Exemption Certificates

Introduction

This guide will assist collectors, self-generating users, Indian Bands, band councils and international organizations with the completion, issuance and acceptance of Exemption Certificates. See Guide 108 Status Indians, Indian Bands and Band Councils and Guide 109 Foreign Representatives and Officials for more details. This guide replaces Guide 104 published in April 2002.

Use of Exemption Certificates

Persons entitled to purchase or acquire electricity exempt of the Debt Retirement Charge (DRC) are required to provide their supplier with a properly completed Exemption Certificate.

Exemption Certificates remain in effect until:

• they are withdrawn or revoked in writing by the person who issued the certificate or
• a collector is advised in writing by the Ministry of Finance that the certificate has been cancelled.

Who May Issue an Exemption Certificate

An Exemption Certificate [PDF - 228 KB] may be issued to a collector by:

• collectors who purchase or acquire electricity for resale;
• Indian Bands and band councils purchasing electricity to be consumed on a reserve; and
• foreign states and international organizations that are exempt from tax under the Retail Sales Tax Act.

Self-generating users may issue an Exemption Certificate to the Independent Electricity Market Operator (IMO) if the self-generating user:

• is entitled to an annual exemption
• does not generate electricity primarily for sale to another user
• is a registered market participant with facilities comprising both a registered generation facility(s) and a registered load facility(s), as defined by the Market Rules.

Who is not Required to issue an Exemption Certificate

Retailers are not required to issue an exemption certificate:

• to a distributor where the distributor is required to collect DRC by way of distributor-consolidated or split billing; or
• to the IMO where the IMO is required to collect DRC under a physical allocation agreement.

The IMO will collect DRC from retailers on electricity allocated to a retailer under a physical allocation agreement. Retailers will recover the DRC paid to the IMO from their customers, however, they are not to identify the recovered amount as DRC on the invoice to their customer.

Exemption Certificate Contents

A properly completed exemption certificate must include the:

• name and address of the person issuing the certificate
• DRC registration number, if applicable
• reason the exemption is being claimed by either checking the appropriate box or providing an explanation for the exemption
• effective date of the certificate and the date the certificate is issued
• name and signature of the individual issuing the certificate or an individual duly authorized to sign on behalf of the person issuing the certificate
• signed statement certifying that the contents of the certificate are complete and accurate, and
• list of the delivery points, under the Market Rules, for which the exemption certificate applies, if the certificate is issued to the IMO.

Supplies of Exemption Certificate forms are not provided by the Ministry of Finance. You may use photocopies or reproductions of the Exemption Certificate form [PDF - 228 KB].

Collector's Responsibilities

Every collector is required to levy and collect the DRC unless they are provided with a properly completed Exemption Certificate or sell to Status Indians or certain individuals in the diplomatic community who may be entitled to an exemption from DRC. See Guide 108 Status Indians, Indian Bands and Band Councils and Guide 109 Foreign Representatives and Officials for more details.

All Exemption Certificates provided by customers must be kept on file to support transactions where no DRC was collected. Do not destroy Exemption Certificates unless you receive written permission from the Ministry of Finance.

Penalty

If you misuse or make false statements on an Exemption Certificate, you can, upon conviction, be fined not less than $1,000 and an amount up to twice the DRC owed, or imprisoned for up to two years, or both.

Additional Information

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

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