Federal Legislation to Start HST Implementation Passes
Canada's federal harmonized sales tax (HST) implementing legislation is Bill C-62 "Provincial Choice Tax Framework Act", which received Royal Assent in the House of Commons on December 15, 2009. The Canadian Senate passed Bill C-62 on December 15, 2009.
Bill C-62 (became Chapter 32 upon Royal Assent) amends the Excise Tax Act (the “Act") to implement, effective July 1, 2010, the new fully harmonized value-added tax framework in Ontario and British Columbia. It also facilitates the new framework to accommodate any province's decision to have the provincial component of the harmonized value-added tax under the Act apply in that province by achieving a common understanding with Canada in respect of such a new framework.
It is important to note that the federal implementing legislation does not contain the place of supply rules, which will be implemented by way of regulation, instead of by way of legislation. This means that the House of Commons and Senate do not approve the place of supply rules. The place of supply rules regulations will become law upon promulgation of the Governor-in-Council (that is Cabinet). This may prove to be problematic and is a reason to watch the Canada Gazette carefully.
Cyndee Todgham Cherniak is the founding lawyer of LexSage, a boutique international trade law and sales tax firm in Toronto,
