Excise Tax Act

This Act may be cited as the Excise Tax Act.

The following definitions apply in this section, Parts I to VIII (other than section 121) and Schedules I to IV:

accredited representative[Repealed, 2002, c. 22, s. 366]

Agency means the Canada Revenue Agency continued by subsection 4(1) of the Canada Revenue Agency Act; (Agence)

Atlantic manufactured tobacco[Repealed, 2001, c. 16, s. 16]

bank means a bank or an authorized foreign bank within the meaning of section 2 of the Bank Act; (banque)

black stock[Repealed, 2002, c. 22, s. 413]

black stock cigarettes[Repealed, 2002, c. 22, s. 413]

black stock manufactured tobacco[Repealed, 2001, c. 16, s. 16]

cigar[Repealed, 2002, c. 22, s. 366]

cigarette[Repealed, 2002, c. 22, s. 366]

Commissioner means the Commissioner of Revenue appointed under section 25 of the Canada Revenue Agency Act; (commissaire)

cosmetics means goods, whether possessing therapeutic or prophylactic properties or not, commonly or commercially known as toilet articles, preparations or cosmetics, that are intended for use or application for toilet purposes, or for use in connection with the care of the human body, including the hair, nails, eyes, teeth, or any other part or parts thereof, whether for cleansing, deodorizing, beautifying, preserving or restoring, and includes toilet soaps, shaving soaps and shaving creams, skin creams and lotions, shampoos, mouth washes, oral rinses, toothpastes, tooth powders, denture creams and adhesives, antiseptics, bleaches, depilatories, perfumes, scents and similar preparations; (cosmétiques)

diesel fuel includes any fuel oil that is suitable for use in internal combustion engines of the compression-ignition type, other than any such fuel oil that is intended for use and is actually used as heating oil; (combustible diesel)

document includes money, a security and a record; (document)

duty free shop has the meaning assigned by subsection 2(1) of the Customs Act; (boutique hors taxes)

foreign duty free shop means a retail store that is located in a country other than Canada and that is authorized under the laws of that country to sell goods free of certain duties and taxes to individuals who are about to leave that country; (boutique hors taxes à l’étranger)

foreign ships’ stores means tobacco products taken on board a vessel or aircraft while the vessel or aircraft is outside Canada and that are intended for consumption by or sale to the passengers or crew while the passengers and crew are on board the vessel or aircraft; (provisions de bord à l’étranger)

gasoline means gasoline type fuels for use in internal combustion engines other than aircraft engines; (essence)

health goods means any material, substance, mixture, compound or preparation, of whatever composition or in whatever form, sold or represented for use in the diagnosis, treatment, mitigation or prevention of a disease, a disorder, an abnormal physical state or the symptoms thereof in human beings or animals or for use in restoring, correcting or modifying organic functions in human beings or animals; (marchandises relatives à la santé)

heating oil means any fuel oil that is consumed exclusively for providing heat to a home, building or similar structure and that is not consumed for generating heat in an industrial process, including any commercial process that involves removing moisture from a good; (huile à chauffage)

Indian[Repealed, 2002, c. 22, s. 413]

licensed tobacco manufacturer[Repealed, 2001, c. 16, s. 16]

listed international agreement means

the Convention on Mutual Administrative Assistance in Tax Matters, concluded at Strasbourg on January 25, 1988, as amended from time to time by a protocol, or other international instrument, as ratified by Canada, or

a comprehensive tax information exchange agreement that Canada has entered into and that has effect, in respect of another country or jurisdiction; (accord international désigné)

manufactured tobacco[Repealed, 2002, c. 22, s. 366]

manufacturer or producer includes

the assignee, trustee in bankruptcy, liquidator, executor, liquidator of a succession or curator of any manufacturer or producer and, generally, any person who continues the business of a manufacturer or producer or disposes of his assets in any fiduciary capacity, including a bank exercising any powers conferred upon it by the Bank Act and a trustee for bondholders,

