Penalties, Fines and Interest

Introduction

To ensure fairness and encourage compliance and administrative efficiency, Part V.1 of the Electricity Act, 1998 (Act) and the Regulations make provisions for the application of penalties, fines and interest for failure to comply with the Act.

Penalties are monetary amounts prescribed by legislation and may be imposed in the absence of court proceedings. Fines and imprisonment are imposed by the courts. The maximum fine and term of imprisonment that may be imposed is specified in the Act.

This guide explains the penalties, fines, interest and other sanctions associated with:

• non-collection of the Debt Retirement Charge (DRC)
• failure to file a return or late-filing a return
• failure to remit or pay the DRC
• failure to register
• evading or attempting to evade payments of DRC
• making false statements and omissions
• obtaining false refunds or rebates
• destroying or mutilating records
• causing a meter to inaccurately measure or ceasing to measure consumption
• failure to keep records, meter consumption or allow inspection, and
• general offences.

Ministry Imposed Penalties

Non-collection of DRC

The penalty for failing to collect the DRC as required is equal to the DRC that should have been collected.

Where a penalty for failing to collect the DRC as required has been assessed and the failure to collect the DRC is due to neglect, carelessness, wilful default, or fraud, an additional penalty of 25% (minimum $25) of the DRC not collected may also be assessed.

Unfiled or Late-filed Returns

The penalty for failing to file a DRC return or filing a return late is:

• 10% of the DRC collectable (from line 4 of the return), plus;
• 5% of the DRC payable on own use (from line 5 of the return), plus;
• 5% of the DRC payable on the consumption of self-generated electricity (from line 6 of the return), with no maximum.

If the non-filing or late-filing of a DRC return is due to neglect, carelessness, wilful default or fraud, an additional penalty of 25% (minimum $100) of the unpaid amount may be assessed.

Returns must be filed even where there is no activity or DRC to report. If a person does not receive a return, the Ministry of Finance still requires that the person provide the return information, with payment, by the regular due date.

Non-remittance of DRC

The penalty for failing to remit the total DRC owing with a return is:

• 10% of the DRC collectable and not remitted, plus;
• 5% of the DRC payable on own use and not remitted, plus;
• 5% of the DRC payable on the consumption of self-generated electricity and not remitted, with no maximum.

If the underpayment of the DRC is due to neglect, carelessness, wilful default or fraud, an additional penalty of 25% (minimum $100) of the unpaid amount may be assessed.

Non-Negotiable Cheques

In addition to the penalties for failing to remit the DRC noted above (Non- Remittance of DRC) a fee of $35 will be charged for every cheque that is returned by a financial institution as non-negotiable.

Failure to Pay DRC

Where a person has been assessed or reassessed by the Ministry for failure to pay the DRC, and the non-compliance was due to neglect, carelessness, wilful default or fraud, a penalty of 25% (minimum $100) of the DRC assessed or reassessed may also be assessed.

Directors' Liability

Directors of a corporation may be held jointly and severally liable for the DRC owing if the corporation fails to collect the DRC, collects the DRC but fails to remit it, or fails to pay any interest or penalty relating to the DRC.

Court Imposed Fines

In addition to the civil penalties described above, the Ministry may lay charges for making false statements, evading or attempting to evade payment of the DRC, attempting to obtain a refund by fraud, or failing to carry out any duty required by Part V.1 of the Act and Regulations. Court proceedings are commenced under the Provincial Offences Act. Upon conviction, substantial fines, or imprisonment, or both may be imposed as described below:

Failure to Register

The fine for failing to register with the DRC program is $100 or more for each day the person operates without registering.

Non-collection of DRC

The fine for failing to collect the DRC as required is equal to the DRC that should have been collected, plus a minimum of $50 up to a maximum of $2000.

Unfiled or Late-filed Returns

The fine for failing to file a return on or before the due date shown on the return is $100 or more for each day the return is late. Returns must be filed by the due date, even if there is no activity or DRC to report.

Failure to Remit DRC Collected *

The fine for failing to remit any of the DRC collected is a minimum of $100 or 25% of the amount not remitted, whichever is more, up to a maximum of double the amount not remitted.

Evading Payment of DRC, Destroying Records, Making False Statements, etc. *

The fine for:

• making, participating in, acquiescing in or assenting to the making of a false or deceptive statement in a return, record, book of account, certificate, statement or answer
• destroying, altering, mutilating, hiding or otherwise disposing of information or records
• failing to make, assenting to or acquiescing in the omission of an entry in a record
• destroying, altering or otherwise causing a meter to inaccurately measure or cease to measure consumption of electricity or replacing a meter with another meter which is calculated to mislead
• wilfully evading or attempting to evade payment of the DRC,

is a minimum of $1,000 or 50% of the DRC which should have been remitted or was sought to be evaded up to a maximum of double the DRC not remitted or sought to be evaded.

False Refunds or Rebates *

The fine for obtaining or attempting to obtain a refund or rebate of the DRC by deceit, falsehood or fraud is a minimum of $500 to a maximum of double the amount of the refund or rebate.

* The Act provides for jail terms of up to two years for serious offences. A jail term can be imposed in addition to, or instead of, a fine.

Failure to Keep Records

The fine for failing to keep proper records is a minimum of $50 up to a maximum of $5000.

Failure to Meter Consumption

The fine for failing to meter consumption of electricity is $100 or more for each day the electricity remains unmetered.

Failure to Meter Consumption

The fine for preventing, interfering with, or attempting to prevent or interfere with, an inspector is a minimum of $100 for each day during which the offence occurs.

General Offences

Upon conviction, the fine for contravening any section of the Act and Regulations, where no other penalty is provided for the offence, is a minimum of $50 up to a maximum of $5000.

Interest Charges

Interest will be charged on any penalties from the first day of the default to which it relates and on the unpaid DRC from the date on which it is due.

All interest charges are compounded daily and will accumulate to the date the account is settled.

Additional Information

The 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