (2) was found to be in possession of 10,000 or more unmarked cigarettes, the court may impose a term of imprisonment of not more than two years in addition to any fines levied under subsection (2).  2004, c. 7, s. 31 (3).

Forfeiture

(2.1) All unmarked cigarettes in respect of which a person has been convicted of an offence under subsection (2) shall be forfeited to Her Majesty to be disposed of in any manner determined by the Minister.  2004, c. 31, Sched. 36, s. 10 (2).

Penalty

(3) Every person who, except as permitted under this Act or the regulations, sells or offers for sale or keeps for sale in Ontario unmarked cigarettes shall pay a penalty, when assessed therefor, on all unmarked cigarettes so sold, offered for sale or kept for sale, equal to three times the amount of tax that would be payable under section 2 had the cigarettes been sold to a consumer liable to pay tax under this Act.  R.S.O. 1990, c. T.10, s. 29 (3); 1994, c. 18, s. 8 (17); 2004, c. 7, s. 31 (5).

Penalty

(4) Every person who, except as permitted under this Act or the regulations, has in the person’s possession more than 200 unmarked cigarettes or has in the person’s possession or has purchased or received any number of unmarked cigarettes for purposes of sale shall pay a penalty, when assessed therefor, equal to three times the amount of tax that would be payable under section 2 had the cigarettes been sold to a consumer liable to pay tax under this Act.  2004, c. 7, s. 31 (6).

Additional penalty

(5) Where the quantity of unmarked cigarettes is 10,000 or more, a person liable to a penalty under subsection (3) or (4) may be assessed an additional penalty equal to five times the amount of tax that would be payable under section 2 had the cigarettes been sold to a consumer liable to pay tax under this Act.  2004, c. 7, s. 31 (7).

(6) Repealed:  2004, c. 7, s. 31 (8).

Prohibition on possession of untaxed cigars and other tobacco

Definition

29.1 (1) In this section,

“other tobacco” means tobacco other than cigarettes and cigars.  2004, c. 31, Sched. 36, s. 11.

Possession of untaxed cigars and other tobacco

(2) No person shall, unless permitted to do so under this Act or the regulations, have in his or her possession more than 50 cigars or more than one kilogram of other tobacco for which the person cannot prove that the tax that would be payable under section 2 has been paid.  2004, c. 31, Sched. 36, s. 11.

Offence

(3) Every person who contravenes subsection (2) is guilty of an offence and on conviction is liable to,

(a) a fine of not less $500 and not more than $10,000; and

(b) an additional fine of not less than three times the amount of tax that would have been payable under section 2 if the cigars or other tobacco had been sold to a consumer liable to pay tax under this Act.  2004, c. 31, Sched. 36, s. 11.

Imprisonment

(4) Where a person convicted of an offence under subsection (3) is found to have been in possession of 200 or more cigars or 10 kilograms or more of other tobacco contrary to subsection (2), the court may impose a term of imprisonment of not more than two years in addition to any fines levied under subsection (3).  2004, c. 31, Sched. 36, s. 11.

Forfeiture

(5) All cigars and other tobacco in respect of which a person is convicted of an offence under this section shall be forfeited to Her Majesty to be disposed of in any manner determined by the Minister.  2004, c. 31, Sched. 36, s. 11.

Penalty, selling

(6) Every person who, except as permitted under this Act or the regulations, sells or offers or keeps for sale in Ontario cigars or other tobacco for which the person cannot prove that the tax that would be payable under section 2 has been paid shall pay a penalty, when assessed therefor, in respect of all the cigars and other tobacco sold or offered or kept for sale equal to three times the amount of tax that would have been payable under section 2 had the cigars or other tobacco been sold to a consumer liable to pay tax under this Act.  2004, c. 31, Sched. 36, s. 11.

Penalty, possession

(7) Every person who, except as permitted under this Act or the regulations,

(a) has in his or her possession more than 50 cigars or more than one kilogram of other tobacco for which the person cannot prove that the tax that would be payable under section 2 has been paid; or

(b) has in his or her possession for the purposes of sale or has received or purchased for the purposes of sale any amount of cigars or other tobacco for which the person cannot prove that the tax that would be payable under section 2 has been paid,

shall pay a penalty, when assessed therefor, equal to three times the amount of tax that would have been payable under section 2 had the cigars or other tobacco been sold to a consumer liable to pay tax under this Act.  2004, c. 31, Sched. 36, s. 11.

Additional penalty

(8) Where the amount of cigars referred to in subsection (6) or (7) is 200 or more or the amount of other tobacco referred to in subsection (6) or (7) is 10 kilograms or more, a person liable to a penalty under that subsection may be assessed an additional penalty equal to five times the amount of tax that would have been payable under section 2 had the cigars or other tobacco been sold to a consumer liable to pay tax under this Act.  2004, c. 31, Sched. 36, s. 11.

Liability of officers of corporations

30. Any officer, director or agent of a corporation who directed, authorized, assented to, acquiesced in or participated in the commission of any act that is an offence under this Act for which the corporation would be liable for prosecution is guilty of an offence and on conviction is liable to the punishment provided for the offence whether or not the corporation has been prosecuted or convicted.  R.S.O. 1990, c. T.10, s. 30.