any person, firm or corporation that owns, holds, claims or uses any patent, proprietary, sales or other right to goods being manufactured, whether by them, in their name or for or on their behalf by others, whether that person, firm or corporation sells, distributes, consigns or otherwise disposes of the goods or not,

any department of the government of Canada or any province, any board, commission, railway, public utility, manufactory, company or agency owned, controlled or operated by the government of Canada or any province, or under the authority of the legislature or the lieutenant governor in council of any province, that manufactures or produces taxable goods,

any person who sells, otherwise than in a retail store exclusively and directly to consumers, cosmetics that were not manufactured by him in Canada, other than a person who sells those cosmetics exclusively and directly to hairstylists, cosmeticians and other similar users for use in the provision of personal grooming services and not for resale,

[Repealed, R.S., 1985, c. 12 (4th Supp.), s. 1]

any person who, by himself or through another person acting for him, prepares goods for sale by assembling, blending, mixing, cutting to size, diluting, bottling, packaging or repackaging the goods or by applying coatings or finishes to the goods, other than a person who so prepares goods in a retail store for sale in that store exclusively and directly to consumers,

any person who imports into Canada new motor vehicles designed for highway use, or chassis therefor,

any person who sells, otherwise than predominantly to consumers, new motor vehicles designed for highway use, or chassis therefor,

any person who sells goods enumerated in Schedule III.1, other than a person who sells those goods exclusively and directly to consumers, and

any person who sells or leases prerecorded video cassettes that are new or have not been used in Canada, other than a person who sells or leases such goods exclusively and directly to consumers other than to consumers who lease such goods to other persons; (fabricant ou producteur)

Minister means the Minister of National Revenue; (ministre)

mobile home means a trailer unit not less than three metres wide by eight metres long, equipped with complete plumbing, electrical and heating facilities and designed to be towed on its own chassis to a building site for installation on a foundation and connection to service facilities at that site and to be used for residential, commercial, educational, institutional or industrial purposes, but does not include any free-standing appliances or furniture sold with the unit or any travel trailer, motor home, camping trailer or other vehicle or trailer for recreational use; (maison mobile)

modular building unit means a building component or unit, the manufacture and assembly of which is completed or substantially completed before delivery to a construction site, that is designed for installation on a foundation and is composed of at least one room or area with finished walls, a finished floor and a finished ceiling, including installed plumbing, heating and electrical equipment appropriate to that room or area, and that, when installed on a foundation at the site, with or without other similarly manufactured and assembled components or units, forms a complete residential, commercial, educational, institutional or industrial building, but does not include any freestanding appliances or furniture sold with the unit; (bâtiment modulaire)

municipality means

an incorporated city, town, village, metropolitan authority, township, district, county or rural municipality or other incorporated municipal body however designated, or

such other local authority as the Minister may determine to be a municipality for the purposes of this Act; (municipalité)

operator of a duty free shop means the person operating the duty free shop who is licensed as a wholesaler under Part VI and is deemed by subsection 55(2) to be a bona fide wholesaler or jobber; (exploitant)

person means an individual, partnership, corporation, trust, estate, or a body that is a society, union, club, association, commission or other organization of any kind whatever; (personne)

prescribed means

in the case of a form, the information to be given on a form or the manner of filing a form, prescribed by the Minister, and

in any other case, prescribed by regulation or determined in accordance with rules prescribed by regulation; (prescrit)

record includes an account, an agreement, a book, a chart or table, a diagram, a form, an image, an invoice, a letter, a map, a memorandum, a plan, a return, a statement, a telegram, a voucher, and any other thing containing information, whether in writing or in any other form; (registre)

stamp or excise stamp means a stamp prepared for the purposes of this Act pursuant to a direction of the Minister under section 60; (timbre ou timbre d’accise)

telecommunication[Repealed, 1993, c. 38, s. 86]

this Act means this Act except Part IX and Schedules V to X. (présente loi)

tobacco stick[Repealed, 2002, c. 22, s. 366]

For the purposes of this Act, the expression “Her Majesty in right of a province” includes the governments of Yukon, the Northwest Territories and Nunavut and the expression “legislature of any province” includes the Legislative Assembly of Yukon, the Northwest Territories or Nunavut.

