As announced in the 2014 Ontario Budget, the Ontario tax rate on aviation fuel is increasing by one cent per litre each year for four years, beginning in 2014. The first one cent per litre increase came into effect on September 1, 2014. The second and third one cent per litre increases came into effect on April 1 of 2015 and 2016 of each respective year. A subsequent rate increase of one cent per litre will be effective on April 1, 2017.
This overview provides general information on Ontario's gasoline tax rules; it should not be considered as a substitute for the Gasoline Tax Act and Regulations.
The Ontario Ministry of Finance is responsible for administering the Gasoline Tax Act (the Act).
Generally, Ontario imposes a direct tax on gasoline products, which is payable by consumers. This means that persons who purchase or receive delivery of gasoline products for their consumption (or for someone else at their expense) must pay the gasoline tax.
Gasoline products include:
The tax rates are:
|September 1, 2014 to March 31, 2015||3.7¢ per litre|
|April 1, 2015 to March 31, 2016||4.7¢ per litre|
|April 1, 2016 to March 31, 2017||5.7¢ per litre|
|Beginning April 1, 2017||6.7¢ per litre|
Since 2004, a portion of the gasoline tax is given to municipalities for public transit.
The Ontario Ministry of Energy monitors gasoline prices across Ontario and provides data on these prices.
The federal government, through the Competition Bureau, ensures fair competition in gasoline markets.
All consumers of gasoline products in Ontario must pay gasoline tax, no matter how they plan to use the products, except:
Gasoline tax is collected by ministry designated collectors at the wholesale level and is included on the invoice to the retailer. The retailer, in turn, recovers the tax amount when the sale is made to the consumer. Gasoline tax is included in the price you pay at the pump and, unlike the HST, does not appear as a separate line item on your receipt.
Under some conditions, businesses can ask for a refund of gasoline tax.
If you are a retailer who buys propane in bulk, tax included, you can apply for a refund on sales of propane dispensed into cylinders and other unlicensed equipment.
Read on: Ontario Gasoline Tax Refund Program (four year time limit applies)
You need to register with the province if you intend to conduct business as a:
For more information on interjurisdictional transporters, please refer to Ontario tax bulletin FT/GT 2‑2003 – Requirements for Interjurisdictional Transporters.
Before issuing permits, registrations or designations, the Minister of Finance (minister) may impose reasonable conditions, limitations and restrictions on those permits, registrations or designations.
As an exception, importers who are not registered must, upon entry into Ontario from outside Canada, pay to the minister an amount equal to the tax. This amount is payable by certified cheque, bank draft, or money order, at the time of entry. The Canada Border Services Agency (CBSA) collects this amount for Ontario at border entry points.
To help identify persons authorized by the minister to sell and distribute gasoline products, the ministry maintains a list of persons registered under the Act. Anyone can subscribe to email alerts to stay informed of changes to registrant status (e.g., authorized, suspended and cancelled registrations). View the registrant list.
If you operate a qualified motor vehicle travelling into or out of Ontario, you may register under the IFTA to obtain an IFTA licence and decals to display on your vehicle.
If the vehicle is not licensed under IFTA and considered to be a qualified vehicle, then a one‑time permit must be purchased from each province or state in which you intend to travel.
To inquire about registering under the Act:
Before the minister issues you a permit, registration certificate or a designation, you may need to provide security through a surety bond or letter of credit.
In most cases, the amount of security required is an amount equal to three months' average tax collectable and payable or $1 million, whichever is greater.
Acceptable forms of security include:
Following are links to approved forms:
A new legal entity, which results from the reorganization of an existing collector or registrant, or any entity that undergoes a substantial change in ownership or control, must apply to the ministry for a new designation or registration certificate and must provide new or revised security to reflect the new designation.
To maintain gasoline tax accountability, the ministry requires registrants to file monthly gasoline tax returns. Fines and penalties may apply if returns and payments are not received by the due date, are incomplete or tax is not remitted in full.
Once you register with the Ministry of Finance, the ministry will forward a personalized return each month. You must complete this return, even if you did not have any activity during the reporting period.
Please call the Ministry of Finance at 1-866-ONT‑TAXS (1-866-668‑8297).
You can file your return:
If you use ONT‑TAXS online, you can elect to stop receiving paper returns by clicking the Change in Issuing Returns link.
Gasoline retailers are not required to complete returns, however, they must keep, at their principal place of business, records and books of account for all gasoline purchases and sales for seven years.
Designated collector, registered importers and registered exporters need to send their completed return, along with any gasoline tax collectable and payable, to the ministry by the 21st day of the month following the month of the sale, import or export, as applicable.
Effective January 1, 1999, Ontario implemented an accelerated remittance program for large gasoline tax collectors (i.e., those who remitted tax of more than $36 million in the previous calendar year).
Large gasoline tax collectors need to:
Registered manufacturers need to send their completed return by the 21st day of the second month following the reporting period. Manufacturers who complete a combined fuel and gasoline manufacturer return can send it to the ministry by the 25th day of the second month following the reporting period without being penalized.
Registered propane dealers need to remit to the ministry the tax collectable on sales of automotive propane and send their completed return by the 21st day of the month following the month of the sale.
Interjurisdictional Transporters need to send their completed return to the ministry by the 21st day of the month following the month in which the gasoline, aviation fuel or propane was transported.
First Nations bands and individuals who qualify as an Indian or band under the federal Indian Act are exempt from paying gasoline tax if they buy gasoline on a reserve for their exclusive use from an authorized on‑reserve gasoline retailer.