Directors

30.1 (1) If a corporation has failed to collect tax or has collected tax and failed to remit the tax or has failed to pay any interest or penalty related thereto, the directors of the corporation at the time the corporation was required to collect or remit the taxes or to pay the interest or penalty related thereto are jointly and severally liable, together with the corporation, to pay such amounts.  1991, c. 48, s. 5.

Exception

(2) A director of a corporation is not liable under subsection (1) unless,

(a) a warrant of execution for the amount of the corporation’s liability as described in subsection (1) has been issued under clause 25 (1) (b) and the warrant has been returned by the sheriff unsatisfied in whole or in part;

(b) the corporation has become bankrupt due to an assignment or receiving order or it has filed a notice of intention to file or a proposal under the Bankruptcy and Insolvency Act (Canada), and a claim for the amount of the corporation’s liability referred to in subsection (1) has been proved within six months after the date of the assignment, receiving order or filing of the proposal; or

(c) the corporation becomes subject to a proceeding to which section 24.1 applies and a claim has been made under that section at any time from the date that the Minister should have been advised of the commencement of those proceedings to the date that is six months after the remaining property of the collector or registered importer has been finally disposed of.  1991, c. 48, s. 5; 1997, c. 43, Sched. E, s. 6.

Prudent director

(3) A director of a corporation is not liable for a failure described in subsection (1) if the director exercised the degree of care, diligence and skill to prevent the failure that a reasonably prudent person would exercise in comparable circumstances.  1991, c. 48, s. 5.

Assessment

(4) The Minister may assess any person for any amount payable by the person under this section and, where the Minister sends a notice of assessment, the sections of this Act respecting assessments, objections and appeals apply with necessary modifications.  1991, c. 48, s. 5.

Time limit

(5) An assessment under subsection (4) shall not be made more than two years after the person last ceased to be a director of the corporation.  1991, c. 48, s. 5.

Execution

(6) If execution referred to in clause (2) (a) has been issued, the amount recoverable from a director is the amount remaining unsatisfied after execution.  1991, c. 48, s. 5.

Idem

(7) If a director of a corporation pays an amount in respect of a corporation’s liability described in subsection (1) that is proved in liquidation, dissolution or bankruptcy proceedings, the director is entitled to any preference that Her Majesty in right of Ontario would be entitled to had the amount not been so paid and, where a warrant of execution has been issued under clause 25 (1) (b), the director is entitled to the assignment of the warrant of execution to the extent of the director’s payment, and the Minister may make the assignment.  1991, c. 48, s. 5.

Penalty for selling tobacco without a wholesaler’s permit

31. (1) Every person who sells tobacco in Ontario for resale without holding a subsisting wholesaler’s permit under section 3 shall, when assessed therefor, pay a penalty of not less than $1,000 and not more than $10,000 and an additional penalty calculated as follows:

1. For cigarettes sold by the person, an amount equal to three times the amount of tax that would be payable under section 2 had the cigarettes been sold to a consumer liable to pay tax under this Act.

2. For every gram of tobacco other than cigarettes or cigars sold by the person, an amount equal to three times the amount of tax that would be payable under section 2 had the tobacco been sold to a consumer liable to pay tax under this Act.

3. For every cigar sold by the person, 170 per cent of the price at which the cigar was sold.  2004, c. 7, s. 32 (1).

Offence

(2) Every person who sells tobacco in Ontario for resale without holding a wholesaler’s permit issued under this Act is guilty of an offence and on conviction is liable to the following penalty:

1. If the tobacco is unmarked cigarettes,

i. a fine of not less than the amount of tax that would be payable under section 2 had the cigarettes been sold to a consumer liable to pay tax under this Act and not more than three times that amount, or

ii. imprisonment for a term of not more than two years.

2. If the tobacco is marked cigarettes,

i. on a first conviction, a fine of $4 for each 200 cigarettes, and

ii. on each subsequent conviction, a fine of $4 for each 200 cigarettes, imprisonment for a term of not more than six months or both.

3. If the tobacco is tobacco other than unmarked or marked cigarettes,

i. on a first conviction, a fine of not less than $1,000 and not more than $50,000, and

ii. on each subsequent conviction, a fine of not less than $1,000 and not more than $50,000, imprisonment for a term of not more than six months or both.  2004, c. 7, s. 32 (2).

Forfeiture

(3) All tobacco in respect of which a person is convicted of an offence under subsection (2) shall be forfeited to Her Majesty to be disposed of in any manner determined by the Minister, to the extent that it has not been forfeited or disposed of under another provision of this Act.  2004, c. 31, Sched. 36, s. 12.

(4) Repealed:  2004, c. 31, Sched. 36, s. 12.

Communication of information

32. (1) Except as authorized by this section, no person employed by the Government of Ontario shall,

(a) knowingly communicate or allow to be communicated to any person any information obtained by or on behalf of the Minister for the purposes of this Act;

(b) knowingly allow any person to inspect or have access to any record or thing obtained by or on behalf of the Minister for the purposes of this Act.  R.S.O. 1990, c. T.10, s. 32 (1).

Officials not compellable as witnesses

(2) Despite any other Act, but subject to subsection (3), no person employed by the Government of Ontario shall be required, in connection with any legal proceeding,

(a) to give evidence relating to any information obtained by or on behalf of the Minister for the purposes of this Act; or

(b) to produce any record or thing obtained by or on behalf of the Minister for the purposes of this Act.  R.S.O. 1990, c. T.10, s. 32 (2).