For the purposes of this Act,

related persons shall be deemed not to deal with each other at arm’s length; and

it is a question of fact whether persons not related to each other were, at any particular time, dealing with each other at arm’s length.

For the purposes of this Act, persons are related to each other if they are related persons within the meaning of subsections 251(2) to (6) of the Income Tax Act, except that

references in those subsections to “corporation” shall be read as references to “corporation or partnership”; and

references in those subsections to “shares” or “shareholders” shall, in respect of a partnership, be read as references to “rights” or “partners”, respectively.

For the purposes of this Act, a particular corporation is associated with another corporation if, by reason of subsections 256(1) to (6) of the Income Tax Act, the particular corporation is associated with the other corporation for the purposes of that Act.

For the purposes of this Act, a person other than a corporation is associated with a particular corporation if the particular corporation is controlled by the person or by a group of persons of which the person is a member and each of whom is associated with each of the others.

For the purposes of this Act, a person is associated with

a partnership if the total of the shares of the profits of the partnership to which the person and all other persons who are associated with the person are entitled is more than half of the total profits of the partnership, or would be more than half of the total profits of the partnership if it had profits; and

a trust if the total of the values of the interests in the trust of the person and all other persons who are associated with the person is more than half of the total value of all interests in the trust.

For the purposes of this Act, a person is associated with another person if each of them is associated with the same third person.

For the purposes of this Act, a person who is a manufacturer or producer within the meaning of paragraph (d), (i) or (j) of the definition of that term in subsection (1), other than a member of a class of small manufacturer or producer that is exempted by regulations made under subsection 54(2) from the requirement of subsection 54(1) to apply for a licence, and who imports into Canada shall be deemed to be the manufacturer or producer in Canada thereof and not the importer thereof and the goods shall be deemed to be goods produced or manufactured in Canada and not imported goods.

cosmetics,

[Repealed, R.S., 1985, c. 12 (4th Supp.), s. 1]

goods enumerated in Schedule III.1, or

prerecorded video cassettes that are new or have not been used in Canada

For the purposes of this Act, goods imported into Canada by a person who is a manufacturer or producer within the meaning of paragraph (f) of the definition of that term in subsection (1), other than a member of a class of small manufacturer or producer that is exempted by virtue of regulations made under subsection 54(2) from the requirement of subsection 54(1) to apply for a licence, that are prepared, as described in that paragraph, by or on behalf of that person in Canada for sale shall be deemed to be goods produced or manufactured in Canada and not imported goods.

For the purposes of this Act, a person who is a manufacturer or producer within the meaning of paragraph (g) of the definition of that term in subsection (1), other than a member of a class of small manufacturer or producer that is exempted by virtue of regulations made under subsection 54(2) from the requirement of subsection 54(1) to apply for a licence, and who imports new motor vehicles designed for highway use, or chassis therefor, into Canada shall be deemed to be the manufacturer or producer in Canada thereof and not the importer thereof and the vehicles or chassis shall be deemed to be goods produced or manufactured in Canada and not imported goods.

For the purposes of this Act, new motor vehicles designed for highway use, and chassis therefor, imported into Canada that are sold by a person who is a manufacturer or producer within the meaning of paragraph (h) of the definition of that term in subsection (1), other than a member of a class of small manufacturer or producer that is exempted by virtue of regulations made under subsection 54(2) from the requirement of subsection 54(1) to apply for a licence, shall be deemed to be goods produced or manufactured in Canada and not imported goods.

