Bill C-282: An Act to amend the Excise Tax Act and the Income Tax Act (extra-energy-efficient products)

Excise Tax Act Income Tax Act First Session, Forty-second Parliament, 64-65 Elizabeth II, 2015-2016 HOUSE OF COMMONS OF CANADA BILL C-282 An Act to amend the Excise Tax Act and the Income Tax Act (extra-energy-efficient products) FIRST READING, JUNE 3, 2016 Mr. Davies 421028 SUMMARY This enactment promotes greater energy efficiency among Canadian households and businesses by removing the Excise Tax Act requirement for consumers to pay the goods and services tax and harmonized sales tax on the purchase of eligible energy-efficient products and by providing a tax credit under the Income Tax Act for the purchase of those products. Available on the Parliament of Canada Web Site at the following address: http://www.parl.gc.ca 1st Session, 42nd Parliament, 64-65 Elizabeth II, 2015-2016 HOUSE OF COMMONS OF CANADA BILL C-282 An Act to amend the Excise Tax Act and the Income Tax Act (extra-energy-efficient products) Preamble Whereas Canada supports the need to be proactive in reducing energy consumption by encouraging Canadians to use products that have greater energy efficiency; And whereas Canada recognizes the benefits to be gained for all by encouraging a shift towards the use of consumer products that significantly exceed established energy performance standards; Now, therefore, Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows: R.‍S.‍, c. E-15 Excise Tax Act 1 Subsection 123(1) of the Excise Tax Act is amended by adding the following in alphabetical order: extra-energy-efficient product means a product that is designated in regulations made under section 125.‍1; (produit super-écoénergétique) 2 The Act is amended by adding the following after section 125: Regulations 125.‍1 (1) For the purposes of this Part in relation to Part XI of Schedule VI, the Governor in Council, on the recommendation of the Minister of Natural Resources and the Minister of National Revenue, may make regulations designating certain products or classes of products as extra-energy-efficient products, subject to the following conditions: (a) the product or class of products must exceed, by at least 10%, the energy performance standard that applies to it under the Energy Efficiency Regulations; (b) the product or class of products must not occupy more than 50% of the domestic market share for that product or class of products; and (c) consideration must be given to harmonizing, if possible, the basis for the designation with criteria used in other jurisdictions or by other organizations for recognizing products or classes of products that are exemplary in regard to their energy efficiency. Review of regulations (2) Regulations made under subsection (1) must be reviewed regularly, at least once every five years, to ensure that the “extra-energy-efficient” designation reflects technological development and responds to changes in the consumer market and to encourage the use of products that are exemplary in regard to their energy efficiency. 3 Schedule VI to the Act is amended by adding the following after Part X: PART XI Extra-energy-efficient Products 1 A supply of the following major appliances that are extra-energy-efficient products: (a) refrigerators; (b) freezers; (c) dishwashers; (d) clothes washers; (e) clothes dryers; (f) chillers; and (g) dehumidifiers. 2 A supply of the following heating and cooling equipment that are extra-energy-efficient products: (a) gas or oil-fired furnaces; (b) gas or oil-fired boilers; (c) ground-source heat pumps; (d) large air-conditioners; and (e) room air-conditioners and ceiling fans. 3 A supply of the following lighting products that are extra-energy-efficient products: (a) general service fluorescent lamps; (b) general service incandescent reflector lamps; (c) BR lamps; (d) ER lamps; (e) general service lamps; and (f) compact fluorescent lamps. 4 A supply of the following commercial products that are extra-energy-efficient products: (a) large condensing units; (b) large heat pumps; (c) self-contained commercial freezers; (d) self-contained commercial refrigerator-freezers; (e) self-contained commercial refrigerators; (f) refrigerated beverage vending machines; and (g) snack and refrigerated beverage vending machines. R.‍S.‍, c. 1 (5th Supp.‍) Income Tax Act 4 The Income Tax Act is amended by adding the following after section 118.‍07: Definition of extra-energy-efficient product 118.‍08 (1) In this section, extra-energy-efficient product means a product that falls within any of the following categories and that is designated as an extra-energy-efficient product in regulations made under subsection (4): (a) refrigerators; (b) freezers; (c) dishwashers; (d) clothes washers; (e) clothes dryers; (f) chillers; (g) dehumidifiers; (h) gas or oil-fired furnaces; (i) gas or oil-fired boilers; (j) ground-source heat pumps; (k) large air-conditioners; and (l) room air-conditioners and ceiling fans. Extra-energy-efficient product tax credit (2) For the purpose of computing the tax payable under this Part by an individual for a taxation year, there may be deducted the amount, up to a maximum of $1000 for the individual in that year, determined by the formula A × B where A is 10%; and B is the total of all amounts paid by the individual in the taxation year towards the purchase of extra-energy-efficient products. Apportionment of credit (3) If more than one individual is entitled to a deduction under this section for a taxation year in respect of an extra-energy-efficient product, the total of all amounts so deductible shall not exceed the maximum amount that would be so deductible for the year by any one of those individuals for that extra-energy-efficient product if that individual were the only individual entitled to deduct an amount for the year under this section, and, if the individuals cannot agree as to what portion of the amount each can so deduct, the Minister may fix the portions. Regulations (4) The Governor in Council, on the recommendation of the Minister of Natural Resources and the Minister of National Revenue, may make regulations designating certain products or classes of products as extra-energy-efficient products, subject to the following conditions: (a) the product or class of products must exceed, by at least 10%, the energy performance standard that applies to it under the Energy Efficiency Regulations; (b) the product or class of products must not occupy more than 50% of the domestic market share for that product or class of products; and (c) consideration must be given to harmonizing, if possible, the basis for the designation with criteria used in other jurisdictions or by other organizations for recognizing products or classes of products that are exemplary in regard to their energy efficiency. Review of regulations (5) Regulations made under subsection (1) must be reviewed regularly, at least once every five years, to ensure that the “extra-energy-efficient” designation reflects technological development and responds to changes in the consumer market and to encourage the use of products that are exemplary in regard to their energy efficiency. Published under authority of the Speaker of the House of Commons