Exceptions for legal proceeding

(3) Subsections (1) and (2) do not apply in respect of,

(a) a criminal proceeding under any Act of the Parliament of Canada;

(b) a proceeding in respect of the trial of any person for an offence under an Act of the Legislature; or

(c) a proceeding relating to the administration or enforcement of this Act or the collection of tax under this Act.  R.S.O. 1990, c. T.10, s. 32 (3).

Exception for internal administration

(4) A person employed by the Government of Ontario may, in the course of the person’s duties in connection with the administration and enforcement of this Act,

(a) communicate or allow to be communicated to any other person employed by the Government of Ontario in the administration and enforcement of any laws related to the raising of revenue or the registration of any person for provincial purposes any information obtained by or on behalf of the Minister under this Act; and

(b) allow any person employed in the administration and enforcement of any laws relating to the raising of revenues or the registration of any person for provincial purposes or any law enforcement official of the Government of Ontario, of Canada or of any other province or territory of Canada to inspect or have access to any record or thing obtained by or on behalf of the Minister under this Act,

if the information, record or thing obtained by the person that affects the administration and enforcement of this Act is communicated or furnished on a reciprocal basis to the Minister, and the information, record or thing will only be used for the administration or enforcement of this Act or an Act that is administered or enforced by the official or the person receiving the information, record or thing.  R.S.O. 1990, c. T.10, s. 32 (4).

Exception for objection and appeal

(5) Despite anything in this Act, the Minister may permit a copy of any record or thing obtained under this Act to be given to,

(a) the person from whom the record or thing was obtained; or

(b) any person,

(i) for the purpose of an objection or appeal taken by the person under this Act in connection with which the record was obtained, or

(ii) by whom any amount payable under this Act is payable or has been paid; or

(c) the legal representative of any person referred to in clause (a) or (b) or the agent of the legal representative authorized in writing.  R.S.O. 1990, c. T.10, s. 32 (5).

Exception for tax enforcement in other jurisdictions

(6) The Minister may communicate or allow to be communicated any information, record or thing obtained under this Act or allow inspection of or access to any written statement furnished under this Act to any person employed by any government, provided that the information, record or thing and the written statements obtained by such government for the purposes of any Act that imposes a tax are communicated or furnished on a reciprocal basis to the Minister, and if the information, record or thing and the written statements will not be used for any purpose other than the administration or enforcement of a tax law.  R.S.O. 1990, c. T.10, s. 32 (6).

(7) Repealed:  1994, c. 18, s. 8 (19).

Offence

(8) Every person who contravenes any provision of this section is guilty of an offence and on conviction is liable to a fine of not more than $2,000.  R.S.O. 1990, c. T.10, s. 32 (8).

Disclosure of names and addresses

32.1 (1) The Minister shall disclose the names and addresses of the following persons for purposes related to the administration of this Act and may impose conditions and restrictions with respect to the disclosure:

1. Each person who holds a wholesaler’s permit under this Act.

2. Each person who is designated under subsection 4 (1) or (1.3) to collect tax.

3. Each importer or exporter who holds a registration certificate under subsection 5 (1).

4. Each interjurisdictional transporter who holds a registration certificate under subsection 6 (1).

5. Each manufacturer who holds a registration certificate under subsection 7 (1).

6. Each tear tape manufacturer who holds a permit under subsection 7.1 (1).

7. Each person who holds a permit referred to in subsection 8 (2) to mark cigarettes.

8. Each person who holds a permit referred to in subsection 8 (3) to stamp cigarettes.

9. Each person who holds a permit referred to in subsection 9 (1) to purchase and sell unmarked cigarettes.  2004, c. 31, Sched. 36, s. 13.

Exception

(2) Despite subsection (1), the Minister shall not disclose a person’s name or address if, in the Minister’s opinion, the disclosure is not necessary for the purposes of this Act.  2004, c. 31, Sched. 36, s. 13.

No indicia outside Ontario

33. (1) No person shall affix an Ontario tax indicium to a package of cigarettes or to the tear tape of a package of cigarettes or to a carton, case or container of any description for tobacco for sale to a consumer outside Ontario.  R.S.O. 1990, c. T.10, s. 33 (1); 2001, c. 23, s. 239.

Offence

(2) Every person who contravenes subsection (1) is guilty of an offence and on conviction is liable to a fine of not less than $1,000 and not more than $500,000.  R.S.O. 1990, c. T.10, s. 33 (2).

Offence

34. (1) Every person who affixes to a package of cigarettes or the tear tape of a package of cigarettes a false, forged, fraudulent, spurious or counterfeit indicium or an indicium that has been used before, or who prints on a package, carton, case or container of any description for packaging cigarettes a false, forged, fraudulent, spurious or counterfeit indicium is guilty of an offence and on conviction is liable to a fine of not less than $500 and not more than $100,000 or to imprisonment for a term of not more than two years, or to both.  R.S.O. 1990, c. T.10, s. 34 (1); 2001, c. 23, s. 240.

Penalty

(2) Every holder of a permit to mark or stamp cigarettes and every dealer who possesses cigarettes in a package, carton or case that has previously been used as a marked package, carton or case under this Act or the regulations or has been fraudulently marked shall pay as a penalty,

(a) on a first assessment, an amount equal to three times the amount of tax that would be payable under section 2 had the cigarettes been sold to a consumer liable to pay tax under this Act; and

(b) on each subsequent assessment, an amount equal to five times the amount of tax that would be payable under section 2 had the cigarettes been sold to a consumer liable to pay tax under this Act.  2004, c. 7, s. 33.

