Skip to main content

Bill C-13

If you have any questions or comments regarding the accessibility of this publication, please contact us at



Her Excellency the Governor General recommends to the House of Commons the appropriation of public revenue under the circumstances, in the manner and for the purposes set out in a measure entitled ``An Act to amend the Excise Tax Act''.


This enactment mainly implements measures relating to the Goods and Services Tax and Harmonized Sales Tax (GST/HST), including sales tax initiatives proposed in the February 28, 2000 Budget. These measures are aimed principally at improving the operation and fairness of the GST/HST in the affected areas and ensuring that the legislation accords with the policy intent.

This enactment also implements two amendments to the excise tax provisions of the Act. The first is made for greater certainty to clarify the deferral of the existing excise taxes on air conditioners installed in automobiles, and on new heavy automobiles, at the time of importation by a licensed manufacturer or sale to a licensed manufacturer. The second amendment provides discretionary power to the Minister of National Revenue to waive or cancel interest, or penalties calculated in the same manner as interest, under the excise tax system, consistent with the discretion already provided to the Minister in relation to the sales tax and income tax systems.

The principal GST/HST measures included in this enactment are as follows:

(1) Export Distribution Centre and Export Trading House Programs: implements new rules that ensure that the GST/HST does not present an impediment to the establishment of North American distribution centres in Canada by permitting export-oriented non-manufacturing businesses to purchase or import inventory, certain inputs and customers' goods on a tax-free basis, rather than having to pay the tax and later claim a refund; parallels certain administrative aspects of the new export distribution centre rules in the existing Export Trading House program to ensure consistency between these two measures.

(2) Non-residents and Cross-border Transactions: ensures that no tax is payable on the importation of defective goods imported solely to be replaced under warranty, at no additional cost, by other goods that are subsequently exported; ensures that businesses in Canada can import, on a tax-free basis, non-resident customers' goods solely for storage or distribution in Canada and subsequent export without incurring cash-flow costs due to the tax; ensures that there is no tax on the service of storing goods for a non-resident business in certain circumstances in which the business is relieved from paying tax on the goods themselves and would otherwise be unable to recover the tax; removes an unnecessary condition on the tax-free treatment of sales of exported railway rolling stock to a non-resident business that would otherwise be unable to recover the tax.

(3) Real Property: implements the New Residential Rental Property Rebate, which is a partial rebate of GST paid in respect of newly constructed or substantially renovated long-term residential rental accommodation; permits a new home used primarily as a place of residence of the owner and also to provide short-term accommodation to the public (e.g., a Bed-and-Breakfast establishment) to qualify for the New Housing Rebate; allows a person who purchased real property and paid tax to recover that tax if the property is returned to the original vendor within one year and pursuant to the original contract; ensures that real property cannot be sold exempt from tax if the seller was previously leasing it to other persons on a taxable basis and was therefore entitled to recover any tax paid on the purchase of the property or improvements to it; clarifies that charities are not required to charge tax on the rental of real property or on any goods rented in conjunction with the real property.

(4) Health: continues in force an existing GST/HST exemption for speech therapy services that are billed by individual practitioners and not covered by the applicable provincial health care plan. The amendment extends the exemption to provide time for the profession to complete a process now under way of becoming regulated in a fifth province.

(5) Education: ensures that similar vocational training across the country is provided the same exempt treatment regardless of how vocational schools are regulated in each province; exempts from tax vocational training supplied by a government entity or agency; allows suppliers of vocational training to elect to treat that training as taxable where it is provided to registrants that are able to recover the tax by way of input tax credits.

(6) Electronic Filing: removes the requirement to apply to the Minister of National Revenue for permission to file GST/HST returns electronically (e.g., over the telephone or the Internet) and therefore allows anyone to do so provided they meet the criteria set out by the Minister.

(7) Miscellaneous Amendments: corrects ambiguities in existing provisions consistent with current industry practice, administrative interpretation and the underlying policy intent.