For the purposes of this Act, a licensed wholesaler who gives away without charge, as free samples, replacement goods or parts or otherwise, goods on which taxes have not been paid under this Act is deemed to have retained the goods for his own use, unless

he gives them away as free replacement goods or parts under a written warranty of the manufacturer of the goods to be replaced or of the goods into which the parts are to be incorporated; and

the amount, if any, charged for the warranty is included in the sale price charged by the manufacturer for the goods to be replaced or the goods into which the parts are to be incorporated or, if those goods are imported goods, in the duty paid value thereof.

For the purposes of this Act, a determination under paragraph (b) of the definition municipality in subsection (1) shall, if it so provides, be retroactive and be deemed to have come into force on a day prior to the day on which it is made, which prior day shall not be more than four years before the day on which the determination is made.

Any reference in a regulation or order made before 1991 under an Act of Parliament to a refund, remission or other relief from or in respect of a tax, duty, excise or levy under shall, except where the regulation or order otherwise expressly provides, be deemed not to include a reference to a refund, remission or other relief from the tax imposed under Part IX.

the Excise Tax Act,

the laws relating to customs or customs duties, or

the laws relating to excise or duties of excise

[Repealed, 2001, c. 16, s. 16]

In this Part,

exchange means a group of persons formed for the purpose of exchanging reciprocal contracts of indemnity or inter-insurance with each other through the same attorney; (Bourse)

insurer means any corporation incorporated for the purpose of carrying on the business of insurance, any association of persons formed on the plan known as Lloyds whereby each associate underwriter becomes liable for a stated, limited or proportionate part of the whole amount insured under a contract of insurance, and any exchange; (assureur)

net premiums means the gross premiums paid or payable under a contract of insurance, less dividends received or receivable in respect of the contract and less premiums returned on cancellation of the contract. (primes nettes)

Superintendent[Repealed, 1999, c. 17, s. 146]

Every person resident in Canada by whom or on whose behalf a contract of insurance, other than a contract of reinsurance, is entered into or renewed against a risk ordinarily within Canada at the time the contract is entered into or renewed, shall, on or before April 30 in each year, pay to the Minister, in addition to any other tax payable under any other law, a tax of ten per cent on the net premiums paid or payable during the immediately preceding calendar year in respect of that insurance.

with that at the time the contract is entered into or renewed is not authorized under the laws of Canada or of any province to transact the business of insurance, or

any insurer not incorporated under the laws of Canada or of any province or not formed in Canada, or

any exchange having its chief place of business outside Canada or having a principal attorney-in-fact whose chief place of business is outside Canada,

with any insurer that at the time the contract is entered into or renewed is authorized under the laws of Canada or of any province to transact the business of insurance, if the contract is entered into or renewed through a broker or agent outside Canada,

Subsection (1) does not apply to

any contract of life insurance, personal accident insurance, sickness insurance or insurance against marine risks, or any contract of insurance against nuclear risks to the extent that the insurance against nuclear risks is not, in the opinion of the Commissioner, available within Canada; or

any other contract of insurance entered into after February 19, 1973 to the extent that the insurance is not, in the opinion of the Commissioner, available within Canada.

For the purposes of this section, every corporation carrying on business in Canada shall be deemed to be a person resident in Canada.

Where a contract of insurance is entered into or renewed through more than one broker or agent, or where payment of the premium or any part of the premium thereon is effected through more than one broker or agent, the contract shall, for the purposes of this Part, be deemed to have been entered into or renewed, as the case may be, through the broker or agent directly retained or instructed by the insured and not through any other broker or agent.

Every person to whom section 4 applies shall, on or before April 30 in each year, make a return in writing to the Minister stating, with respect to each contract of insurance entered into or renewed by him or on his behalf during the immediately preceding calendar year and on which the net premiums are taxable under section 4,

the name of the insurer;

the amount of the insurance;

the net premiums paid or payable during the immediately preceding calendar year; and

if the contract was entered into or renewed as described in paragraph 4(1)(b), the name and address of the broker or agent outside Canada through whom the contract was entered into or renewed.