Prohibition, tear tape

34.1 (1) No person shall sell, distribute, deliver or have in the person’s possession tear tape for use in Ontario unless permitted under this Act or the regulations to do so.  2001, c. 23, s. 241.

Same, marking

(2) No person shall sell, distribute, deliver or have in the person’s possession tear tape that is not marked in accordance with this Act or the regulations or with the requirements of another jurisdiction.  2001, c. 23, s. 241.

Penalty

(3) Every person who fails to comply with subsection (1) or (2) shall pay a penalty, when assessed for it, equal to the tax that would be payable under section 2, had the subject tear tape been manufactured in accordance with the Act or regulations, affixed to packages of cigarettes and sold to a consumer liable to pay tax under this Act.  2001, c. 23, s. 241.

Offence

(4) Every person who contravenes subsection (1) or (2) is guilty of an offence and on conviction is liable to a fine of not less than $1,000 and not more than $10,000, or to a term of imprisonment of not more than two years, or to both.  2001, c. 23, s. 241.

General penalty

35. (1) Every person who contravenes a provision of the Act or regulations for which no other penalty is provided is guilty of an offence and on conviction is liable to a fine of not less than $1,000 and not more than $25,000.  1998, c. 34, s. 110.

Offence

(2) Every person who purchases or receives tobacco for resale from a person who does not hold a wholesaler’s permit under section 3 is guilty of an offence and on conviction is liable to the following:

1. If the tobacco is unmarked cigarettes,

i. a fine of not less than the amount of tax that would be payable under section 2 had the cigarettes been sold to a consumer liable to pay tax under this Act and not more than three times that amount, or

ii. imprisonment for a term of not more than two years.

2. If the tobacco is marked cigarettes,

i. on a first conviction, a fine of $4 for each 200 cigarettes, and

ii. on each subsequent conviction, a fine of $4 for each 200 cigarettes, imprisonment for a term of not more than six months or both.

3. If the tobacco is tobacco other than unmarked or marked cigarettes,

i. on a first conviction, a fine of not less than $1,000 and not more than $50,000, and

ii. on each subsequent conviction, a fine of not less than $1,000 and not more than $50,000, imprisonment for a term of not more than six months or both.  2004, c. 7, s. 34 (1).

Offence

(2.0.1) Every person who delivers, stores, transports or possesses tobacco in bulk in Ontario that was acquired from or that is owned by a person who does not hold a registration certificate issued under subsection 5 (1) or 7 (1) or a permit issued under subsection 3 (1), 8 (2) or 9 (1) is guilty of an offence and is liable on conviction to the following:

1. If the tobacco is unmarked cigarettes,

i. a fine of not less than the amount of tax that would be payable under section 2 had the cigarettes been sold to a consumer liable to pay tax under this Act and not more than three times that amount, or

ii. imprisonment for a term of not more than two years.

2. If the tobacco is marked cigarettes,

i. on a first conviction, a fine of $4 for each 200 cigarettes, and

ii. on each subsequent conviction, a fine of $4 for each 200 cigarettes, imprisonment for a term of not more than six months or both.

3. If the tobacco is tobacco other than unmarked or marked cigarettes,

i. on a first conviction, a fine of not less than $1,000 and not more than $50,000, and

ii. on each subsequent conviction, a fine of not less than $1,000 and not more than $50,000, imprisonment for a term of not more than six months or both.  2004, c. 7, s. 34 (2).

Forfeiture

(2.1) All tobacco in respect of which a person is convicted of an offence under subsection (2) shall be forfeited to Her Majesty to be disposed of in any manner determined by the Minister, to the extent that it has not been forfeited or disposed of under another provision of this Act.  2004, c. 31, Sched. 36, s. 14 (1).

(2.2) Repealed:  2004, c. 31, Sched. 36, s. 14 (2).

Idem

(3) Every person who contravenes section 23 is guilty of an offence and on conviction is liable to a fine of $50 for each day during which the default continues.  R.S.O. 1990, c. T.10, s. 35 (3).

Penalty

(4) Every person who purchases tobacco for resale from a person who does not hold a wholesaler’s permit issued under section 3 and every person who stores, delivers, transports or possesses tobacco that was acquired from or is owned by a person who does not hold a wholesaler’s permit shall, when assessed therefor, pay a penalty of not less than $500 and not more than $10,000 and an additional penalty calculated as follows:

1. If the tobacco is cigarettes, an amount equal to three times the amount of tax that would be payable under section 2 had the cigarettes been sold to a consumer liable to pay tax under this Act.

2. If the tobacco is not cigarettes or cigars, an amount equal to three times the amount of tax that would be payable under section 2 had the tobacco had been sold to a consumer liable to pay tax under this Act.

3. If the tobacco is cigars, for every cigar purchased by the person, 170 per cent of the price at which the cigar was purchased.  2004, c. 7, s. 34 (4).

Information to be laid within six years

36. Any information with respect to any contravention of this Act or the regulations may be laid within six years from the time when the matter of such information arose, and not afterwards.  R.S.O. 1990, c. T.10, s. 36.

Order for production

Definitions

36.1 (1) In this section,

“document” means a record, including a record prepared or stored in an electronic format, respecting the manufacture, purchase, sale, transportation, storage, distribution, delivery, consignment or possession of a tobacco product, and includes a ledger, account, invoice, receipt, voucher, banking record, bill of lading, memorandum, correspondence and e-mail message; (“document”)

“justice” means a justice under the Provincial Offences Act; (“juge”)

“person” means an individual, corporation, partnership, syndicate, trust or other business entity whether incorporated or not. (“personne”)  2004, c. 31, Sched. 36, s. 15.

Application for order

(2) A provincial offences officer who is investigating a contravention of this Act or the regulations may make an application to a justice without notice for an order requiring any person, other than a person who is a subject of the investigation, to produce for inspection a document that is relevant to the investigation.  2004, c. 31, Sched. 36, s. 15.

Information included in an application

(3) An application under subsection (2) shall include information in writing under oath that there are reasonable grounds to believe that,

(a) an offence under this Act has been committed;

(b) the document or documents described in the application may afford evidence of the commission of the offence; and

(c) the person who is the subject of the application has possession or control of the document or documents described in the application.  2004, c. 31, Sched. 36, s. 15.

Order

(4) A justice who is satisfied that the requirements of subsection (3) have been met may issue an order requiring the person to produce for inspection the document or documents within such reasonable time as is stipulated in the order.  2004, c. 31, Sched. 36, s. 15.

Terms and conditions

(5) A justice may include in an order such terms and conditions as the justice considers necessary in the circumstances and, without restricting the generality of the foregoing, may include terms and conditions,

(a) to protect a communication between a solicitor and a client that may be privileged;

(b) to prohibit access to information relating to the order or to documents produced by the person to whom the order is directed;

(c) relating to the service of, or compliance with, the order.  2004, c. 31, Sched. 36, s. 15.

Self-incrimination

(6) No person is excused from complying with an order made under this section on the grounds that a document required to be produced under the order may tend to incriminate them or subject them to any proceeding or penalty.  2004, c. 31, Sched. 36, s. 15.

Service on unincorporated person

(7) An order under this section that is directed to an unincorporated person shall be served by a provincial offences officer by delivering it personally to the person, if the person is an individual, or to an owner, partner, representative or agent of the unincorporated person, in any other case.  2004, c. 31, Sched. 36, s. 15.

Service on incorporated person

(8) An order under this section that is directed to a person that is a corporation shall be served by a provincial offences officer by delivering it personally to an officer, director, manager or agent of the corporation, or to an individual apparently in charge of premises in Ontario that are occupied or controlled by the corporation.  2004, c. 31, Sched. 36, s. 15.

Service outside Ontario

(9) An order under this section may be served outside Ontario by sending it by registered mail to the person to whom it is directed.  2004, c. 31, Sched. 36, s. 15.

Document in electronic format

(10) If a document described in an order issued under this section was prepared or is stored or maintained in an electronic format, the person to whom the order is directed or upon whom it is served shall, on request, provide the officer serving the order with a paper printout or other legible copy of the document.  2004, c. 31, Sched. 36, s. 15.

Photocopies

(11) The person to whom an order issued under this section is directed or the person upon whom it is served shall, on request, permit the officer who serves the order to prepare a photocopy of any document described in the order and the officer who serves the order may certify the photocopy as a true copy of the original document.  2004, c. 31, Sched. 36, s. 15.

Report to the justice

(12) An officer who serves an order issued under this section shall, within 14 days following the expiry of the period specified for compliance with the order, file a report with the justice who issued the order or, if the justice who issued the order is unavailable, with the Regional Senior Justice of the Peace for the region in which the order was served, containing particulars of the date and manner of service and the subsequent compliance or non-compliance with the order by the person to whom the order is directed.  2004, c. 31, Sched. 36, s. 15.

Application for exemption

(13) The person to whom an order under this section is directed may, before the date specified for compliance with the order, apply in writing to the justice who issued the order or, if the justice who issued the order is unavailable, to the Regional Senior Justice of the Peace for the region in which the order was served, for an exemption from the requirement to produce a document described in the order.  2004, c. 31, Sched. 36, s. 15.

Material filed with Regional Senior Justice

(14) If a report under subsection (12) or an application under subsection (13) is filed with a Regional Senior Justice of the Peace instead of with the justice who issued the order, the Regional Senior Justice of the Peace may assign the matter to another justice in the region in which the order was served for such further action as may be necessary in the circumstances.  2004, c. 31, Sched. 36, s. 15.

Notice by applicant

(15) The person to whom an order is directed shall give written notice to the officer who served the order or to the Minister of his or her intention to make an application under subsection (13) and shall give the notice not less than 10 days before the date specified for compliance with the order.  2004, c. 31, Sched. 36, s. 15.

Suspension of duty to comply

(16) If an application is made under subsection (13), the duty to comply with an order is suspended with respect to a document specified in the application until a justice makes a determination in respect of the application.  2004, c. 31, Sched. 36, s. 15.

Exemption

(17) A justice may exempt an applicant from complying with an order issued under this section if he or she is satisfied that,

(a) production of a document specified in the order would disclose information that is privileged or otherwise protected by law from disclosure;

(b) it is unreasonable to require the applicant to produce the document; or

(c) the document is not in the possession or control of the applicant.  2004, c. 31, Sched. 36, s. 15.