Every person who, acting as a broker or agent, obtains, effects or places or assists in obtaining, effecting or placing any contract of insurance entered into or renewed as described in paragraph 4(1)(a), and on which the net premiums are taxable under section 4, shall, on or before March 15 in each year, make a return in writing to the Minister stating, with respect to each contract so entered into or renewed during the immediately preceding calendar year, the name and address of the person resident in Canada by whom or on whose behalf the contract was entered into or renewed and the net premiums paid or payable during that year.

Every insurer that enters into or renews a contract of insurance as described in paragraph 4(1)(b), and on which the net premiums are taxable under section 4, shall, on or before March 15 in each year, make a return in writing to the Minister stating, with respect to each contract so entered into or renewed during the immediately preceding calendar year,

the name and address of each person resident in Canada with whom or on whose behalf the contract was entered into or renewed;

the net premiums paid or payable during the immediately preceding calendar year; and

the name and address of the broker or agent outside Canada through whom the contract was entered into or renewed.

The Commissioner or any officer or employee of the Agency appointed by the Commissioner may visit the office of any insurer, broker or agent and examine their books and records for the purpose of verifying any return required by this Part, and the Commissioner and that officer or employee have a right of access to those books and records at all reasonable hours.

In this section, month means a period beginning on a particular day in a calendar month and ending on

the day immediately before the day in the next calendar month that has the same calendar number as the particular day; or

if the next calendar month does not have a day that has the same calendar number as the particular day, the last day of that next calendar month.

Every person who fails to file a return for a period as and when required under subsection 5(1) shall pay a penalty equal to the sum of

an amount equal to 1% of the amount of tax unpaid at the expiration of the time for filing the return, and

the amount obtained when one quarter of the amount determined under paragraph (a) is multiplied by the number of complete months, not exceeding 12, from the day on which the return was required to be filed to the day on which the return is filed.

Every person who refuses or neglects to make a return as required by subsection 5(2) or (3) is liable to a penalty of ten dollars for each day of default or fifty dollars, whichever is the lesser.

In this Part,

air carrier means a person who provides transportation of a person by air; (transporteur aérien)

certified air carrier means

an air carrier who is authorized by the Canadian Transportation Agency under Part II of the Canada Transportation Act to operate a domestic service or an international service, and

an air carrier, other than an air carrier described in paragraph (a), who, personally or by agent, sells in Canada transportation of a person by air that is to be provided in whole or in part by an air carrier described in paragraph (a); (transporteur aérien titulaire de certificat)

emplanement does not include an emplanement resulting from a landing of an aircraft made solely to obtain ground services for the aircraft; (embarquement)

licensed air carrier means a certified air carrier to whom a licence has been granted under section 17; (transporteur aérien titulaire de licence)

tax means the air transportation tax imposed under this Part; (taxe)

taxation area means

Canada,

the United States (except Hawaii), and

the Islands of St. Pierre and Miquelon. (zone de taxation)

This Part is binding on Her Majesty in right of Canada or a province.

There shall be imposed, levied and collected an air transportation tax, determined under section 11, on each amount paid or payable in Canada for transportation of a person by air where that transportation begins at a point in the taxation area and ends at a point in the taxation area.

There shall be imposed, levied and collected an air transportation tax, determined under section 11, on each amount paid or payable outside Canada for the transportation of a person by air where that transportation payable by the person at the time when, in respect of the transportation, he emplanes at the airport in Canada described in paragraph (b) on the aircraft therein described, except where the air transportation tax has been paid before that time to a licensed air carrier or his agent and evidence of the prepayment of tax is submitted by the person, in a manner and form and to a member of a class of persons prescribed by regulation of the Governor in Council.

begins at a point in the taxation area and ends at a point in the taxation area, and

includes an emplanement by the person on an aircraft at an airport in Canada on a specific flight having as a destination an airport in the taxation area outside Canada and subsequent deplanement by the person from the flight at an airport outside Canada,

For the purposes of subsection (1), transportation by air begins at a point in the taxation area and ends at a point in the taxation area if the transportation does not include a departure, destination or intermediate stop, other than a transfer stop, outside the taxation area.