May impose conditions if not exempt

(18) If a justice determines that an applicant is not exempt from complying with an order or a portion of it, the justice may impose such conditions for compliance on the applicant as he or she considers necessary and appropriate in the circumstances.  2004, c. 31, Sched. 36, s. 15.

Offence

(19) Every person who fails to comply with an order issued under this section is guilty of an offence and is liable on conviction to a fine of not less than $200 for each day during which the failure to comply continues.  2004, c. 31, Sched. 36, s. 15.

Authorization to use investigative technique, procedure or test

36.2 (1) A person authorized by the Minister may include in an application for a search warrant under section 158 of the Provincial Offences Act a request for authorization to use any investigative technique, procedure or test described in the warrant to obtain evidence of a contravention of this Act or the regulations.  2004, c. 31, Sched. 36, s. 15.

Same

(2) A justice considering a request under subsection (1) may issue a warrant authorizing the use of an investigative technique, procedure or test if the justice is satisfied on information under oath that there are reasonable grounds to believe that evidence relating to the commission of an offence under this Act or the regulations will be obtained through the use of the investigative technique, procedure or test.  2004, c. 31, Sched. 36, s. 15.

Interjurisdictional settlement of competing tax claims

37. (1) For the purpose of simplifying compliance with this Act and the administration and collection of the tax imposed by this Act, and in order to provide for reciprocal arrangements to settle competing claims for tax on the acquisition and use of tobacco by persons carrying on business in more than one jurisdiction, the Minister may enter into an agreement, on such terms and conditions as are considered necessary and expedient, with another jurisdiction providing that tax paid to one jurisdiction on the acquisition there of tobacco that is transferred to the other jurisdiction and that becomes liable to tax in the other jurisdiction under this Act or any similar legislation in force in the other jurisdiction may be paid by one jurisdiction to the other in reduction of the liability to the tax arising in the jurisdiction receiving the payment and in lieu of refunding the tax to the person who paid it and who became liable for the similar tax in the other jurisdiction.  2004, c. 31, Sched. 36, s. 16.

Payment for services

(2) An agreement entered into under subsection (1) may authorize payments to the other jurisdiction for services provided under the agreement and may authorize the other jurisdiction to deduct the amount of the payments from amounts payable to the Minister under the agreement.  2004, c. 31, Sched. 36, s. 16.

Overpayments

38. (1) Where a person has remitted to the Minister a greater amount of money for a period than was required by this Act to be remitted for that period, or a greater amount than was payable by the person, the Minister shall either refund the overpayment or, at the option of the Minister, apply the amount of the overpayment to liability of the person with respect to a previous or subsequent period, in which latter case the Minister shall notify the person of such action.  R.S.O. 1990, c. T.10, s. 38 (1); 1994, c. 18, s. 8 (4).

Limitation

(2) No refund under subsection (1) shall be made unless an application for the refund is made to the Minister within four years from the date of payment of the amount a refund of which is sought, and unless evidence satisfactory to the Minister is furnished to establish the entitlement of the applicant to the refund claimed.  R.S.O. 1990, c. T.10, s. 38 (2); 1997, c. 43, Sched. E, s. 7.

Saving

(3) Where, as the result of an assessment or reassessment or the final decision of a court in a proceeding commenced under section 22, the person assessed or reassessed or the appellant, as the case may be, has overpaid the tax, interest or penalty payable under this Act, the amount of such overpayment shall be refunded or applied to liability of such person in accordance with subsection (1) despite the limitation contained in subsection (2).  R.S.O. 1990, c. T.10, s. 38 (3).

Overpayments

(4) Where an amount in respect of an overpayment is refunded or applied on other liability, interest at such rate as is prescribed by the regulations, computed and compounded daily, shall be paid or applied thereon for the period commencing on the day the overpayment arose and ending with the day of refunding or application on other liability, unless the amount of interest so calculated is less than $5 in which event no interest need be paid or applied under this subsection.  R.S.O. 1990, c. T.10, s. 38 (4); 1996, c. 29, s. 33.

Idem

(5) Where by a decision of the Minister under section 21 or by a decision of the court it is finally determined that the tax payable under this Act by a person is less than the amount assessed by the assessment to which objection was made or from which the appeal was taken and the decision makes it appear that there has been an overpayment of tax, the interest payable under subsection (4) on the overpayment shall be computed at the rate prescribed by the regulations.  R.S.O. 1990, c. T.10, s. 38 (5).

Application to other liabilities

(6) Instead of making a refund under this Act or the regulations, if any person is liable or is about to become liable to make a payment under this Act or under any other Act administered by the Minister that imposes a tax or is prescribed by the regulations, the Minister may apply the amount of the overpayment to the liability and, in that case, the Minister shall notify the person that the action has been taken.  1994, c. 18, s. 8 (20).

Note:  Subsection 38 (6) applies to applications for refunds made after June 23, 1994, whether the right to the refund arose before or after June 23, 1994.  See:  1994, c. 18, s. 8 (28).

Refund to dealer where tax reduced

38.1 (1) Despite section 38, if a dealer who is not a collector designated under subsection 4 (1) has, as a result of a reduction in the tax payable by a consumer under section 2, remitted to the Minister an amount of money for a period that is greater than this Act requires the dealer to remit, the dealer shall apply to the dealer’s collector for a refund of the amount overpaid, or to the Minister, if the Minister so requires.  2000, c. 42, s. 114.

Application by dealer

(2) If the application for a refund is made after the end of the month that is four months after subsection 2 (1.5) comes into force, it shall be made to the Minister and not to the dealer’s collector.  2000, c. 42, s. 114.

Application by designated collector

(3) If the dealer referred to in subsection (1) is a collector designated under subsection 4 (1.3), the dealer shall apply to the Minister for any refund owing.  2000, c. 42, s. 114.

Limitation

(4) No refund shall be made unless the dealer makes an application for the refund under this section by the end of the month that is 12 months after subsection 2 (1.5) comes into force.  2000, c. 42, s. 114.

Same

(5) Upon proof satisfactory to the collector designated under subsection 4 (1) or (1.3) or satisfactory to the Minister that the amount was overpaid, the collector or the Minister may refund the overpayment to the dealer or, at the collector’s or Minister’s option, apply the amount of the overpayment to the liability of the dealer with respect to a previous or subsequent period.  2000, c. 42, s. 114.

Insufficient records

(6) For the purposes of a refund under subsection (1), if the dealer cannot substantiate the refund claim because of insufficient records, the Minister may estimate the amount of the refund in the manner the Minister considers expedient and refund the amount to the dealer.  2000, c. 42, s. 114.

Collector as agent

(7) A collector shall be deemed to act as the agent of the Minister in making a refund under subsection (1).  2000, c. 42, s. 114.

Recovery of refunds

(8) If a collector refunds an overpayment to a dealer or applies an overpayment to a liability of a dealer under subsection (5), the collector shall retain the amount refunded or applied from the amount for which the collector is liable to pay under this Act for the period, until the expiry of the period described in subsection (9).  2000, c. 42, s. 114.

Same

(9) The period referred to in subsection (8) begins on the day on which the collector’s return is due under this Act for the month following the month that subsection 2 (1.5) comes into force and ends on the day on which the collector’s return is due in the month that is five months after subsection 2 (1.5) comes into force.  2000, c. 42, s. 114.

Compensation to collectors

(10) If a collector refunds an overpayment to a dealer or applies the overpayment to a liability of the dealer under subsection (5), there may be paid to the collector in compensation for the collector’s services the amount of $5 for each overpayment provided and the collector may deduct that compensation from the tax otherwise to be remitted to the Minister.  2000, c. 42, s. 114.

Refund to collector where tax reduced

38.2 (1) Where a collector has, as a result of the reduction of the tax payable by a consumer under section 2, remitted to the Minister a greater amount of money than is required by this Act to be remitted, the Minister shall refund the overpayment or, at the option of the Minister, apply the amount of the overpayment to the liability of the collector with respect to a previous or subsequent period, in which latter case the Minister shall notify the person of such action.  1994, c. 18, s. 8 (21).

Exception

(2) The amount of any overpayment under subsection (1) shall not include any amounts refunded or applied by the collector under subsection 38.1 (2).  1994, c. 18, s. 8 (21).

Limitation

(3) Despite subsection 38 (2), no refund under subsection (1) shall be made unless,

(a) an application for a refund is made to the Minister as part of the next return required to be filed by the collector following the day subsection 2 (1.5) comes into force;

(b) evidence satisfactory to the Minister is furnished to establish the entitlement of the collector to the refund claimed.  1994, c. 18, s. 8 (21); 2000, c. 42, s. 115.

No interest payable

(4) Despite subsection 38 (4), no interest shall be paid in respect of any overpayment refunded or applied to other liability under subsection (1) or 38.1 (2).  1994, c. 18, s. 8 (21).

Refund on exports of tobacco

39. (1) Where a person exports tobacco from Ontario, the Minister may refund to the person any amount paid on account of tax in respect of the tobacco if,

(a) the person holds a registration certificate issued under subsection 5 (1) as an exporter;

(b) the tobacco was exported for the purpose of sale; and

(c) the application for the refund is supported by,

(i) invoices verifying the purchase of the tobacco and the payment of the amounts on account of the tax,

(ii) documentary evidence acceptable to the Minister that the tobacco exported from Ontario was delivered to a purchaser in another jurisdiction, and

(iii) a certification by the jurisdiction into which the tobacco was delivered for consumption that tax was paid to that jurisdiction on the tobacco exported from Ontario or that the consumers of the tobacco were not liable to pay tax on the tobacco purchased by them.  R.S.O. 1990, c. T.10, s. 39 (1).

Exception

(1.1) The documents referred to in clause (1) (c) are not required to accompany an application for a refund for a particular calendar year if the total of all refunds sought by the applicant for the calendar year is not more than $500.  2001, c. 23, s. 242.

Same

(1.2) The applicant for a refund is required to keep the documents referred to in subsection (1.1) for seven years after the date of the application and is required to give them to the Minister upon request.  2001, c. 23, s. 242.

Limitation

(2) A refund under this section shall not be made unless an application therefor is received by the Minister within four years of the date when the amount on account of the tax, a refund of which is sought, was paid and it is established to the satisfaction of the Minister that the applicant is entitled to the refund claimed.  R.S.O. 1990, c. T.10, s. 39 (2); 1997, c. 43, Sched. E, s. 8.