For the purposes of subsection (2), transportation by air begins at a point in the taxation area and ends at a point in the taxation area if the transportation

does not include a departure, destination or intermediate stop, other than a transfer stop, outside the taxation area; and

includes at least one departure from a point in Canada, other than a departure resulting from a transfer stop.

Subject to subsections (2) and (2.1), the tax imposed under subsection 10(1) or (2) on each amount paid or payable for transportation of a person by air shall be an amount that is the lesser of

the aggregate of

the amount that is

4% of each amount paid or payable, if the amount is paid or payable in Canada after December 31, 1997 for transportation of a person by air that begins after February 28, 1998,

4% of each amount paid or payable, if the amount is paid or payable outside Canada after December 31, 1997 and the first emplanement by the person, as described in paragraph 10(2)(b), occurs after February 28, 1998, or

7% of each amount paid or payable, in any other case, and

$6 or such lesser amount as may, for the purposes of this subparagraph, be prescribed by order of the Governor in Council on the recommendation of the Minister of Transport, and

such amount as may, for the purposes of this subsection, be prescribed by order of the Governor in Council on the recommendation of the Minister of Transport.

Where the amount paid or payable in Canada for air transportation is for transportation by an aircraft that has been chartered for the purpose by one or more charterers, the tax imposed under subsection 10(1) on the amount paid or payable to a certified air carrier by each charterer shall be an amount that is the lesser of

the aggregate of

the amount that is

4% of each amount paid or payable, if the amount is paid or payable after December 31, 1997 to a certified air carrier by the charterer for transportation of a person by air that begins after February 28, 1998, or

7% of each amount paid or payable to a certified air carrier by the charterer, in any other case, and

the amount that is

$1.50 in respect of each emplanement, pursuant to the charter agreement of that charterer, on the aircraft by any person, if the amount is paid or payable to a certified air carrier by the charterer after December 31, 1997 for transportation of the person by air that begins after February 28, 1998, or

$3 in respect of each emplanement, pursuant to the charter agreement of that charterer, on the aircraft by any person, in any other case, and

the aggregate of such amount as may, for the purposes of this subsection, be prescribed by order of the Governor in Council on the recommendation of the Minister of Transport, in respect of each emplanement, pursuant to the charter agreement of that charterer, on the aircraft by any person.

Where the tax imposed under subsection 10(2) on an amount paid or payable outside Canada for transportation of a person by air is payable by the person at the time he emplanes at an airport in Canada and evidence of the amount paid or payable for the transportation is not submitted, in the manner and form prescribed by regulation of the Governor in Council, by the person to the licensed air carrier required by this Part to collect the tax in Canada, and an amount is prescribed by order of the Governor in Council pursuant to paragraph (1)(b), the tax payable by the person shall be the amount so prescribed.

The tax imposed by subsection 10(1), as determined under subsection (1), on each amount paid or payable for transportation of a person by air is not payable in the case of transportation purchased as part of a continuous journey where

the journey includes a charter flight in respect of which tax is imposed under section 10 or 12; and

evidence of the continuous journey is submitted by the person to the licensed air carrier or his agent from whom the transportation by air is purchased.

There shall be imposed, levied and collected an air transportation tax, determined under section 13, on each amount paid or payable in Canada for transportation of a person by air where that transportation begins at a point in the taxation area and ends at a point outside the taxation area.