Penalty

(3) Where an applicant for a refund under this Act has misrepresented a material fact on or in connection with an application for a refund, a return where an amount was retained by the applicant under subsection 18 (3) or in an invoice supporting the application or return, the Minister may,

(a) deny all or any part of the refund; and

(b) impose a penalty, upon assessment therefor, of an amount equal to or less than the amount of the refund denied.  R.S.O. 1990, c. T.10, s. 39 (3).

Offence

39.1 Every person who, by deceit, falsehood, or by any fraudulent means, obtains or attempts to obtain a refund under this Act or the regulations to which the person is not entitled is guilty of an offence and on conviction is liable to a fine of not less than $500 and not more than $10,000, to which may be added a fine of not more than double the amount of the refund the person obtained or sought to obtain, or to imprisonment for a term of not more than two years, or to both.  1994, c. 18, s. 8 (22).

Excess refunds

40. Any amount refunded under this Act in excess of the amount to which the person receiving the refund was entitled shall be deemed to be tax owing to Her Majesty in right of Ontario, and the sections of this Act relating to the assessment (including objection and appeal therefrom) and collection of taxes apply with necessary modifications to the said amount.  R.S.O. 1990, c. T.10, s. 40; 1994, c. 18, s. 8 (23).

Regulations

41. (1) The Lieutenant Governor in Council may make regulations,

(a) providing for the collection of the tax imposed by this Act;

(b) providing for compensation to be paid to dealers out of tax collected by them in cases where a dealer is required to complete an inventory under subsection 23 (7), and prescribing the conditions under which such compensation will be paid;

(c) requiring security to be furnished by the persons who collect the tax imposed by this Act and prescribing the form and amount of the security to be furnished;

(d) providing for the accounting for and paying over of the tax imposed by this Act, and regulating the time and manner of such accounting and payment;

(e) defining any words in the Act that have not already been defined in the Act;

(f) prescribing words or marks or both as indicia and the means by which they shall be included on or as part of the packaging of cigarettes, cigars or other tobacco intended to be sold in Ontario, indicating that the cigarettes, cigars or other tobacco are taxable or exempt from tax under this Act, as the case may be, and prescribing the location of the indicia on or as part of the packaging;

(g) governing the activities of those who are required or permitted to hold permits or registration certificates under this Act;

(h) respecting agreements between the Minister and the persons who collect the tax imposed by this Act, and providing for their use;

(i) prescribing the rate of interest payable on amounts payable to or to be remitted to the Minister under this Act or a formula for computing that rate, and the method of calculating that interest;

(j) excluding any class of tobacco products from this Act;

(k) exempting any class of persons from the payment of the tax imposed by this Act;

(l) governing the acquisition, transportation, storage, possession and sale of marked and unmarked tobacco by dealers;

(m) providing for the appointment of such inspectors, officers and other persons as may be necessary for the proper carrying out of this Act;

(n) Repealed:  1994, c. 18, s. 8 (24).

(o) prescribing any matter required by this Act to be prescribed or referred to in this Act as prescribed;

(p) providing a system for the sale of unmarked cigarettes, cigars and other tobacco to classes of persons who are exempt from the payment of the tax imposed by this Act, including the limitation on the quantity of unmarked cigarettes, cigars and other tobacco to be sold to retail dealers for resale to such consumers;

(q) providing for the furnishing to the Minister of information related to the sale or delivery of tobacco products that are exempt from the tax imposed by this Act or that are delivered to classes of persons who are exempt from the payment of the tax imposed by this Act;

(r) authorizing any person to collect tax or security for the tax imposed by this Act and regulating the time and manner of such collection.  R.S.O. 1990, c. T.10, s. 41 (1); 1994, c. 18, s. 8 (4, 24, 25); 2001, c. 23, s. 243 (1).

Minister may make regulations

(2) The Minister may make regulations,

(a) establishing one or more categories of cigars for the purposes of paragraph 4 of subsection 2 (1.7) and prescribing the percentage applicable to each category of cigar for the purposes of that paragraph;

(a.1) prescribing records to be kept and information to be included on invoices for the purposes of sections 2.1 and 22.1;

(a.2) prescribing alternative methods of calculating the taxable price per cigar on the sale of cigars to consumers if the wholesaler and the retail dealer of the cigars are not dealing at arm’s length;

(a.3) prescribing one or more methods for calculating unverifiable losses and excess unverifiable losses, for the purposes of subsection 19 (3.4), and prescribing one or more thresholds for the purposes of that subsection;

(b) prescribing, defining, designating or determining anything that the Minister is permitted or required by this Act to prescribe, define, designate or determine;

(c) prescribing the responsibilities of holders of permits to mark or stamp cigarettes and holders of permits to manufacture tear tape for the receipt, use of and the accounting for indicia and tear tape;

(d) providing for the refund of the whole or any part of the tax paid under this Act, and prescribing the records and material to be furnished upon any application for a refund.  R.S.O. 1990, c. T.10, s. 41 (2); 1997, c. 19, s. 25 (4); 2000, c. 42, s. 116; 2001, c. 23, s. 243 (2, 3).

Regulations

(3) A regulation is, if it so provides, effective with reference to a period before it was filed.  R.S.O. 1990, c. T.10, s. 41 (3).

Forms

42. The Minister may approve the use of forms for any purpose of this Act and the forms may provide for such information to be furnished as the Minister may require.  1997, c. 19, s. 25 (5).

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