There shall be imposed, levied and collected an air transportation tax, determined under section 13, on each amount paid or payable outside Canada for the transportation of a person by air where such transportation payable by the person at the time when, in respect of the transportation, he emplanes at the airport in Canada described in paragraph (b) on the aircraft therein described, except where the air transportation tax has been paid before that time to a licensed air carrier or his agent and evidence of the prepayment of tax is submitted by the person, in a manner and form and to a member of a class of persons prescribed by regulation of the Governor in Council.

begins at a point in the taxation area and ends at a point outside the taxation area, and

includes an emplanement by the person on an aircraft at an airport in Canada on a specific flight having as a destination an airport outside Canada and subsequent deplanement by the person from the flight at an airport outside Canada,

For the purposes of subsection (1), transportation by air begins at a point in the taxation area and ends at a point outside the taxation area if the transportation or any part thereof includes at least one departure from a point in the taxation area, other than a departure resulting from a transfer stop, to a destination outside the taxation area.

For the purposes of subsection (2), transportation by air begins at a point in the taxation area and ends at a point outside the taxation area if the transportation or any part thereof includes at least one departure from a point in Canada, other than a departure resulting from a transfer stop, to a destination outside the taxation area, whether or not there are any intermediate stops.

Subject to subsection (2), the tax imposed under subsection 12(1) for transportation of a person by air shall be

an amount that is the lesser of

the amount of

$30, if the amount paid or payable for transportation of the person by air is paid or payable after December 31, 1997 for transportation of the person by air that begins after February 28, 1998, or

$55, in any other case, and

such amount as may, for the purposes of this subsection, be prescribed by order of the Governor in Council on the recommendation of the Minister of Transport; or

fifty per cent of the amount provided in paragraph (a) when the person is a child under twelve years of age and is being transported at a fare reduced fifty per cent or more below the applicable fare.

Where the amount paid or payable in Canada for air transportation is for transportation by an aircraft that has been chartered for the purpose by one or more charterers, the tax imposed under subsection 12(1) on the amount paid or payable to a certified air carrier by each charterer shall be an amount that is the aggregate of

the lesser of in respect of each emplanement, pursuant to the charter agreement of that charterer, on the aircraft by a person, other than a person described in paragraph (b); and

the amount of

$30, if the amount paid or payable for the transportation of a person by air is paid or payable to a certified air carrier by the charterer after December 31, 1997 for transportation of the person by air that begins after February 28, 1998, or

$55, in any other case, and

such amount as may, for the purposes of this subsection, be prescribed by order of the Governor in Council on the recommendation of the Minister of Transport,

fifty per cent of the amount provided in paragraph (a) in respect of each emplanement, pursuant to the charter agreement of that charterer, on the aircraft by a child who is under twelve years of age and is being transported at a fare reduced fifty per cent or more below the applicable fare.

For the purposes of subsection (2), emplanement means an emplanement by a person at an airport in Canada on a specific flight that has as a destination an airport outside Canada and from which the person deplanes at an airport outside Canada.

The tax imposed under subsection 12(2) for transportation of a person by air shall be

where the first emplanement of the person occurs at an airport in Canada,

an amount that is the lesser of

the amount of $30, if the amount paid or payable for the transportation is paid or payable after December 31, 1997 and the first emplanement by the person, within the meaning of subsection (2.1), occurs after February 28, 1998, or $55, in any other case, and

such amount as may, for the purposes of this paragraph, be prescribed by order of the Governor in Council on the recommendation of the Minister of Transport, or

50% of the amount provided in subparagraph (i) where the person is a child under twelve years of age and is being transported at a fare reduced 50% or more below the applicable fare; and

in any other case,

an amount that is the lesser of

the amount of $15, if the amount paid or payable for the transportation is paid or payable after December 31, 1997 and the first emplanement by the person, within the meaning of subsection (2.1), occurs after February 28, 1998, or $27.50, in any other case, and

such amount as may, for the purposes of this paragraph, be prescribed by order of the Governor in Council on the recommendation of the Minister of Transport, or

50% of the amount provided in subparagraph (i) where the person is a child under twelve years of age and is being transported at a fare reduced 50% or more below the applicable fare.

Subsections 12(1) and (2) do not apply in respect of the transportation of a person by air at a fare ninety per cent or more below the applicable fare.